If a potential investor has a long-time horizon, they might consider investing in small-cap mutual funds. Small-cap mutual funds would therefore be the best equity investing choice for someone with an investment goal that spans 7 years or more.
The systematic investment plan, or SIP, offers several advantages, including long-term returns, the ability to withdraw funds or change the amount invested, regular savings, and the ability to make small deposits. The SIP mode is an appropriate investment option for those who don’t have a lump sum but wish to watch their assets grow from small monthly payments to a sizable corpus over time.
SIP is one of the best stock investment techniques for long-term investors who want to outperform inflation increases. SIPs for mutual funds are very well-liked since they give investors a lot of flexibility.
What is SIP?
A Systematic Investment Plan (SIP), also referred to as SIP, is a tool provided by mutual funds to help investors make disciplined investments. The SIP option enables an investor to make fixed investments in the mutual fund scheme of their choice at pre-determined intervals.
The pre-determined SIP periods might be weekly, monthly, quarterly, semi-annually, or annually. The fixed amount of money could be as low as ₹500. Due to average costing and the power of compounding, an investor who chooses the SIP way to invest can do it in a time-bound manner, not worrying about the state of the market.
What is a SIP calculator?
Capital flows into Indian mutual funds through systematic investment plans (SIPs) now total approximately Rs. 8,500 crores monthly. The SIP AUM represents more than 40% of the total AUM of the equity fund sector. There are two different outputs from the SIP calculator. First, it explains how much your SIP would increase over time, assuming a specific rate of return. The MF calculator SIP also shows you how much monthly SIP investment you need to make to attain your target corpus for your financial goals.
The SIP calculator is a two-way tool that assists you in estimating the goal amount in both directions. The SIP calculator provides the targeted amount or the target SIP savings amount per month.
The SIP calculator is a two-way tool that assists you in estimating the goal amount in both directions. The SIP calculator provides the targeted amount or the target SIP savings amount per month.
Mutual Fund Return Calculator
This small-cap mutual fund SIP has generated an annualized return of about 24.70% and an absolute return of about 94% during the last three years. The annualised category return during this time frame is about 22%. While this fund’s total return over the past five years is 123.68 percent, its annualised return over that period has been 17.45.
The category return throughout this period is 13.60%. Similarly, since its launch on September 16, 2010, this mutual fund plan has generated an annualised return of almost 20%. Still, it caused an absolute return of more than 750% during the same period.
How does the SIP calculator work?
Here is an example of how a SIP calculator is used.
- It assists you in figuring out how much to invest in SIPs to attain your goal corpus after a particular number of years.
- The SIP calculator also provides you with the target total that, following your projections, your current SIP will grow too.
- You may get a sense of the wealth ratio using the SIP calculator, which divides your capital into your contribution and rate of return amounts.
Depending on the state of the market, the return on SIP will change. The expected returns could vary depending on whether it rises or falls. Make informed assumptions.
Bottom Line
Three years ago, an investor could have made ₹5.86 lakh if they had contributed ₹10,000 per month to this plan using the SIP method. The investor would have received ₹10.49 lakh if they had begun a ₹10,000 monthly SIP five years earlier. Similar to how it would have changed seven years ago, if an investor had started a ₹10,000 monthly SIP in this small-cap mutual fund plan, that amount would now be ₹17.58 lakh.
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