Equity Markets have rallied a fair bit and though Systematic Investment Plans (SIPs) tend to provided a hedge against a downside due to law of averages applying, we believe that investors who have made money through Equity SIPs, should look at balanced funds. Here are 5 SIPs from SBI Mutual Fund, which investors can consider.
SIPs for a diversified portfolio
|3-year returns||5-year returns|
|SBI Equity Hybrid Fund||19.03%||14.01%|
|SBI Bluechip Fund||20.23%||13.57%|
|SBI Banking and PSU Fund||8.25%||7.51%|
|SBI Small Cap Fund||27.98%||17.16%|
|SBI Magnum Gilt Fund||10.52%||7.95%|
The right approach for SIP investors now
With the equity markets at record highs, we suggest that investors who have made good money by investing through SIPs in the last 2-3 years, move money to either balanced funds or to debt funds. We are not suggesting that you take-off all the money. It really depends on your age. If you are in your 40s, then you would not want to take 100% exposure to equity SIPs.
What we have done in the above table, is given returns and information about balanced fund (SBI Equity Hybrid Fund) as well as high risk small cap fund, as well as largecap fund (SBI Bluechip Fund) and the low risk debt funds like (SBI Magnum Gilt and SBI Banking and PSU Fund).
If you are entirely exposed to equity mutual funds by way of SIPs it maybe time to readjust your portfolio, given that you are making profits already. Another good way is to limit your SIP exposure and than gradually increase the same, once the market falls in case you want to invest in pure vanilla equity funds. Most of the mutual fund schemes of SIP begin with a small amount of Rs 500 each month.
Also, when investing in SIPs it would be a good idea to look for the ratings accorded by some noted agencies like CRISIL.
Investing in mutual funds poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies and the author are not liable for any losses caused as a result of decisions based on the article. The above article is for informational purposes only.