Money: Booster SIP and Value Fund Better in terms of returns, know the maths of investing in an equity fund
So far the fund industry has not focused much on booster SIP. But now it is slowly being introduced. Recently, the fund industry launched the first booster SIP. Investors have benefited from an annual compound interest rate of 21.4% if its returns are seen as the basis for investment in 2019. While general SIP has increased by 18.3% over the same period.
Despite the volatility in the stock market, mutual fund equity fund schemes received over Rs 18,000 crore last month. This shows that investors rely on these schemes for safe and good returns. Ajit Singh's report explains the maths of investing in equity funds like value and booster SIP.
Chintan Hariya, Product and Strategy Head, ICICI Prudential Mutual Fund, says that like installments, a fixed amount is deposited every month.
Most people in the mutual fund industry know about Systematic Investment Plans (SIPs). In this, a fixed amount is deposited every month like loan installment. But now Booster SIP is also coming. It pays more than a normal SIP. With this facility, a small amount of the original installment is invested when the market becomes expensive.
Conversely, when valuation becomes cheaper, it puts more pressure on the investment. For example, if the principal installment is Rs. 10,000 depending on the market conditions. 100 to Rs. Invests anywhere between 1 lakh. Booster SIP takes advantage of the average cost of Rs. It is based on the in-house equity valuation index.
Stock selection
Value funds wisely choose stocks of companies whose value is less than their potential value.
There can be many reasons for a drop in price. There could be a sharp decline in the market and cyclical changes.
However, despite all this, there has been no change in management or any fundamental change in the company.
Big advantage to the investor
A disciplined approach to regular investment is a big advantage for the investor as he does not need to actively track the market.
Booster SIP invests in equities and debt. This facility helps the investors to get maximum benefit from the volatile market conditions.
It also helps people who are willing to invest for a long time.
Launch of Booster SIP
So far the fund industry has not focused much on booster SIPs. But now it is slowly being introduced. Recently, the fund industry launched the first booster SIP.
Investors have benefited from an annual compound interest rate of 21.4% if its returns are seen as the basis for investment in 2019. While general SIP has increased by 18.3% over the same period.
Invest where money is safe,
Experts say the market is currently expecting a rally in the near future. In such a state of volatility, investors should go for Booster SIP or Value Discovery Fund route.
Markets around the world are seeing a decline. The trick is to invest money where the investment is safe and gives average returns.
Value Discovery Funds invest when they have the opportunity to invest at a discount, which is currently available in the markets.
Keep every detail of the company
A typical investor should keep an eye on every detail of the company. Value Discovery Fund is a better fund for achieving long term financial goals because the strategy that these funds follow to invest in equities is unique. This means that the fund buys any stock when its value has fallen to a very low level. More than this is likely to pay off. You can get better returns by following this fund strategy. -Atulesh Jain, Promoter, WCFA Finserv
11-Apr-2025