The one good thing about Systematic Investment Plans (SIPs) is that you do not need a whole lot of money. A small amount as little as Rs 500 is enough each month to build the much needed corpus.
Here are 5 SIPs where you can invest Rs 500 every month:
1. DSP Top 100 Equity Fund
DSP Top 100 Equity Fund has done well over the last few years. If you were to invest Rs 1 lakhs three years ago in the fund, it would have been worth Rs 1.3 lakhs today.
The minimum amount that is needed to start an SIP is Rs 500 and you can invest Rs 500 each month after that.
The fund's top holdings include names like HDFC Bank, ICICI Bank, Bajaj Finance and Reliance Industries. The growth plan has a net asset value of Rs 228.31, while the dividend plan has an NAV of Rs 19.10. If you are looking at a medium to long term investment horizon, the DSP top 100 Equity Fund could be a good bet.
2. SBI Bluechip Fund
SBI Bluechip Fund is another fund that has performed well over the last few years. The minimum SIP amount to invest through this fund is Rs 500, though the initial amount of investment that is needed is Rs 5,000.
The fund has generated a 1-year returns of 14.36 per cent, while the three years returns has been 9.38 per cent on an annualized basis. With the markets constantly looking up, there are hopes that the fund would continue to do well. The SBI Bluechip Fund has holdings in names like HDFC Bank, ICICI Bank, ITC, Larsen and Toubro and Nestle India.
There is an exit load, if you exit the fund before a period of 1-year.
3. Nippon India Largecap Fund
This is a fund where you can invest a very small sum of Rs 100 every month. A sum of Rs 1 lakh invested three years ago, would now fetch Rs 1.37 lakhs.
This fund has a pretty decent rating of '4-star' from Value Research Online. The top 10 stocks in the portfolio comprise 50 per cent of the fund's portfolio.
Again, like most of the other funds, the portfolio comprise high quality names like State Bank of India, ICICI Bank, Larsen and Toubro, Infosys etc.
4. Axis Bluechip Fund
This is another fund, where you can invest a small sum of Rs 500 each month, after the initial sum of Rs 5,000. This fund has received a 5-star rating from Crisil and Value Research because of the solid performance of the last few years.
The fund has holdings in Kotak Mahindra Bank, ICICI Bank, HDFC Bank and Reliance Industries among others.
A sum of Rs 1 lakh invested three years ago in Axis Bluechip Fund is now worth Rs 1.66 lakhs. A monthly SIP of Rs 10,000 over the last three years would have growth to Rs 4.48 lakhs.
5. ICICI Prudential Bluechip Fund
This is another fund that has done reasonably well over the last few years. The fund has generated an annualized returns of 10.32 per cent over the last three years. One can start off in the fund with a small sum of Rs 100 and thereafter a sum of Rs 100 every month through the Systematic Investment Plan.
The fund has been rated as 4-star by Value Research and based on the past track record has done reasonably well. Investors with a long term view can buy into the fund. Beginning from next financial year, it would be better to opt for growth, as dividends would not be taxed in the hands of investors. This is true for both mutual funds and equity shares.
About the author:
Sunil Fernandes has spent 25-years reporting on various aspects of business and finance, including mutual funds and equities. He has worked with frontline newspapers like Hindustan Times, Gulf Times and Deccan Herald, apart from investment magazines like Oman Economic Review and Dalal Street Investment Journal.