Best SIP Options for 5 Years
Best SIP Options for 5-Year Investment Goals
“Hello viewers, if you are looking for the best SIP for 5 years and don’t care about the market situation, and just want it, then this blog is for you. “We all know that mutual funds are typically meant for long-term goals, which means you need to start investing and gradually contribute over time. The idea is to stay invested for a longer duration. However, some people often ask, ‘We don’t have that much time. Can you just tell us about a 5-year investment? They want to know what the options are, which funds they should think about, and how much they might make if they take their money out after five years. Five years may seem like a small time, but in order to optimize profits, it is imperative to make the proper decisions throughout this time.
How to Distribute ₹10,000 in SIP for Optimal Returns?
“I will tell you how, in 5 years, you should allocate funds in small-cap, mid-cap, and large-cap categories based on returns, and how important the percentage-wise allocation is.”If you are investing in small-cap, you can allocate 40% to small-cap, 40% to mid-cap, and 20% to large-cap or flexi-cap funds. But the point here is that you are investing for only 5 years. Now, if you have decided to invest for 5 years, I will tell you the simple approach. First, you should avoid small-cap funds. If your goal is to save for your child’s marriage or higher education in 5 years, or if you have set a target, you definitely need to withdraw the money in 5 years. So, I will tell you that you should invest in mid-cap category funds. If you are planning an SIP of ₹10,000 for 5 years, at least ₹4,000 should be allocated to mid-cap funds.”
“If you are not choosing small-cap, what you need to invest in is mid-cap category funds, 40%. This means you need to allocate ₹4,000 to mid-cap funds. What else do you need? You need to invest ₹4,000 in large-cap category funds. Keep in mind, you’ve invested ₹4,000 in mid-cap and ₹4,000 in large-cap category funds. Now, you need to invest ₹2,000 in flexi-cap category funds. Let’s see which are the best funds from these three categories. If you are investing ₹4,000, which funds can you choose? First, I will turn on the screen recording so you can exactly see what I am trying to show you. This will help you understand which funds to pick. If you are planning an SIP of ₹10,000 and your target is only 5 years, then first, if you go to the mid-cap category, you will see the options. I will suggest that you definitely pick SBI funds, as they are one of the best SIP for 5 years.”
Solid Returns with SBI Magnum: 19.75% Over 10 Years
“If you’re looking for funds in the mid-cap category, SBI Magnum is definitely a fund you should consider. The reason is that it has delivered a return of 19.75% over the last 10 years, making it a reliable choice. Now, if you’re planning an SIP of ₹10,000, you should allocate ₹4,000 to mid-cap funds, as I mentioned earlier. As I said, SBI Magnum has been giving a solid return, and you can expect around 15% return in the future as well. The fund size is good, and the holdings are strong. Companies like Page Industries and Triveni Turbines are part of the portfolio, making it a strong choice for mid-cap investments.”
HDFC Mid-Cap: 20% Return Over 10 Years
“Now, look, the experience we always need to check is that when investing in any company, you should ensure that the cost you’re paying is as low as possible because there’s always a fund manager’s fee. You would want the fund manager’s fee to be minimal, right? Always look for funds with a low fee. Here, it’s 0.97%, which is quite reasonable. The fund has been around since 2013, so it’s a 9-10-year-old fund. The fund is solid. If you’re planning an investment of ₹4,000, you can allocate ₹2,000 to SBI Magnum and another ₹2,000 to HDFC Mid-Cap category fund. “HDFC Mid-Cap is a recommended option because it has delivered a return of 20% so far and has been around for 10 years.” I always suggest the same type of funds—those that are old, with strong fundamentals and stocks, and whose holdings include companies with very strong growth potential. It’s important that your mutual fund’s contribution stays in such companies for long-term growth. The rating is good, and the fund size is solid.”
Max Healthcare, Polo Tyres, and Indian Bank: Solid Holdings for Growth
“39,000 crores had already been invested, and the holdings were strong. The solid holdings included Max Healthcare, Polo Tyres, and Indian Bank. The experience ratio was 0.1%, with fund management since 2013, meaning it had over 10 years of experience. The holdings were impressive, with 93% of the money invested in HDFC. This indicated that either the market would perform well quickly, or if the market slowed down a bit, the returns might have been slightly lower. But overall, the fund allocation looked very solid. After choosing two mid-cap category funds, I then decided to go for a large-cap fund. One option I found was ICICI Prudential Fund, which seemed like a good choice.”
“It wasn’t necessary for me to say it, but I would suggest that you consider it as well. This is a good fund, and you should search for it in the large-cap category. Recently, the World Bank had mentioned that India’s top three banks are among the safest. If you talk about SBI, HDFC, or ICICI, these are very safe funds and banks. So, I would talk about ICICI. Overall, it had provided returns of about 14%, almost 15%, with the help of this fund. Large-cap category funds are usually the most fundamental and strong. These are companies that cannot easily be shaken. Even if a situation arises, the company remains fundamentally strong, and it doesn’t make much of a difference. So, in this case, the average return was about 14-15%, with a very good rating. The holdings were always top-class, including companies like ICICI Bank, Reliance, Infosys, and Axis Bank, which are the most important and fundamental companies. That’s why I recommended ICICI Prudential Fund.
“Best SIP for 5 Years High Returns with Blue-Chip and Flexi-Cap Funds”
“When looking for the best SIP for 5 years in India, you can also consider a blue-chip fund. So far, it had also given about 14-15% returns. The fund size was decent, and the holdings included companies like HDFC, ICICI, and Infosys, with shares ranging from 5% to 9%. You can see that we’ve now considered both mid-cap and large-cap categories. Our target is to redeem the money in 5 years without any stress. I will suggest you to invest 4000 in the large-cap category. The remaining 2000 can be invested in a flexi-cap fund. If I were to suggest a flexi-cap fund…”
“In the flexi-cap fund category, there were many important funds in which you could have invested. In a flexi-cap fund, the fund manager is flexible, meaning they can allocate funds wherever they want. Overall, HDFC Flexi-Cap Fund had given a return of 15%. I am telling you about this fund category where you could have received 13-14% returns. The fund size was 34,000 crores. The holdings included ICICI Bank, HDFC, Bharti Airtel, NTPC, and Hindustan Aeronautics Limited. These are great companies, and if you were into shares, you could have bought Hindustan Aeronautics Limited, which also gives dividends and has been a good stock for long-term investment. Best SIP for 5 years investment.”
“Parag Parikh Flexi-Cap Fund: A Solid Choice for 5-Year Investment with Strong Returns”
Another fund I really liked was Parag Parikh Flexi-Cap Fund, which had diversified returns. Overall, it had given almost 19% returns, and in the last five years, it provided 18%. Many funds gave excellent returns over the last three years. That’s why I am telling you that no matter the situation, you should not be afraid to continue investing in the market. It’s possible that a correction may come again, but those who continued investing during the Covid crisis and kept investing large sums saw very good returns.
The holdings were great, including companies like ITC, Bajaj Holdings, and Axis Bank. The fund had given a return of 0.72%. If you had invested ₹10,000, it would have been a good choice. I would definitely recommend that if you were investing ₹10,000, it might have been better to wait a little longer before withdrawing, but overall, if your target was five years, it would have been a great option. I wouldn’t suggest small-cap category funds, though.”
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