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Unveiling The 5 Best SIP Mutual Funds For A 5-Year Investment Strategy

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Published Date: 29 Apr 2024Updated Date: 27 Dec 20246 mins readBy MOFSL

Introduction:

Mutual funds have emerged as a popular investment vehicle among new-age investors. They pool money from investors with common investment objectives and invest them in stocks, bonds, and other money-market securities. You can invest in mutual funds to provide diversification to your portfolio and earn handsome returns in the long term.

Additionally, you can choose to invest through any of the two methods – lump sum and Systematic Investment Plan (SIP). Out of them, the SIP route allows you to make disciplined investments in a mutual fund scheme of your choice and create a large corpus over time. 

 

What is SIP?

SIP is a disciplined approach to investing. It allows you to invest a fixed amount at regular intervals, typically monthly or quarterly, into selected mutual fund schemes. SIPs offer you the benefit of rupee cost averaging and the power of compounding over time. By spreading your investments across different market conditions, SIPs help mitigate the impact of volatility and accumulate wealth steadily. It's a popular investment strategy among those seeking to achieve long-term financial goals such as retirement planning, education funding, or wealth accumulation.

 

Top SIP Mutual Funds in India

If you plan to start an SIP in a mutual fund but are confused about which mutual fund to choose, you need not look further. Below are the best mutual fund schemes in India for long-term SIP in 2024:

  1. HDFC Mid-Cap Opportunities Fund

HDFC Mid-cap Opportunities Fund is one of the best SIP mutual funds in India. It predominantly invests in the stocks of mid-cap companies in India. Approximately 52.58% of the investments are in mid-cap stocks, 5.57% in large-cap stocks, and 18.09% in small-cap stocks. The fund is particularly suited for investors with a mid-term investment horizon of four to five years. However, it's important to note that this fund carries a high level of risk and may not be suitable for those seeking a conservative investment approach.

 

  1. ICICI Prudential Bluechip Fund

ICICI Prudential Bluechip Fund is one of the best mutual fund schemes in India for investors who want to start a SIP for three to five years. The fund allocates 91.39% of its investments to Indian stocks, with 81.37% dedicated to large-cap stocks, while 4.85% is in mid-caps, and the rest is in small caps. Additionally, a small percentage, 0.47% of the fund's investment is in debt instruments, primarily government securities. This diversification strategy aims to balance exposure across different market segments while also providing some stability through investments in debt securities.

 

  1. Mirae Asset Large Cap Fund

Mirae Asset Large Cap Fund is another popular mutual fund scheme in India among SIP investors. Like the ICICI Pru Bluechip Fund, this fund also invests majorly in the stocks of large-cap companies. The fund has consistently outperformed the benchmark, providing stable returns over the years. With a focus on quality large-cap stocks, it's an excellent choice for investors seeking stability and growth through SIP investments.

 

  1. Aditya Birla Sunlife Equity Fund

Aditya Birla Sunlife Equity Fund is the first multi-cap fund on this list. It means that this fund invests in selected companies with varying market capitalisations. It follows a blend of growth and value investing strategies, making it well-suited for various market conditions. Its diversified portfolio and consistent performance make it an attractive option for SIP investors with investment horizons of four to five years and a moderate risk appetite.

 

  1. Nippon India Small Cap Fund

Nippon India Small Cap Fund is among the top-performing small-cap mutual funds in India. The majority of the fund's portfolio is invested in equities, with a significant emphasis on small-cap stocks. Due to its high exposure to small-cap stocks, this fund is considered to be extremely risky. However, this risk is accompanied by the potential for substantial returns, making it suitable for investors seeking aggressive growth opportunities.

 

In conclusion

Choosing the right mutual funds for SIP investments is crucial for long-term wealth creation. While past performance is not indicative of future results, it's essential to consider factors such as the fund manager’s expertise, investment philosophy, expense ratio, and risk-adjusted returns. The top five mutual funds listed above offer a diverse range of options across market capitalisations and investment styles, catering to different investor preferences and goals.

 

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Disclaimer: The stocks, companies, or financial instruments mentioned in this blog are for informational purposes only and should not be considered as investment recommendations. It is advised to consult with your financial advisor before making any investment decisions. Investment in securities markets are subject to market risks, read all the related documents carefully before investing. Investors are strongly encouraged to carefully read the risk disclosure documents prior to participating in market-related investments or trading activities. Due to the volatile nature of financial markets, no guarantees can be made regarding investment returns. Motilal Oswal Financial Services Ltd. does not offer any assured returns on market-linked securities. Please note that past performance of stocks or indices is not indicative of future results.
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