Wednesday, August 10, 2016

SIP or RIP?




Ask any of the Financial Planner for a disciplined investment for long term wealth building. Answer would be investment in SIP scheme. What it means is Systematic Investment Plan (SIP) in a good Mutual fund for a long term plan is opted by most of the professionals. And, not just for long term but also for short term savings.

Systematic Investment Plan is a scheme where investor can invest a fixed amount on monthly bases. SIP also generates saving habits in investors. It allows buying of units of a particular fund on the amount invested. It is more preferable for equity.

SIPs are always beneficial to the investor as when the market is positive the returns are good whereas when the market is down it make more profit. After investing in this scheme, one can get a return of 12-15% annually.

The benefits don’t stop here, if Mutual fund helps to diversify the investment in a basket of securities, in addition SIP helps to diversify the time of investment as well. This is one of the key element focused while investing. Many small investors fail to adopt the advantage of investing in SIP. Destroying the whole purpose of SIP scheme by stopping the SIP scheme during market slump. The investor forgets the chance to buy more units at a lesser price.
In short, SIP (systematic investment plan) is far better than your valuable funds RIP (Rest in Pockets). Choice is yours. 

ICICI Prudential Value Discovery Fund: Daily Chart
























ICICI Prudential Value discovery fund is an open ended diversified equity fund, which aims at stock which are available at a discount to their intrinsic value through a process of ‘discovery’ this process is called as Fundamental research. This process involves indentifying companies that are well managed, fundamentally strong and are available at bargained price.

Portfolio Analysis: As per the sectoral holdings Banking/Finance have been most favored sector for this fund as it is contributing 20.94% to the entire portfolio followed by Engineering and Technology Sector. Top Holdings and Sector Allocation for this fund are shown below.



Top Holdings:
Company
PE
% Assets
Larsen &Tourbo
27.17
6.29
ICICI Bank
15.85
6.11
NTPC
12.75
5.69
Infosys
17.92
4.96
Sun Pharma
42.87
4.79

Sector Allocation:
Sector
%
Banking/Finance
20.94
Engineering
12.22
Technology
8.68
Pharmaceuticals
8.06
Automotive
7.84

Returns as on 01 August, 2016
Performance
Fund
1 Year
   3.91
3 Year
   36.15
5 Year
   20.41

Risk Profile: The risk is moderate in this fund as the investment is diversified among various assets. Average returns can be expected from this fund as the corrective phase of the market looks to be complete now we need to wait for prices to confirm. Investors looking forward for good returns with moderate risk should consider this fund for investments in staggered fashion or through SIP route.

In a nutshell, corrective action in this fund looks to be complete so investments in staggered fashion is advisable and SIP should turn out to be the best way as it will provide excellent cost averaging opportunities.

Invest NOW in ICICI Prudential Value Discovery Fund online – Clickhere


      


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