Best SIP Plans in 2015 with Tax Benefits
Wondering where to invest your hard-earned money? The answer to this question depends on your risk appetite. If you are a risk-lover, it is suggested that you hunt for high risk commodity or forex trading opportunities. However, in case you are a risk-averse person, it is wise to look for SIP plans. Having said that, we need to say that even Systematic Investment Plans (or SIPs) are subject to market risks but historically, they are not as risky as forex or commodity trading. Thus, assuming that you are more of a cautious investor, we round of the best SIP plans to target in 2015. These SIP plans are considered best because of the following reasons:
- They have always come up with highest returns in last half a decade.
- Crisil has ranked them between 1 and 4. Crisil rankings within that range indicate that the SIP plans have consistently performed well in various market conditions (known as market cycles).
- These mutual funds have more than 100 crores of AUM or assets under management, which is definitely a plus because high AUM means investors’ confidence.
Let us begin with our list!
ICICI PruBalanced Fund
In this SIP plan, money is invested in 60-40 ratio. 60% goes in equity and 40% goes in instruments related to debts. For last 5 years, this scheme has provided annual returns of 18%. In last 10 years, the annual returns have been 17%. This is way higher than 12% annual returns category of balanced funds. ICIC Pru Balanced Fund SIP has ₹ 969 crores of assets under management and hence, has high investors’ confidence. The 40% of investments that go in debt instruments helps to offset the risk of investing in equity.
HDFC Balanced Fund
This one is definitely a go-to SIP plan because of its stellar track record of 20% compounded annual growth rate both in last 5 and 10 years. Similar to ICIC Pru Balanced Fund, this SIP scheme diversifies investment by spreading money and equity instruments and debt instruments where the risks of the former are balanced out by the limited volatility of the debt and fixed income instruments. This scheme boasts an AUM of ₹ 1,911 crores.
UTI Mid Cap Fund
This falls in open-ended equity category. Open-ended here simply means that the fund will continue to supply fresh stocks in market as long as there is demand to meet the increased supply. This continued issuance of stocks is independent of the investor count in market. This approach is taken to increase the value of the capital through investments in mid-cap companies. This fund maintained 23% compounded annual growth rate over the last half decade. The category in which this fund lies churned out an average annual return of 18.9%. Not only did the fund outperformed all other players in this category, it also managed to stay well above the 11.5% benchmark of CNX Midcap. As far as the AUM is concerned, UTI Mid Cap manages ₹ 1,870 crores of wealth.
HDFC Mid-cap Opportunities Fund
This SIP plan aims for capital appreciation through portfolio spread of small-cap and mid-cap companies. With 5 consecutive years of 25% of compounded annual growth rate, HDFC Mid-cap Opps Fund outperformed its entire category that averaged at 18% and stayed well above 11.5% benchmark of CNX Midcap. This particular SIP fund is a must-match for risk-averse people because of two reasons:
- The category benchmark went red (which means the whole category was sustaining losses) in 2013 but only this fund managed to register a 9.6% growth.
- In 2011, Sensex took a hit and dropped by 31%. While all other players in the category sustained 31% loss, this SIP fund emerged victories by containing its losses to only 18.3%.
HDFC Mid-cap Opps Fund has ₹ 7,925 crores of AUM.
Reliance Equity Opportunities Fund
Reliance Equity Opportunities Fund operates with a diversified portfolio of stocks from companies operating in different sectors of the economy. However, the fund selectively targets the sectors. Sectors are selected for investment only and only if they are under DIRECT INFLUENCE of three factors – foreign direct investment (FDI) flow in Indian economy, economic reforms made by government and infrastructural changes implemented in the country. This SIP plans stands victorious in its category with a stellar performance of 22% compounded annual growth rate for 5 years in a row, beating the category average of 19% and 10.2% benchmark set by S&P BSE 100. With an AUM of ₹ 7,603 crores, this fund is one of these SIP plans for 2015.
Franklin India Smaller Companies Fund
It is a long-term player and aims for capital appreciation by spreading the investment between small-cap and mid-cap companies. The fund allocates up to 75% of investment money in small-cap companies. In last 5 years, the fund maintained annual compounded growth rate of 24%. Comparing the performance again benchmark and category average, the benchmark set for the category by CNX Midcap is 11.5% and the entire category averaged at 18.9%. The fund is often known as smaller stocks fund because it invests more in small-cap companies. Franklin India Smaller Companies Fund manages assets worth ₹ 988 crores.
UTI Equity Mutual Fund
This is yet another SIP plan that outperformed the category benchmark of 10.3% set by S&P BSE 100. With consistent 16% annual returns for last half decade, the fund spreads the investment in 80-20 ratio. 80% money is pumped into volatile equity and its related instruments which remaining 20% goes in less turbulent money market and debt instruments. The fund manages asset of ₹ 3,770 crores.
Franklin (I) High Growth Cos Fund
If an Indian company displays a promising growth trend or is actually in a growth spree, Franklin (I) High Growth Cos Fund will invest money in their stocks. However, the companies need to have a balanced trade off when it comes to growth, risk and valuation. Simply put, not only the companies need to have high growth, they also need to maintain moderate risk. High risks mean high returns and hence high growths but at the same time, high risks also mean high probability of failure. So, companies need to have proper risk management in place so that a sustainable yet high growth is achieved which will eventually help to increase the valuation of the company. Companies that cannot manage risk properly are not good choices for investment. From 2010 to 2014, the fund maintained 20% compounded annual growth rate. Put in perspective, the category players averaged at 14.3% and the benchmark for the category has been set at 10.3% by CNX 500. This SIP plan manages ₹ 800 crores.
ICICI PruFocussed Blue Chip Fund
The name speaks for it. This SIP plan invests money only and only in Blue Chip companies. If the total asset is less than ₹ 1000 crores, the fund will select top 20 large-cap companies (based on market capitalization) from the top 200 companies trading in National Stock Exchange (NSE). In case the asset grows over ₹ 1000 crores, the plan will start investing beyond top 200 stocks on NSE. For last 5 years, the fund churned out 17% compounded annual growth rate, which was 6.2% above the 10.8% returns of CNX Nifty. The fund manages assets worth ₹ 6,676 crores. This is particularly good for those who are looking forward to 10+ years of investment, i.e. long term investment.
HDFC Top-200 Fund
This fund looks for growth by spending 10% investment in stable money market and debt instruments and pushing the remaining 90% in equity instruments. The fund handpicks stocks from BSE 200 Index and occasionally from India’s largest capitalized 200 companies. This fund delivered 15% compounded growth rate over last 5 years. Looking further back, in last one decade, the fund averaged at 20% annual returns in different market cycles. With AUM of ₹ 13,670 crores, this is one SIP plan that you should be looking at in 2015 in case you are in for a long haul of at least 10 years.