How to maximize returns from SIP’s in Mutual funds?

How to maximize returns from SIP's in Mutual fundsHow to maximize returns from SIP's in Mutual funds?

I have been investing in mutual funds for several years through Systematic Investment Plan (SIP). Mutual funds help us to reduce risk as Mutual funds invest across various stocks and various sectors. In this article, I want to share my experiences on the strategies which I have adopted to maximize returns from SIP’s in Mutual funds. I felt these are sure shot ways which you can implement and increase your returns.

How to maximize returns from SIP's in Mutual funds?

1) SIP at various dates in a month: 

Few years back, I started investing in 10 mutual fund schemes and the SIP date was 5th of the month. Means, all my mutual fund schemes would get executed on 5th and mutual fund units would come into my account within 2 to 3 days. Now the real fun started. I used to see that market used to dance for at least once in a month. Either it could be a sudden increase in stock index or sudden fall without any news.

Also read: Top-10 Best Mutual funds to invest for SIP

Though I know that I am not supposed to monitor my mutual fund investments regularly as I intended to invest for long term, like a normal investor, I used to open my ICICIdirect.com every Saturday and Sunday and used to see how much I gained or lost for that week. Over a period of time, I used to get nervous. One day I sat for 2 hours analyzing, how to get the BEST from such situations. One solution which has come to my mind was creating SIP in mutual funds at various dates. I had 10 mutual fund schemes and I cancelled all existing ones and re-created. I created SIP's in such a way like 2 on the 5th of the month, 2 on the 10th of the month, 2 on 15th of the month, 2 on the 20th of the month and 2 on the 25th of the month.  When the market was up or down during 1st week of the month, my 2 mutual fund SIP’s only used to get affected. My other SIP mutual funds had less affect on such market down-swings. I felt this was one of the best strategies one can adopt and gain more from SIP’s.

2) Track your SIP in mutual funds against goals:

Earlier, I invested in several mutual funds. Later I thought I need money either for a child’s education or to buy some assets; I used to redeem my mutual fund units as and when required. I was not able to get good returns as I have redeemed without any prior plan. Later I realized that I am not linking my investments with goals. When you link your SIP in mutual funds with goals, you would have better tracking. I would an example. This about investing for my daughter’s marriage. I invested through SIP in two mutual funds. My aim is not to touch for next 10 to 12 years. Come what, I would not cancel or redeem such mutual fund units. When you set goals and invest for them, there are greater chances that you would get high returns.

3) Increase SIP values year on year:

When I started investing in mutual funds, I kept SIP amount at ₹ 3,000 per mutual fund scheme.  Later I have started increasing year on year. Now I invest for ₹ 5,000 as SIP per scheme. You can drastically increase your corpus if you are increasing SIP values year on year. You can increase SIP values for existing SIP schemes or you can create new SIP schemes with incremental amount. Do you know that if you invest ₹ 10,000 per month in SIP and increase your SIP investment 10% year on year, your corpus would increase from ₹ 23.23 Lakhs to ₹ 33.75 Lakhs, which is a 45% jump. The values assumed conservatively at 12% annualized returns. This is one of the sure shot ways to maximize returns from SIP of mutual funds.

4) Use STP for lump sum investments:

Is there a way to invest lump investments in equity mutual funds and gain like we get from SIP in mutual funds? The answer is yes. You should adopt the strategy of Systematic Transfer Plan (STP). You can invest lump sum investments in liquid funds or debt funds and ask mutual fund houses to do STP to equity funds. STP works in such a way that your money would be transferred from liquid/debt funds to equity funds regularly every month like SIP. This way you can invest in equity funds and get good returns.

Also read: Best Mutual funds which gave solid and consistent returns

When you are nearing your goal, you should stay away from risky investments, hence you should adopt reverse STP. Means your money would be transferred from equity funds to debt or liquid funds every month over a period of time like SIP. STP strategy would be best for lump sum investments and when you are nearing your goal.

Conclusion: I felt these are some of my experiences on how to get maximum returns on SIP in mutual funds. Since I have already experienced them on positive side, I don’t know whether there are any drawbacks in these features.

Readers, have you implemented any of these tips earlier. If so, what are your experiences?

If you enjoyed this article, share it with your friends and colleagues through Facebook and twitter.

Suresh
How to maximize returns from SIP's of Mutual funds

Suresh KP

Discover more from Myinvestmentideas.com

Subscribe to get the latest posts sent to your email.

66 comments

  1. Hi, I would like to invest 10000/- per month from next year for 5 years. Can you please suggest better investment plan for this.

    Thanks.

  2. may i ask your opinion on the following strategy

     link equity and debt funds.when the market is high  transfer units from equity and vice versa. the drawback  is the exit load levied

  3. Hi Suresh,

    This is Yogesh, I am new to mutual fund and have no knowledge about same.

    I would like to invest around 5000 per month for short term of 1 yr or 3 yr.

    Could you please suggest any suitable plans?

    Thanks in advance

    Yogesh

     

  4. Hi Suresh,

    I have following goals, can you please suggest me the mutual funds and types and amount to invest?
    1) trip to korea after 3 years = which will require 2 lacs
    2) marriage after 5 years
    3) own home after 7 years

    I can invest up to 8k now, but I can increase investment over the years as per my salary.
    I am planning to invest from march 17. I like your idea of investing on diff dates.
    how should i approach?

  5. Hi sir,

    Would  request you to please  tell me the right method to invest in mutual  fund through sip with minimun risk and highest return.duration is 5 years. And kindly one more thing that is it possible to withdraw my investment before 5 years.

    1. Hi Manoj, Investment in mutual funds should be done with long term tenure. The reason is there are many market cycles (upturn or downturn) during this period where you can get good returns. If your need is less than 5 years, better don’t invest in equity mutual funds. If can invest for 5 years, invest in balanced mutual funds. If you can invest for 8-10 years, invest in top equity funds.

  6. Hi Suresh,

    I am new to Mutual Funds and have no knowledge about the same. I have just informed by bank relationship manager that I would like to invest 3000 every moth in DSP Blackrock Micro Cap Fund. As I read your articles regularly, understand that one needs to invest as per their goals. I do not have any long term goals but only short term goals such as purchasing a house on home loan of about 50lakhs and then purchasing a car in next 3 years time. Could you kindly advise with such goals which are the MF's that I should invest in? How do I identify which MF's suit my goals and which ones are for short term and long term? Please advise, Thanks

    1. Hi Mansi, If you want to to invest in mutual funds for short duration of less than 3 years, go for debt mutual funds. Equity mutual funds may not be good for short term.

  7. Hi , This is Adi, Could you please tell me best SIP schemes to invest amount. I want to invest 10k per month.

    Could you please explain about the SIP Schmes

  8. Hi ,This is M,Ragu from Trichy, I am 29 years old ,I want to invest Rs.10000 /- through SIP, Kindly guide me how i can proceed?

  9. I am a defence employee with in hand salary of 30000,,,,,,I want invest 10000 per month in SIP for my 1 year old son,,,,suggest 5 good fund for my harearnings money,,will be highly obliged

  10. Dear Suresh JI,
    Greetings of the Day!

    I wish to share the followings.

    1.I am 53 year old.
    2. i want to create some amount for my requirement.
    3. In initial years i could not plan this.
    4. How should invest by sip and which fund i should invest.
    5. in past i have invested app. 1lac in hdfc tax saver, 2. 50k in hdfc top 3. 50000 in icici prudential top 200 and some amount in tata infrastructure and Reliance focussed growth fund and hdfc infrstucture.
    6. I can manage a sip of 5000-8000 a year.
    7 presently i have no plan for retirement

    1. Since you have another 5 to 7 years for retirement, you can plan to invest in balanced funds like HDFC Prudence or ICICI Balanced funds. Other funds indicated by you are high risk and you may not good returns in 5 years period.

  11. I am an amateur when it comes to investing and would like to learn more about MF’s from your blog, by visiting your blogs more. I found your blogs to be simple and yet informative. Just signed up for e-mail alerts too 🙂

  12. Hi, I’m enjoying your articles. As I’m very new at MF, like to start with SIP.
    I’ll follow your tips but invest according to my goals and capabilities.
    Thanking you.
    P.saha.

  13. Hi suresh , 

    I just completed my Mba and now started with my family business. I have 5L as savings from my previous job now i get around 45-50k per month so i wanted to invest in SIP's and after reading your blog i am quiet convinced you can brief me some funds and suggest me how can i grow my wealth. I can invest 10-15k p/m in various funds. Kindly light me some top perorming funds and on which dates should i place my call. Is Split up of funds more benefecial ?

     

    Regards,

    Preetesh Choudhari

  14. Hi Suresh,

    I have 5L to invest and want to make use of SIP in improve returns. Target time period is 5 years for doubling the money. Here I have two options.

    Option 1:: Invest 5L in option 4 in your maximize SIP return article. That is, invest in liquid funds or debt funds and ask STP into SIP every month. However, I see the risk that, my principle amount may go down due to market fluctuations. With debt funds I may get interest of 8% to 9%.

     Option2::I want to make Fixed Deposit of these 5L by buying NCD ( like Mahindra or DS kulkarni who can give me 12% of interest) and route the monthly interest into SIP. In this way, I can protect my principle amount completely.

    I would like to to take your suggestion, which option I would go with. For any option you suggest, please also guide me by giving some references to what funds or NCDs I need to select?

     

    Thanks,Krishna

     

     

    1. Krishna, Option-1 is less risk, but you may or may not get returns Option-2 is little riskly and post tax returns might be low. Instead, invest in balanced funds like ICICI balanced funds or HDFC prudence fund where you can have highest returns. Some money can be parked in high rated NCD’s

  15. Suresh,

    I am extremely new to MFs, and I am investing 2000/month on SBI Magnum Midcap Fund Growth (Direct). Your suggestion would be to not touch it for the next 10 years, right?

    Also, I am develping this real bad habit of monitoring NAVs daily. I think I should avoid that.

    Thanks,

    Ankur

  16. Hii suresh, i am a new investor and want to invest in mutual funds through sips .i am willing to take risk for 5 years as i m not married yet .i want to invest 15k per month i have selected hdfc top 200, SBI magnum multiplier growth funds . are these two stocks good for wealth creation if not suggest me some more. I want to be invested for 10 to 15 years. Thanx in advance

    1. Since you are new to investment, my suggestion is to invest in balanced mutual funds to start with. 1) Invest in ICICI 

      Balanced fund and HDFC Balanced fund. Keep some amount into recurring deposits also. 2) Once you are familar on how mutual 

      funds operate, you can invest in large cap funds and diversified mutual funds. 3) If you can take some risk, you can invest 

      in top 5 mid cap and small cap funds which I have recommended. But note that you should hold them for 8 to 10 years to get 

      good returns. You can keep tracking every month on how your funds are progressing.

  17. Hi suresh.

    I have just started  my carrer and i am thinking about investing 2k per month. I have a very little knowledge about mutual funds and share market. Can you please help me to choose some goods mutual funds for long term and a good return. should I need to cosult any agent?

    thanks in advance

     

    1. Hi Sandeep, You need not consult any agent. Spend 1 hour on my blog for next 15 days. Go thru the mutual fund section first and comments section for each and every article. You would know what kind of mutual funds can be invested by various risk appetite investors. In the process, you can open mutual fund account with ICICI Direct.com or Fundsindia.com. In next 4 weeks, you should be able to comment on this blog the funds which you want to invest based on your risk appetite and I should just say “OK Proceed”. 

  18. Hi,

    I am new to this SIP dont have much knowledge. I wanted to start investing monthly and I need good return after 10 years. Can you please suggest me a good fund where I can invest. 

  19. Hello Suresh,

    I am a 33 year old IT professional with medium to high risk appetite. My investment goal is to grow a retirement corpus of 1 Crore through mutual funds. My current portfolio is as below (cost of investment since 2005 is 8 lakhs):

    HDFC Index Fund – Sensex Plus Plan

    HDFC Top 200 Fund

    HDFC TaxSaver

    HDFC Mid-Cap Opportunities Fund

    SBI Emerging Businesses Fund

    SBI Magnum Tax Gain Scheme

    Reliance Equity Opportunities Fund

     

    I am currently investing monthly SIP of 20K into Reliance Equity Opportunities , 15k into HDFC Midcap Opportunities and 10 k into SBI Emerging Business. I plan to continue these monthly SIP for another 1-2 years and then put 10k monthly SIP into one of these funds for another 10-15 years.

     

    1. Would you recommend I continue with my current portfolio or downsizing it?

    2. Is my retirement goal of 1 cr achievable?

     Thanking you in advance

    Kavya

    1. Hi Kavya, Here are my comments 1) You have 8L MF’s now 2) You would invest Rs 45K per month for next 2 years 3) You would invest Rs 10K per month from 3rd year to 15th year. If you are investing in good equity funds with above plan, your value of mutual funds could be Rs 80L in 10 years and Rs 1.65 Crores after 15 years. You have good plan, but you should achieve through investing in good mutual funds. Check my articles about top funds and keep investing in them. Please let me know in case you have any issue in selecting good funds.

  20. Sir

    As i have little knowledge about SIP 

    I want to ask you  that as i have invested in 4 sip through some agent. i am getting statement for every SIP in my name through email but do not get any receipt or certificate from agent. Is it ok or some fraud.and if it is ok how to withdraw SIP at end as i have no get any receipt or certificate from agen 

    1. Amar, Check the statement. If the name and address pertains to you, then these are in your name only. If the name is agent name and C/o address is your address, there could be something wrong. You can directly call respective MF house by giving folio number and enquire too.

      1. Very  Thanks for your reply. Sir yes it is in my name but at time of withdrawal what should i do. Should i require only this folio number at time of withdrawal. 

          1. i have invested Rs. 6000 in SIP now i want to invest further 4 thousand. What should i do to get best return

  21. Hi Suresh, thanks for all these useful information. I am very new to Mutual Funds and SIP. However I started three different SIPs last year and I am investing 5000 in each per month. I want to keep these investments for at least 10 years.

    Please me know if this is going to be a right decision.

    Funds are….

    1. Reliance Equity Opportunities Fund Groth
    2. HDFC TOP 200 FUND – GROWTH PLAN SIP
    3. SBI Emerging Business Fund – Groth

    Thanks.

  22. Hi Suresh,

                  I have been investing in ICICI pru focussed bluechip and Quantum long term equity fund for last 1 year through SIP. Please suggest if I need to add some more funds or keep continue in these two funds.

    Thanks,

    Nirmal

  23. Hello Suresh,

    Currently I have investment in HDFC standard Life Fund the value is less than what I have inveted. Please suggest if i should discontinue.

    Scheme:-

    Secure manage Fund & Growth Fund – Total 25k/annum

    I have been investing since 2009 and current value is 1.23 lacs.

    -Thanks

    Darshana

     

     

    1. Darshana, Any ULIP taken prior to Sep 2009 had problem as they used to have high allocation charges. If you have taken before that, you are getting penalised due to that. I coudl not see fund performance in any website, hence not able to comment. Please inform how much exactly you have invested ? Is it Rs 1 Lakh or Rs 1.25 Lakhs. Is it before Sep-09 or after that ?

  24. Hello Suresh,

    Can yoi guide me if below mutual funds should be part of my portfolio?  I am planning below amount:-

    ICICI prud exports & other services fund – 2000 / month

    ICICI pru foused blue chip fund – 2000/month

    Birla Sun life India gennext – 2000/month

    I already have ICICI Prud growth Fund SIP 2k /month as part of my portfolio.

    Please advise.

    -Thanks

    Darshana

    1. Darshana, You have chosen good funds. However note that ICICI Prud exports is more like a sector fund which invests in 2-3 sectors. This is high risk high return fund.

    2. Hello Suresh,

      Thanks for a quick reply. Thats what my concern was for ICCI pru exports fund. Though fund has performed good in last year over all performance in last 5 years is volatile.please suggest if its good idea to ivest for long term or keep watch and come out after getting good returns.

      -Thanks

      Darshana

      1. Darshana, There is no hard rule. These are high risk, high return investments. You should come out when market starts downtrend. You should keep them for short term, else there is every chance that you would loose money.

  25. I can invest 4000 per month and I need some lumpsum after 2.5 years. Can SIP in mutual fund be the ideal for me? I need good return but not in lieu of security. plz suggest the best fund as I have just started earning and dont have much financial know how.

    1. Rick, You can invest in debt funds like SBI Dynamic bond fund or IDFC Fund or short term funds like ICICI Pru flexi income fund for 2 to 3 years time frame. However they would carry some risk. If you do not want any risk, best way to invest for 2.5 years is bank RD

  26. Hello Sir

    I read your articles whcih are quite informative. Sir I want to invest Rs. 5000/- PM in Mutual Fund Kindly guide me and further can I invest more than 5000/- PM in mutual funds according extra money available with me and in which funds should I deposit

    1. Nitin, Invest in largecap or diversified funds like ICICI Pru focussed blue chip fund,BNPP Equity fund, UTI India life style fund or UTI Opps fund or Quantum long term equity fund and Birla SL Gen Next. You can pick any of these funds. You can invest lump sum investments too in these funds. But invest only for long term.

  27. SURESH JI  U DONT COMPLETE MY QUESTION IS(1) THIS LIQUID FUNDS ARE RISKY OR SAFE,(2) IN LIQUID FUND WHICH ONE IS BEST IN   DAILY DIVIDEND,WEEKLY DIVIDEND, MONTHLY DIVIDEND OR GROWTH OPTION ( NO DIVIDEND ). THANK U

  28. Hi , iam commerce graduates and currectly working in call centre and now want to switch my career and want to become stock market trader so is this is right career ? as i am currectly 30yers old.

     

    Tahnks

    1. Akhilesh, There is no right or wrong. If you have interest and you are passionate, you can do anything. While there are enourmous opportunities in stock market, there is equal competition. Try and test for couple of months before you switch your career by spending weekends. This would be like test drive. If you feel happy, you can switch over permanently. 

  29. HELLO SURESH JI , I INVEST 1 LAC RS IN SBI MAG INSTA CASH DIR G LAST MONTH , NOW ITS VALUE IS 100860 RS IN EXACT 1 MONTH. IT IS BETTER RETURN FROM BANK FD , IS ANY RISK IN THIS TYPE LIQUID PLAN THAN SUGGEST ME SOME SAFE LIQUID PLAN WHICH RETURN IS BETTER THAN BANK FD.

    1. Gunjan. You are just looking at one month return. Annualised return is 9% per annum for this fund. This is Crisil Rank-4 Liquid fund. Good to invest, but there are better funds. Pls note that this fund is meant for liquid cash. Don’t expect that you would get 1% returns every month going forward. You should see what is your objective and then invest. If you still prefer to invest in liquid funds, you can try Peerless liquid fund or Reliance liquid fund or IDFC liquid cash fund etc.

  30. Hi Suresh,

    I love your articles & a big fan of yours :), Thanks for your expert guidance on Mutual funds.

    I have been investing in HDFC Prudence fund for last 2 years & the returns have been negative. I know this is a balance fund & I cant compare retuns to a large fund, but when i compare with other balanced funds Prudence has been pathetic.

    I am seriously thinking of stopping this fund & either use the money to prepay my loan which is an 11% or move to another large cap fund. The other fund which is equally not doing good is HDFC top 200. I know you have been recomendding both these funds hence my question to you is:-

    1. Can i stop HDFC Prudence fund & HDFC Top 200. If i have to stop one which one do u recommend ?

    2. Does it makes sense to use the funds of this to prepay my home loan which is at  11% or start another fund ?

    Would appreciate your response.

    Thanks

    Vikram

    1. Vikram, I understand your pain problem. If you see these 2 funds have not been performing well in last 1-2 years. However we should not forget that these gave 20%+ returns in last 10 years. If you still want to take call, you can discontinue HDFC Prudence as this is balanced fund. Other one is large cap fund where you can expect good returns, but in long run. Since your home loan rate is at 11%, it is always better to close or try to repay as much as you can. There is no point is paying 11% interest and expect 12% from mutual funds which may or may not happen.

  31. Hello Sir,
    Nice article, I want to know your view on global mutual funds like icici pru us bluechip fund or dsp blackrock us flexible equity fund.

  32. Hi suresh

    I have 4 lac in hand rite now and wants to invest for1-3 years for higher return. I am new investor so risk nutural and considering to invest this in parts like Fd,mf,debt fund and bonds. Plz guide…

    1. Yogesh, If you want to invest for short term of 1-3 years, my suggestion to you is to go for Bank FD only. If you can take some risk, you can invest in debt mutual funds like SBI Dynamic bond fund or IDFC Dynamic Bond funds where you can expect returns of 8% to 11% per annum.

Leave a Reply

Your email address will not be published. Required fields are marked *