Best SIP Returns: Analyzing Historical Performance & Choosing Top Mutual Funds

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The choice of SIPs plays a pivotal role in your financial journey. And understanding the historical performance of top mutual funds becomes critical in making the right decisions. This post delves deeper into the intricate process of analysing the historical performance of leading SIPs, providing valuable insights for investors. By going through this blog, you will be armed with the required knowledge to make judicious choices and make the best sip returns. Let’s dive in!

What are SIP Returns?

SIP returns signify the gains earned by investors through regular investments in mutual funds. Calculated by assessing the compounded growth of the invested capital, SIP returns provide an overview of the investment's performance over time. SIP returns reflect the financial health and growth potential of the investment.

Selecting Top Mutual Funds

To select the right mutual fund, consider your investment horizon and risk tolerance. Ask yourself how long you plan to invest and how much risk you're willing to take. This guides you to the appropriate mutual fund category.

One to Three Years: Opt for Debt Funds
Three to Five Years: Explore Hybrid Funds
More Than Seven Years: Venture into Equity Funds

Expert Tip: Equity mutual funds are recommended for investment horizons exceeding five years.

Critical Things to Consider When Selecting a Mutual Fund

Downside Protection: Ensure the fund provides adequate downside protection, avoiding scenarios where positive returns in one year are followed by significant losses in the next.
Return Consistency: Evaluate the fund's return consistency over the years. Consistent returns, even if moderate, often outperform irregular high returns.
Fund Manager: Assess the fund manager's track record. A skilled manager can transform an underperforming fund into a top performer. The manager's decisions impact the fund's stock choices and overall performance.

Historical Performance Analysis

Historical performance analysis of selected mutual funds involves meticulous analysis of detailed data. Examining returns across diverse time frames, such as 1 year, 3 years, 5 years. It serves as a key to understanding fund dynamics. This comprehensive evaluation allows investors to gauge consistency and adaptability over various market conditions. The performance comparison against benchmark indices further provides a benchmark for assessing a fund's relative success.

Risk and Return Trade-off

As we study the historical performance of top mutual funds. It becomes evident that risk plays a pivotal role in the calculation of SIP returns. Understanding this dynamic aids investors in making informed decisions. Balancing this risk-return equation requires strategic approaches. Diversification, careful asset allocation, and periodic portfolio reassessment are key strategies for mitigating risk in SIP investments. This brief exploration underscores the essential nature of comprehending risk and return trade-offs when optimising SIP returns.

Monitoring SIP Investments

Monitoring SIP investments is vital for informed decision-making and aligning portfolios with financial goals. Here are some ways to monitor your investments regularly:

Daily NAV: Published on fund and AMFI websites, the Net Asset Value (NAV) provides daily insights into the investment's value. Multiply the NAV by the number of units to calculate the investment's worth.

Monthly Portfolio: Fund houses release monthly portfolios detailing securities and their weightage. Fact sheets contain crucial information to comprehend portfolio risks.

Consolidated Account Statement (CAS): Issued monthly (if there were transactions) or half-yearly, CAS records all transactions and investment values on a given date.

Key Changes to Fund: Email notifications alert investors about significant scheme changes. Some changes may necessitate an exit option, as mandated by SEBI.

Tracking Websites: Aggregator websites offer comparisons between schemes. By checking investment details, investors can gain a snapshot of scheme performance, aiding in informed decision-making.

Conclusion

This exploration of SIP investments highlights essential considerations for informed decision-making. As you embark on your investment journey, remember that historical performance is not just a record; it's your guide to realising the best SIP returns.

Frequently Asked Questions (FAQs)

Q: Which SIP gives the best returns?

A: The top-performing SIPs have shown remarkable growth. They reach up to 18% or even more in a span of 15 years.

Q: Can we get a 15% return SIP?

A: Yes, top-performing SIPs show a growth exceeding 15% over a period of several years.

Q: Which SIP gives the highest return in 1 year?

A: SIP returns vary, and it's essential to consider the historical performance of specific funds for accurate information.

Q: Can I withdraw SIP anytime?

A: Yes, you can withdraw money from your SIP at any time.

Q: Is it safe to invest in SIP?

A: SIP is one of the safest investment methods in mutual funds.

Q: Can I stop my SIP after 1 year?

A: Yes, you can stop your SIP at any time.

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Disclaimer: This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. The Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Article. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from the Bank. The Bank, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein. Tax laws are subject to amendment from time to time. The above information is for general understanding and reference. This is not legal advice or tax advice, and users are advised to consult their tax advisors before making any decision or taking any action.

Best SIP Returns: Analysing Historical Performance of Top Mutual Funds