Investors find that a SIP investment is a prudent way to grow wealth. With a SIP or Systematic Investment Plan, you can choose a mutual fund to allocate your capital to, investing on a regular schedule. Many forms of investment involve you investing a lump sum initially. However, with a SIP investment, you can gradually invest small sums intermittently. This is beneficial to small investors or first-time investors and helps them get used to financial planning. 

SIPs are fruitful ways of making investments, letting investors plan investments based on needs and financial goals. Systematic Investment Plans also allow you to learn how to budget your income. By utilizing a SIP calculator, investors can gain valuable insights into the growth of their investments over time. Mutual funds mainly offer you the investment choices of a SIP, a lump sum investment, or both ways of investing. Since you, the investor, have an option of investing in the mutual funds of your own choice, how do you know which to pick? The recommendations here may be helpful for the best SIP to invest in. However, before you check the list, you should pay attention to aspects of how choices are made.

 The Basics of a SIP

You have probably heard the often-mentioned warning that “mutual funds are subject to market risks…”, and this may have prevented you from earning some good income from a mutual fund investment. Although mutual funds invest in the markets, you can find many to suit your individual needs and some that mitigate market risks. A SIP is an excellent method to invest in a mutual fund if you are wary of putting a bulk of your capital in mutual fund investment. 

As a SIP allows you to make gradual investments in a mutual fund, you can invest small amounts of capital regularly. This means you can invest and be attentive to the performance of your fund at the same time. In case you do lose out, you only stand to lose a minimal amount. This mitigates your risk. The best SIP plans are those that come from top asset management and financial companies, and with a history of optimal performance, you can be almost assured that you will make gains. SIPs are suitable for small investors, investors who are averse to risk, and young investors who wish to tread the investment in stocks path carefully, to begin with. 

SIP Investment Based On Your Aims

You can easily opt for a SIP online, and the process of investing is easy. The hard part is choosing the right mutual fund to invest in through a SIP. The first thing you need to do is to assess yourself as an investor. If you are conservative and don’t want to be really risky, you can select a hybrid fund or a large-cap equity SIP. Hybrid funds invest their capital in stocks and other securities like bonds which may be relatively risk-free. This way, you counter the risky effects that the stock market poses with funds that can make you earn a profit, although this may not be as substantial as that earned from a pure equity fund. Contrastingly, if you are aggressively risky, you may choose Flexi Large-Cap funds, and mainly in the equity markets. These SIPs can be good for long-term investment purposes, and if you require a corpus for the future, SIPs such as these help you. Also, with a SIP like this, the risk is high, but the rewards over a period are also very substantial. Such SIPs invest in stocks of companies that are labelled as “blue chip” and have shown great performance in the past. If you fall in the category of “neither here nor there” (moderate risk), you can select a large-cap equity fund along with a hybrid fund or a conservatively hybrid fund. 

You must look at your unique needs as an investor before investing. The risk factor is not the only thing to consider. You may also want to check your time horizon and your budget for investment. For instance, if you do not require capital in the very near future, you can afford to invest in a SIP that allocates your capital to a pure equity large-cap fund. This may do well in the longer term. As with direct equity investment, SIPs held over long periods give you significant rewards. The best way to decide what SIP is good for you is to use a SIP return calculator. 

The Best SIPs - Top Mutual Funds to Invest in 2022

To invest in a SIP, you do not have to open a Demat account, even though your mutual fund through a SIP may invest in equity. Hence, any asset management company can be the source of your Systematic Investment Plans, and due to technological advancements, Demat accounts are not required. Anyway, here are the best SIPs to consider in 2022:

• For Risk-Averse Investors 

1. Axis Bluechip Fund - Direct Plan Growth (Large-cap Equity)
2. ICICI Prudential Regular Savings - Direct Plan Growth (Hybrid)
3. Quant Infrastructure Fund (Equity)
4. HDFC Credit Debt Risk Debt Fund - Direct Growth

• For Moderately Risky Investors 

1. Mirae Asset Large-Cap Fund
2. Robeco Bluechip Equity Fund - Direct Growth Plan
3. Quant Absolute Fund Direct Growth
4. Baroda BNP Paribas Hybrid Fund

• For Risk Takers

1. BOI AXA Small Cap Fund Direct Growth
2. Quant Tax Plan Direct Growth
3. Mirae Asset Tax Saver Fund
4. Kotak Bluechip Fund
5. Axis Bluechip Fund

 

Any top-performing SIP will suit you as long as you are fully aware of your own financial objectives. The key to making sensible and advantageous investment decisions is to plan according to your individual requirements. This means you must consider your investment budget and the financial milestones you wish to achieve in a certain timeframe. A SIP is excellent for frequent investment instalments and serves the purpose of avoiding a bulk lump sum investment that you have to make initially with a regular mutual fund. A SIP has you saving a part of your income and making that capital grow over time, and you get the benefit of compounding, which can build a corpus gradually.

You Know Best

Stocks are a go-to form of investment for many individuals who open a Demat account for the same. However, stocks may not be for every type of investor. Moreover, you may get all kinds of advice to invest in  the “best SIP investment” in 2022, but really, you must invest in some research before you invest at all. Find out if a SIP is a good investment route for you and if it matches your needs. Other sensible forms of investment, like any upcoming IPO, are good investment bets, and you should explore the market and make choices.

 

Related Blogs: 5 reasons for the sharp growth in SIPs in India | Tax implications on a Mutual Fund and SIPs | SIP and the power of compounding 

 

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