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Best mutual fund SIPs to invest your money

Top mutual funds for systematic investment plans under categories like equity diversified, tax saving funds and balanced funds.

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Investing on regular basis through the SIP route has given better returns in the long term compared to investing lumpsum amount in any mutual fund schemes.

Given in the table below are investments made in various schemes of mutual funds through SIP from January 1, 2007 to December 31, 2009.

We will compare their returns with non-SIP returns invested lumpsum amount in those schemes. The returns from each scheme are given below:

Advantages of SIP

Investors don't need to time the market for their entry while investing. The investments get averaged out by investing through SIP on monthly or quarterly basis in MF schemes.

It reduces the risk of investing when markets are volatile.

Investments early in life helps to get the benefit of compounding on the invested amount in the long term. So, through SIPs investors can start investing nominal amounts say Rs 100 or Rs 500 or Rs 1000 of his savings to get the benefits of compounding by investing in mutual funds.

Regular savings and investments are easy way to build a corpus compared to investing lumpsum amount in one go.

You can choose the option of auto-debit or ECS while filling the SIP form of any monthly / quarterly date or give post dated cheques for the amount you wish to invest in MF schemes.

Click NEXT to read the best mutual funds for SIP in popular categories

Top ELSS schemes for SIPs

1. ICICI Prudential Tax Plan

Objective: To generate long-term capital appreciation from a portfolio that is invested predominantly in equity and provides tax benefits.

Top sector allocations: IT, Pharmaceuticals

2. HDFC Taxsaver

Objective: To provide tax benefits along with capital appreciation.

Top sector allocations: Pharmaceuticals, IT, BFSI

3. Canara Robeco Equity Tax Saver

Objective: To provide long term capital appreciation by predominantly investing in equities.

Top sector allocations: BFSI, Pharmaceuticals, Oil drilling and exploration, BFSI

4. Sahara Tax Gain

Objective: To provide attractive returns, security and liquidity through Investments in capital and money markets.

Top sector allocations: Pharmaceuticals, BFSI

5. Franklin India Tax shield

Objective: To provide medium to long term growth of capital along with income tax rebate.

Top sector allocations: BFSI, Pharmaceuticals, IT

Source: Value Research Online
Note: The absolute returns calculated above are till 30th June, 2010.

Top equity diversified mutual funds for SIP

1. Reliance Equity Opportunities

Objective:

• Primary: To generate capital appreciation
• Secondary: Generate consistent returns by investing in debt and money market securities.

Top sector allocations: BFSI, Pharmaceuticals, IT

2. ICICI Prudential Discovery

Objective: To generate returns through a combination of dividend income and capital appreciation by investing primarily in a well-diversified portfolio of value stocks.

Top sector allocations: BFSI, Pharma, Power, Telecom

3. Birla Sun Life MNC

Objective: To build a high quality growth oriented portfolio to achieve long term capital appreciation through investment in multinational companies.

Top sector allocations: Pharmaceuticals, Service, BFSI

4. UTI Master Value

Objective: Providing substantial long term capital appreciation from investment in undervalued stocks and good dividend yield.

Top sector allocations: Pharmaceuticals, Refineries, BFSI, etc.

5. HDFC Top 200

Objective: To generate long term capital appreciation by investing in a portfolio of equities and equity linked instruments drawn from the BSE 200 Index.

Top sector allocations: BFSI, Oil drilling and exploration, BFSI, IT, Pharmaceuticals

Source: Value Research Online
Note: The absolute returns calculated above are till 30th June, 2010.

Best Balanced Funds for SIP

1. HDFC Prudence

Objective: The investment objective of the Scheme is to provide periodic returns and capital appreciation over a long period of time, from a judicious mix of equity and debt investments, with the aim to prevent/ minimise any capital erosion.

Top sector allocations: BFSI, Pharmaceuticals, Oil drilling and exploration

2. Tata Balanced

Objective: To invest in equity and debt oriented securities so as to give investors balanced returns.

Top sector allocations: BFSI, IT

3. Canara Robeco Balance

Objective: To provide medium to long term growth of capital and also to distribute income by investing in equities, fixed income securities, other debt instruments and money market instruments etc.

Top sector allocations: Power

4. DSP Blackrock Balanced

Objective: To generate long term capital appreciation and current income from a portfolio constituting equity and equity related securities as well as fixed income securities.

Top sector allocations: BFSI, Pharmaceuticals

5. Birla Sun Life 95

Objective: Long term growth and income, through a portfolio with a target allocation of 60% equity, 40% debt and money market securities.

Top sector allocations: BFSI

Source: Value Research Online
Note: The absolute returns calculated above are till 30th June, 2010.

The mutual funds category discussed above are the most popular among investors. You can also invest in sector oriented mutual fund schemes through SIP. Each scheme has minimum SIP amount in the range of Rs 100 to Rs 10,000 specified in key information memorandum. There is no maximum limit to invest through SIP in any of the above MF scheme.

Absolute returns, annualised returns and objective of the schemes are not the only criteria an investor should consider while investing. Also, there are various risks involved while investing in mutual funds which need to be analysed before investing and while reviewing to get advantage of good returns by investing in mutual funds for long term.