A recent study by brokerage firm Geojit showed that 74% of 5-year SIP returns on the Sensex were above 10% CAGR, while 60.7% of the time, the returns were above 12% CAGR, demonstrating the power of long-term investing. While SIPs cannot guarantee returns in all market conditions, they can help mitigate the impact of short-term volatility. Continuing with SIPs during periods of lower returns can lead to better long-term performance.
The study further found that over 93.5% of the 10-year SIP returns on Sensex exceeded 10% CAGR, while 78.6% of the time, the returns were higher than 12% CAGR, showing that longer investment horizons increased the probability of achieving higher returns. While market cycles may influence short-term performance, the long-term trend remains positive for SIP investors.
Monthly investment on the 1st of every month from 1st August 2023 to 1st July 2024. Valuation date: 31st July 2024. Total investment: Rs 12,000
Source: Based on data compiled by PL, the wealth management arm of brokerage Prabhudas Liladhar.
- Small-cap and flexicap funds have consistently outperformed their peers,
- The presence of funds from various asset classes highlights the importance of diversification in achieving long-term returns.
- While some funds have generated higher returns, it is essential to consider the associated risk factors.
- Investors should carefully evaluate their risk tolerance and investment objectives before making investment decisions.
While the funds mentioned above have delivered impressive results, past performance is not indicative of future returns. Investors should conduct thorough research or consult with a financial advisor before making any investment decisions.
A regular SIP involves investing a fixed amount on a constant basis. However, a top-up SIP offers the flexibility to increase the investment amount periodically. This can be done in two ways:
- Fixed Amount: Increases the SIP amount by a predetermined fixed amount at regular intervals.
- Percentage Increase: Increases the SIP amount by a specific percentage of the original investment amount.
Source: Geojit Insights
Disclaimer: Please remember that investing in mutual funds involves risks and there is no guarantee of consistent returns.
First published: August 21, 2024 | 09:17 IS
Disclaimer:
The information contained in this post is for general information purposes only. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the post for any purpose.
We respect the intellectual property rights of content creators. If you are the owner of any material featured on our website and have concerns about its use, please contact us. We are committed to addressing any copyright issues promptly and will remove any material within 2 days of receiving a request from the rightful owner.