Page 4 - Sip

Big bet on SIPs: MFs garner over Rs 49,000-cr in first six months of FY20

Currently, mutual funds have 2.84 crore SIP accounts through which investors regularly invest in Indian mutual fund schemes

Buying a life protection plan is necessary, but it should be the right one

Though tax-saving is an essential element of the investments you make during the year, before investing you should consider all the other options available

BS Fund Cafe: Credit events may not halt MF industry's growth, say experts

Seven top executives discuss the road ahead for the fund industry, how they plan to restore investor confidence and woo millennials

Reader's corner: Mutual Funds

Ordinarily people derive a lot of comfort from investing into PPF, and rightly so

SIP closure ratio at 18-month high, Dec applications slip to 750,000

The SIP closure ratio (applications for stopping SIPs as a percentage of fresh SIPs) in December was at 52%, implying a request for closure for every fresh application

Take SIP route to mid and small-cap funds; avoid lump sum investments

The key reason fund houses had imposed restrictions on inflows was high valuations

Negative returns on SIPs shouldn't worry retail investors in India

Market sentiment has turned weak due to a variety of global issues, like the US's threat to start a trade war

Should you invest in SIPs for perpetuity?

While filling out the mutual fund application form for Systematic Investment Plan (SIP), chances are that you have opted to invest for perpetuity. That is, if you did not choose a specific time plan while the investment runs for perpetuity by default. But it may not necessarily be a bad idea. Choosing to invest for perpetuity ensures that you will not forget to renew your SIP and thereby miss out on the reinvestment opportunity, say experts. A Balasubramanian, CEO, Birla Sun Life Asset Management Company says that for the past three years there is an increasing trend that most SIPs are getting registered for perpetuity. "Earlier investors would subscribe for SIP for one year. But nowadays investors are subscribing for perpetuity. If you contract for one year then you have to renew it. And most of the time people forget to renew it", he says.If not perpetuity, investors should ideally sign up for a SIP in a diversified equity fund for 10 years says Sundeep Sikka, CEO, Reliance Nippon .

Run SIP for a decade to reap rich rewards

Retail investors have started putting their faith in systematic investment plans (SIP). In the ongoing quarter (July-September), the number of SIPs crossed the 10-million mark. The total number of accounts held by retail investors stands at 46.5 million and about 80 per cent of these are in equity funds, according to data from the Association of Mutual Funds in India (Amfi). But, the majority of investors don't hold their investments long enough to reap the real benefits of SIPs. Only 39 per cent of the investments in equity funds stay with the fund for over two years. If an investor wants to create wealth using SIP, he needs to stay invested for the long term.If you had continued investing Rs 5,000 a month for the past 10 years, you would have more than doubled your principal. This would have happened despite the 2008 global crisis and the 2011 European sovereign debt crisis, both of which led to significant downturns. In the table along side are the 10-year SIP returns offered by