A type of investment known as the Systematic Investment Plan (SIP) involves the investor choosing a mutual fund in accordance with their preferences and regularly investing a predetermined amount in that fund. Instead of investing all at once, a Systematic Investment Plan makes incremental investments.
The Flexicap fund from Kotak has performed exceptionally well over the long term. In terms of percentage, this equity mutual fund’s returns on a monthly SIP of Rs 10,000 have typically been in the triple digits. Over the course of 13 years, the initial investment in this MF program, which was Rs 15.90 lakh, has grown to over Rs 46 lakh.
The Kotak Flexicap Fund is said to be the largest open-ended equity fund in India. Since September 2009, this MF scheme has survived and even thrived through the Eurozone Crisis, Quantitative Tightening, Demonetization, Covid, and other events.
Livemint’s analysis of Kotak Mutual Fund data reveals that the Kotak Flexicap Fund has grown from an initial investment of Rs 1 lakh in 2009 to a current value of Rs 5.6 lakh.
The plan, on the other hand, demonstrates why SIPs offer superior returns to other investment vehicles. The initial Rs 10,000 monthly SIP that investors made in the Kotak FlexiCap Fund now has a value of Rs 45.84 lakh. The compound annual growth rate (CAGR) for a one-time investment of Rs 1 lakh is 13.9%, while the CAGR for a monthly SIP of Rs 10,000 is 14.8%.
Structured investment plans (SIPs), which allow investors to regularly set aside money for use in a variety of mutual fund schemes, are frequently offered by mutual funds. A systematic investment strategy like a SIP could be very useful and disciplined.
