2 Apr 2022
Let’s talk about SIPs today and why you should consider this tool in your investment journey.
Systematic Investment Plans, or SIPs, allow investors to invest a fixed amount of money in a mutual fund scheme of their choice at regular intervals. The other way to invest in mutual funds is in lump sum amounts, where you invest in the mutual fund whenever you have the funds.
While investors can choose either of these methods, having an SIP has several benefits, the foremost of which is the discipline of investing.
We often tend to defer investments month after month, thinking that big expenses are a one-off and are unlikely to be repeated. Unfortunately, something or the other often creeps up, coming in the way of the disciple in investing. When you opt for SIPs, that amount gets invested in the chosen fund in an automated way, eliminating the emotional aspect of investors.
The other advantage of SIPs is that it helps in averaging costs of investment and takes away the need to time the market. When you invest in the chosen fund at a predetermined date at the decided interval, you automatically buy the fund at all levels, high and low, over the long term.
Take, for instance, the Kotak Smallcap Fund.
If you had invested ₹10,000 per month in the fund since its inception on Feb 24, 2005, your investment would be worth over ₹1.12 Crores as on Feb 28, 2022, which amounts to a 17.66% return year-on-year (CAGR)*.
This fund looks to generate capital growth over the long run with investments in companies in the small-cap space and can be considered to start your SIP journey!
Click here to Start your SIP journey in Kotak Smallcap Fund today!
*Past performance may or may not be sustained in the future
*Data is for the Kotak Smallcap Fund - Growth Option (Regular Plan)
Kotak Smallcap Fund is managed by Mr. Pankaj Tibrewal. View the funds managed by him here.
Mutual fund investments are subject to market risks, read all scheme related documents carefully.