MFI Supplements 2019 11 PDF

TH
FUND India’s
ANALYST’S Finest
CH ICE Funds
FUND
ANALYST’S
CH ICE
INDIA’S
FINEST FUNDS
As a field, investing is still
intriguing yet confusing for many
investors have been bombarded
with today.
The need-based categorisation is
not restricted just to growth. If
Indian investors. Who doesn’t So, while over the years, we your goal is capital preservation
want to grow one’s money after have spread the idea of mutual and not as such growth, we have
all? However, the plethora of fund investing, we have also the required funds. If you want to
investment options available today simplified it. The culmination of derive regular income in
have made it difficult for the that simplification is this book. retirement, we have the funds in
layperson to choose the best Here we have listed the best funds place. All in all, the need-based
suitable option. based on your need, along with categorisation will help you pick a
At Value Research, over the last the key metrics. The major idea suitable fund without worrying
many years, we have developed an here is ‘need’. As against the about their underlying categories.
investment ideology that revolves general categorisation, we have For the informed investor, direct
around mutual funds. But one may divided the funds by your plans are a better option as they
ask that even if someone were to requirement. For instance, rather are cheaper. In this edition, we
pick a mutual fund, even that’s not than putting all selected tax-saving have included direct-plan data as
a simple task. There are as many funds together, they have been well. With an advisor like Value
as 40 active AMCs today. These segregated as per their risk–reward Research, more and more investors
AMCs have their own roster of dynamics. So, you will find them are confidently picking funds on
schemes spread across categories. under growth funds, aggressive their own. Due to the absence of
SEBI’s categorisation has growth funds and even distributor commission, direct
provision for 10 types of equity conservative growth funds. We plans boost your overall returns.
funds, 16 types of debt funds and believe this need-based We hope that this supplement to
six types of hybrid funds, among categorisation is more suitable for the 17th anniversary issue of
others. A basic back-of-the- an investor who may not know the Mutual Fund Insight will be your
envelope calculation can reveal specifications of a category or may long-time companion in the jungle
that sheer number of options that have little interest in knowing it. of investments.
Performance Top quartile Second quartile Third quartile Bottom quartile

Consistency: = Among top 25% in the category = Among top 25–50% in the category = Among bottom 25–50% in the category = Among bottom 25% in the category
The left-most bar in a series represents the fund’s performance in the first quarter/year. Similarly, subsequent bars represent the fund’s performance in second, third and last quarters/years. For equity-oriented funds and equity-
savings funds, annual quartiles have been given. For debt funds, quarterly quartiles have been given.
India’s Finest Funds 3

FUND ANALYST’S CH ICE
Conservative growth funds

Contents International funds
Axis Bluechip Fund 5 Franklin India Feeder Franklin US Opp Fund 16
HDFC Hybrid Equity ICICI Prudential Global Stable Equity Fund
HDFC Top 100 Motilal Oswal Nasdaq 100 FOF
ICICI Prudential Bluechip Fund 6
ICICI Prudential Nifty Next 50 Index Fund Aggressive Growth funds
Mirae Asset Hybrid Equity Fund Aditya Birla Sun Life Tax Relief 96 17
Mirae Asset Large Cap Fund Axis Midcap Fund
Nippon India ETF Junior BeES 7 Franklin India Prima Fund
Nippon India Large Cap Fund Franklin India Smaller Companies Fund 18
SBI Bluechip Fund HDFC Small Cap Fund
SBI ETF Nifty 50 Kotak Emerging Equity Scheme
UTI Nifty Index Fund 8 L&T Emerging Businesses Fund
L&T Midcap Fund 19
Growth funds L&T Tax Advantage
Aditya Birla Sun Life Equity Fund 8 SBI Small Cap Fund
Axis Focused 25 Fund
Axis Long Term Equity Fund 10 Conservative growth & income funds
Canara Robeco Emerging Equities Fund HDFC Equity Savings Fund 20
DSP Tax Saver Fund ICICI Prudential Equity Savings Fund
Franklin India Focused Equity Fund IDFC Regular Savings
Invesco India Contra Fund 11
Invesco India Tax Plan
Short-term, low risk funds
HDFC Short Term Debt Fund 21
Kotak Standard Multicap Fund
IDFC Bond Fund Short Term Plan
L&T India Value Fund
Mirae Asset Emerging Bluechip Fund 14
Capital preservation funds
Mirae Asset Tax Saver Fund
Axis Liquid Fund 22
Motilal Oswal Multicap 35 Fund
HDFC Liquid Fund
Parag Parikh Long Term Equity Fund
IDFC Cash Fund
Principal Emerging Bluechip Fund 15
SBI Focused Equity Fund
Tata Equity PE Fund
Tata India Tax Savings Fund
4 India’s Finest Funds

REGULAR DIRECT REGULAR DIRECT REGULAR DIRECT
Conservative
growth funds Axis Bluechip Fund HDFC Hybrid Equity HDFC Top 100
SIP VALUE (lakhs) SIP VALUE (lakhs) SIP VALUE (lakhs)

` 8.48 ` 8.78 ` 6.82 ` 6.95 ` 7.36 ` 7.50

Worth of `10,000 monthly SIP over 5 years Worth of `10,000 monthly SIP over 5 years Worth of `10,000 monthly SIP over 5 years
PERFORMANCE (%) - REGULAR PERFORMANCE (%) - REGULAR PERFORMANCE (%) - REGULAR

Fund Equity: Large Cap Fund Hybrid: Aggressive Hybrid Fund Equity: Large Cap
2019 2019 2019
2018 2018 2018
2017 2017 2017
This list features our 2016 2016 2016
selection of large-cap 2015 2015 2015
funds, aggressive -10 0 10 20 30 40 -8 0 8 16 24 32 -10 0 10 20 30 40
hybrid funds as well PERFORMANCE (%) - DIRECT PERFORMANCE (%) - DIRECT PERFORMANCE (%) - DIRECT
as tax-saving funds Fund Equity: Large Cap Fund Hybrid: Aggressive Hybrid Fund Equity: Large Cap
(ELSS) that have a 2019 2019 2019
history of investing 2018 2018 2018
predominantly in the 2017 2017 2017

2016 2016 2016
stocks of big
2015 2015 2015
companies. When you -10 0 10 20 30 40 -8 0 8 16 24 32 -10 0 10 20 30 40
invest for five years or
The fund has beaten its category and Earlier known as HDFC Balanced The fund is managed in a ‘growth at
above in this class of benchmark by wide margins across Fund, it takes a steady-state a reasonable price’ style, with strong
funds, you can expect one-, three-, and five-year periods. It approach to allocation and invests pegs to the benchmark. A look-back
is a strong adherent of the ‘quality at 66–72 per cent of its portfolio in at the fund’s history shows that it
to earn more than the a reasonable price’ philosophy of equities, with the rest in debt. In its outpaced its benchmark and peers
inflation rate and the investing and focuses on companies equity portion, the fund targets by large margins in 2009 and 2014,
with a good management pedigree; a stocks with a good margin of safety, while containing downside to levels
rate of return on superior and scalable business maintains effective diversification and lower than the index in bear markets
fixed-income options. model; and superior return metrics in limits its investments to companies like 2008 and 2011. The fund’s time-
an attractive industry. The fund has of acceptable quality. In debt portion, ly shifts in sector and stock prefer-
Funds in this list tend also concentrated its portfolio on the duration is actively managed and ences have resulted in a strong 19
to fall less than the quality companies. It has pegged up the focus is on good-quality compa- per cent annualised return over its
cash/debt positions to about 21 per nies. The fund has managed an more than 20-year existence, which
ones in aggressive cent by August 2019. This has helped annualised return of over 15 per cent is no mean feat.
growth and growth it contain the recent market fall. since inception.
categories. This
EXPENSE RATIO (%) EXPENSE RATIO (%) EXPENSE RATIO (%)
makes them more REGULAR DIRECT REGULAR DIRECT REGULAR DIRECT
suited to conservative 0.01 2.00 2.79 0.009 0.83 2.22 1.29 1.77 2.68 0.24 1.17 1.80 0.01 1.88 2.79 0.009 1.31 2.22
and first-time equity
investors. Since these FUND MANAGER/S FUND MANAGER/S FUND MANAGER/S
are equity-oriented Shreyash Devalkar (2.9 yrs) Chirag Setalvad (1.3 Yrs) Prashant Jain (17.8 yrs)
funds, invest in them
through the SIP route.
QUARTILE PERFORMANCE QUARTILE PERFORMANCE QUARTILE PERFORMANCE
2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019
All data as on September 30, 2019. Total amount invested through SIPs over five years is `6 lakh and over three years is `3.6 lakh.

REGULAR DIRECT REGULAR DIRECT REGULAR DIRECT REGULAR DIRECT

ICICI Prudential Bluechip ICICI Prudential Nifty Mirae Asset Hybrid Equity Mirae Asset Large Cap
Fund Next 50 Index Fund Fund Fund
SIP VALUE (lakhs) SIP VALUE (lakhs) SIP VALUE (lakhs) SIP VALUE (lakhs)
` 7.51 ` 7.69 ` 7.10 ` 7.19 ` 4.03 ` 4.14 ` 7.88 ` 8.08

Worth of `10,000 monthly SIP over 5 years Worth of `10,000 monthly SIP over 5 years Worth of `10,000 monthly SIP over 3 years Worth of `10,000 monthly SIP over 5 years
PERFORMANCE (%) - REGULAR PERFORMANCE (%) - REGULAR PERFORMANCE (%) - REGULAR PERFORMANCE (%) - REGULAR
Fund Equity: Large Cap Fund Equity: Large Cap Fund Hybrid: Aggressive Hybrid Fund Equity: Large Cap
2019 2019 2019 2019
2018 2018 2018 2018
2017 2017 2017 2017
2016 2016 2016 2016
2015 2015 2015 2015
-10 0 10 20 30 40 -15 0 15 30 45 60 -8 0 8 16 24 32 -10 0 10 20 30 40
PERFORMANCE (%) - DIRECT PERFORMANCE (%) - DIRECT PERFORMANCE (%) - DIRECT PERFORMANCE (%) - DIRECT
Fund Equity: Large Cap Fund Equity: Large Cap Fund Hybrid: Aggressive Hybrid Fund Equity: Large Cap
2019 2019 2019 2019
2018 2018 2018 2018
2017 2017 2017 2017
2016 2016 2016 2016
2015 2015 2015 2015
0 8 16 24 32 40 -15 0 15 30 45 60 -8 0 8 16 24 32 0 8 16 24 32 40
The fund has always been a true-to- It’s an open-end index fund track- This fund typically invests 70–75 per Earlier known as Mirae Asset India
label blue-chip fund, even before the ing the Nifty Next 50. The index is a cent in equities and the rest in debt. Equity Fund, it has been reclassified
SEBI categorisation norms kicked in. basket of the 50 most active and In the equity portion, it hunts for and renamed as a large-cap fund
It seeks to invest in large-cap compa- liquid stocks on the NSE after the cash-generating compounding ideas from May 2019. Though the earlier
nies with a proven track record, quali- Nifty 50. It tends to be a high-beta available at reasonable valuations. mandate was that of a multi-cap
ty management and good growth bet on the large-cap space as The fund plays it safe with its debt fund, the fund was in effect managed
potential. While looking for quality stocks in it deliver significantly allocation. The non-equity portion is with a large-cap-heavy portfolio, with
businesses, the fund tends to be val- higher gains than the Nifty 50 presently invested mainly in sovereign a very limited allocation to mid- and
uation-conscious and doesn’t over- during bull phases but also suffer and call-money instruments, with small-cap stocks. The fund’s invest-
pay. The year-wise track record shows bigger downside in a market fall. marginal exposure to corporate ment philosophy is centred on partic-
that the fund has been good at The fund can display higher volatili- paper. The fund’s relatively short ipating in quality businesses but with
bull-market participation and also in ty than the market in risk-off record makes it hard to gauge its an eye on buying them at reasonable
containing losses during bear years phases. A high-risk–high-reward ability to weather hostile markets. But valuations. It has outpaced both the
such as 2011 or 2015. However, it option to own emerging blue chips. the consistent show from the AMC’s benchmark and the category over the
hasn’t seen a serious bear market. equity schemes infuses confidence. past one year and three years.
EXPENSE RATIO (%) EXPENSE RATIO (%) EXPENSE RATIO (%) EXPENSE RATIO (%)
0.01 1.78 2.79 0.009 1.21 2.22 0.01 0.85 2.79 0.009 0.39 2.22 1.29 2.01 2.68 0.24 0.24 1.80 0.01 1.75 2.79 0.009 0.63 2.22
FUND MANAGER/S FUND MANAGER/S FUND MANAGER/S FUND MANAGER/S

Rajat Chandak (2.2 yrs) Kayzad Eghlim (9.3 yrs) Neelesh Surana (4.2 yrs) Neelesh Surana (11.4 yrs)
Anish Tawakley (1.1 yrs) Mahendra Kumar Jajoo (3.1 yrs) Harshad Borawake (2.4 yrs)
Sudhir Kedia (2.5 yrs) Gaurav Misra (8 months)
QUARTILE PERFORMANCE QUARTILE PERFORMANCE QUARTILE PERFORMANCE QUARTILE PERFORMANCE

2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019

REGULAR DIRECT REGULAR DIRECT
NOT RATED NOT RATED
Nippon India ETF Junior Nippon India Large Cap SBI Bluechip Fund SBI ETF Nifty 50
BeES Fund
REGULAR REGULAR DIRECT REGULAR DIRECT REGULAR
` 7.20 ` 7.37 ` 7.58 ` 7.37 ` 7.57 ` 4.14

PERFORMANCE (%) PERFORMANCE (%) - REGULAR PERFORMANCE (%) - REGULAR PERFORMANCE (%)
Fund Equity: Large Cap Fund Equity: Large Cap Fund Equity: Large Cap Fund Equity: Large Cap
2019 2019 2019 2019
2018 2018 2018 2018
2017 2017 2017 2017
2016 2016 2016 2016
2015 2015 2015 2015
-15 0 15 30 45 60 -10 0 10 20 30 40 -8 0 8 16 24 32 0 7 14 21 28 35
PERFORMANCE (%) - DIRECT PERFORMANCE (%) - DIRECT

Fund Equity: Large Cap Fund Equity: Large Cap
2019 2019
2018 2018
2017 2017
2016 2016
2015 2015
0 8 16 24 32 40 -8 0 8 16 24 32
This ETF is a low-expense way for The fund follows a ‘growth at a rea- After a blip in performance relative to This is an ultra low-cost option to
buying Nifty Next 50 Index for sonable price’ approach. It hunts for the benchmark and the category in own the blue chips of Nifty 50. The
demat and trading account holders. companies which are leaders or 2018, this fund has pulled up its ETF has outpaced large-cap catego-
The index is a basket of the 50 potential leaders in their respective socks. This has helped it retain its ry on both one- and three-year peri-
most active and liquid stocks on segments. The fund used to be mid- four-star rating. A steady climber in ods, given the narrow rally in the
the NSE after the Nifty 50 and acts cap-heavy a few years ago but since the large-cap ranking, it has man- markets. One needs to see if this
as an incubator for the emerging 2014, it has maintained a 75–80 aged to beat its benchmark and cat- sustains. The high financial-services
Nifty stocks. While the Nifty Next 50 per cent allocation to large-cap egory in six of the last seven years. It weight does enhance concentration
is a good basket to own in bull stocks. Its annual returns suggest focuses on investing in businesses risks relative to owning actively man-
markets, it also suffers severe set- that it is an aggressive outperformer and managements that tend to con- aged large-cap funds. This ETF is
backs in bear markets. Investors of the market in big bull phases sistently outperform on profit growth available at a negligible expense
should be wary of significant pre- while lagging behind it in bear and have efficient capital-allocation ratio of 0.07 per cent. Investors
miums in market prices vis-a-vis phases like 2011. The fund has dis- policies. This is combined with a view should be wary of discounts or pre-
the latest NAV while buying this ETF. played good downside containment on growth drivers for the sector and miums in the market price vis-a-vis
in the last six years. positive changes in sector dynamics. NAV while transacting in ETFs.
0.01 0.23 3.09 0.01 1.86 2.79 0.009 1.06 2.22 0.01 1.89 2.79 0.009 1.07 2.22 0.01 0.07 3.09

Vishal Jain (11 months) Sailesh Raj Bhan (12.3 yrs) Sohini Andani (9.0 yrs) Raviprakash Sharma (4.2 yrs)

2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019


Growth funds
UTI Nifty Index Fund Aditya Birla Sun Life Axis Focused 25 Fund
Equity Fund
` 7.62 ` 7.64 ` 7.38 ` 7.60 ` 8.32 ` 8.62


Fund Equity: Large Cap Fund Equity: Multi Cap Fund Equity: Multi Cap
2019 2019 2019
2018 2018 2018
2017 2017 2017
2016 This list features our 2016 2016
2015 picks from multi-cap 2015 2015
-8 0 8 16 24 32 funds, large- and mid- -10 0 10 20 30 40 -15 0 15 30 45 60
PERFORMANCE (%) - DIRECT cap funds, value/ PERFORMANCE (%) - DIRECT PERFORMANCE (%) - DIRECT
Fund Equity: Large Cap contra funds as well Fund Equity: Multi Cap Fund Equity: Multi Cap
2019 as tax-saving funds 2019 2019
2018 (ELSS) that invest in a 2018 2018
2017
fair mix of large-, 2017 2017
2016 2016 2016
medium- and small-
2015 2015 2015
-8 0 8 16 24 32 sized companies. -10 0 10 20 30 40 -15 0 15 30 45 60
Funds in this list have
It’s a good, low-cost option to invest This fund has lagged behind the The fund invests in cherry-picked
in the Nifty 50 index for those who a high degree of benchmark in the last one year but stocks across the market-cap spec-
don’t own a demat account. On a freedom to invest in has beaten it and the category over trum and has been managed by a
trailing, three-year basis, the fund has five and seven years. It hunts for seasoned fund manager since 2016.
outperformed the large-cap category companies of businesses offering consistent It has earned a five-star rating by
by 1 percentage point. However, different sizes. This earnings growth and also well-run convincingly beating both its bench-
investors need to wait and watch to businesses with no immediate trig- mark and category over one, three
see if the narrow rally that has led to versatility makes gers but available at deep value. It and five years. The fund is managed
index funds outpacing active large- them suitable for invests 65 per cent or more in large in Axis’ trademark ‘quality at a rea-
cap funds is sustained in the long caps and 25 per cent in mid caps. sonable price’ style and selects
run. Also, the high financial-services most equity-fund The fund has been better at outper- stocks on the basis of the company’s
weight does lead to higher concen- investors. When you forming in bull markets than con- pricing power and durable competi-
tration risks for this fund compared taining losses in bear markets. tive advantage. The fund had an 80
to actively managed large-cap funds. invest for five years or per cent large-cap exposure, with the
above, you can expect residual assets mainly in mid caps.
gains that
REGULAR DIRECT comfortably beat the REGULAR DIRECT REGULAR DIRECT
0.01 0.17 2.79 0.009 0.10 2.22 inflation rate and are 0.75 1.96 2.78 0.31 1.15 2.57 0.75 2.03 2.78 0.31 0.74 2.57
also higher than fixed-
FUND MANAGER/S income options. But FUND MANAGER/S FUND MANAGER/S
Sharwan Kumar Goyal (1.2 yrs) be prepared for ups Anil Shah (7.0 yrs) Jinesh Gopani (3.3 yrs)
and downs in your
investment value
QUARTILE PERFORMANCE along the way. Make QUARTILE PERFORMANCE QUARTILE PERFORMANCE
sure you invest only
through the SIP route.
2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019


Axis Long Term Equity Canara Robeco Emerging DSP Tax Saver Fund Franklin India Focused
Fund Equities Fund Equity Fund
` 8.01 ` 8.25 ` 7.50 ` 7.75 ` 7.72 ` 7.93 ` 7.16 ` 7.39

Fund Equity: ELSS Fund Equity: Large & MidCap Fund Equity: ELSS Fund Equity: Multi Cap
2019 2019 2019 2019
2018 2018 2018 2018
2017 2017 2017 2017
2016 2016 2016 2016
2015 2015 2015 2015
-10 0 10 20 30 40 -15 0 15 30 45 60 -10 0 10 20 30 40 -10 0 10 20 30 40
Fund Equity: ELSS Fund Equity: Large & MidCap Fund Equity: ELSS Fund Equity: Multi Cap
2019 2019 2019 2019
2018 2018 2018 2018
2017 2017 2017 2017
2016 2016 2016 2016
2015 2015 2015 2015
-10 0 10 20 30 40 -15 0 15 30 45 60 -10 0 10 20 30 40 -10 0 10 20 30 40
This fund has outpaced its bench- Consistency has been the hallmark of The fund is among the select ones in After a blockbuster performance until
mark and category over one-, three-, this fund. Its investment strategy is a the category to have outperformed its 2015, the fund has suffered a slight
five- and seven-year periods with combination of top-down and bot- benchmark over the last one year. slowdown in the last couple of years.
wide margins and has been doing tom-up approaches. Macroeconomic Over three years, the fund’s returns But its ability to beat the benchmark
particularly well in the last six indicators are analysed and evaluat- have just kept up with benchmark over longer periods, its distinct man-
months. It leans towards large-cap ed to decide on sector weights. returns, while over five years, it has date and a senior fund manager at
stocks as compared to its peers, with Companies are evaluated through a managed 2–3 percentage-point out- helm since 2012 make it worth con-
a 65–75 per cent allocation to them. BMV framework (business strength, performance relative to the category sidering. The fund attempts to hold a
It is a strong adherent of the ‘quality management quality and valuations and benchmark. The fund follows a concentrated portfolio of companies
at a reasonable price’ strategy and vis-a-vis growth). A significant shift blend of the growth and value styles that are likely to deliver higher earn-
hunts for superior and scalable busi- from mid and small caps to being a and appears to take tactical calls. It ings growth than the market and is
nesses with strong pricing power, a large-cap- and mid-cap-heavy in has moved to a far more conservative valuation-conscious. It usually has a
high ROCE and secular growth. But it 2017 post SEBI rejig seems to have positioning in the last four years, with 65–70 per cent weight in large caps,
hasn’t yet lived through a severe bear helped the fund’s performance in a a large-cap allocation of around 20–25 per cent in mid caps and the
market like 2008. hostile market for mid caps. 70–75 per cent. rest in small caps.
1.76 1.76 2.65 0.22 0.93 2.12 1.88 2.07 2.85 0.59 0.69 2.38 1.76 1.88 2.65 0.22 0.92 2.12 0.75 1.85 2.78 0.31 1.06 2.57

Jinesh Gopani (8.5 yrs) Miyush Gandhi (1.5 yrs) Rohit Singhania (4.2 yrs) Roshi Jain (7.2 yrs)
Shridatta Bhandwaldar (since Oct ’19) Anand Radhakrishnan (3.4 yrs)

2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019


Invesco India Contra Invesco India Tax Plan Kotak Standard Multicap L&T India Value Fund
Fund Fund
` 7.60 ` 7.91 ` 7.49 ` 7.82 ` 7.79 ` 8.02 ` 7.01 ` 7.18

Fund Equity: Value Oriented Fund Equity: ELSS Fund Equity: Multi Cap Fund Equity: Value Oriented
2019 2019 2019 2019
2018 2018 2018 2018
2017 2017 2017 2017
2016 2016 2016 2016
2015 2015 2015 2015
-15 0 15 30 45 60 -10 0 10 20 30 40 -10 0 10 20 30 40 -15 0 15 30 45 60
Fund Equity: Value Oriented Fund Equity: ELSS Fund Equity: Multi Cap Fund Equity: Value Oriented
2019 2019 2019 2019
2018 2018 2018 2018
2017 2017 2017 2017
2016 2016 2016 2016
2015 2015 2015 2015
-15 0 15 30 45 60 -10 0 10 20 30 40 -10 0 10 20 30 40 -15 0 15 30 45 60
This fund has sharply improved its This fund is managed with a ‘growth A consistent performer in the multi- A value-oriented fund that has out-
rating from three to five stars in the at reasonable price’ strategy and a cap category, the fund has beaten performed in bull phases, it identifies
last two years due to its ability to flexi-cap mandate. Large-cap weights its benchmark and peers in seven opportunities in sectors and compa-
outperform its category by a good in the fund were moderated to of the nine years since launch. The nies in special situations such as
margin in the last three and five 65–70 per cent by October 2018 on fund believes that different sectors cyclically low earnings, turnarounds
years. The fund invests across the the view that overheated valuations of the economy perform varyingly and revival plays. From almost having
market-capitalisation range with a in the mid-cap space had corrected. over different cycles and attempts an equal-weighted portfolio across
contrarian bias. It prefers companies But the early move to mid caps has to take focused bets on sectors market cap at inception, it has
in a turnaround phase, those trading cost the fund. On a trailing one-year that are likely to outperform. It has moved to a large-cap-heavy portfolio,
below their intrinsic value and growth basis, the fund’s returns have been a large-cap-tilted portfolio, with a perhaps on account of relative valua-
companies that are going through a about 1 percentage point behind the 75–80 per cent allocation to blue- tions turning more attractive. Given
temporary bad patch. However, it benchmark and peer returns. But the chip stocks. The remaining portion its value orientation, its performance
does not compromise on ROE or five-year annualised returns are 1 is mainly invested in mid caps. The may suffer in the short term. Still, it
cash-flow conversion of companies in percentage point more than the fund’s performance is yet to be has been an outperformer over three,
its hunt for contrarian picks. benchmark and category returns. tested in a big market crash. five and seven years.
1.78 1.90 2.93 0.41 0.86 1.82 1.76 2.35 2.65 0.22 1.36 2.12 0.75 1.75 2.78 0.31 0.87 2.57 1.78 1.88 2.93 0.41 0.91 1.82

Amit Ganatra (7.1 yrs) Amit Ganatra (1.5 yrs) Harsha Upadhyaya (7.2 yrs) Venugopal Manghat (6.9 yrs)
Taher Badshah (2.7 yrs) Dhimant Kothari (1.5 yrs)

2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019


Mirae Asset Emerging Mirae Asset Tax Saver Motilal Oswal Multicap Parag Parikh Long Term
Bluechip Fund Fund 35 Fund Equity Fund
` 8.34 ` 8.54 ` 4.14 ` 4.24 ` 7.61 ` 7.81 ` 7.79 ` 7.93

Fund Equity: Large & MidCap Fund Equity: ELSS Fund Equity: Multi Cap Fund Equity: Multi Cap
2019 2019 2019 2019
2018 2018 2018 2018
2017 2017 2017 2017
2016 2016 2016 2016
2015 2015 2015 2015
-15 0 15 30 45 60 -15 0 15 30 45 60 -15 0 15 30 45 60 -10 0 10 20 30 40
Fund Equity: Large & MidCap Fund Equity: ELSS Fund Equity: Multi Cap Fund Equity: Multi Cap
2019 2019 2019 2019
2018 2018 2018 2018
2017 2017 2017 2017
2016 2016 2016 2016
2015 2015 2015 2015
-15 0 15 30 45 60 -15 0 15 30 45 60 -15 0 15 30 45 60 -10 0 10 20 30 40
This fund has consistently outper- This fund made a debut in the ratings This five-year-old fund has recently A differentiated fund in the multi-cap
formed its benchmark and peers with five stars in end 2018 and has entered the rankings with a five-star space, it has the flexibility to take
since launch. It has moved from a held onto the ranking since then. It rating. It follows the QGLP (quality, cash calls and invest in international
mid-cap-heavy portfolio since incep- hunts for companies with strong cash growth, longevity and price) frame- stocks for up to one-third of its
tion to having almost equal allocation flows, competitive advantages and work and is sector and market-cap assets. Though its year-to-year perfor-
to large and mid caps since SEBI’s growth prospects. It, however, does agnostic. Its track record is relatively mance has been patchy relative to its
recategorisation last year. The invest- not hesitate to sell out of stocks that short to draw conclusions about per- category, it has outperformed both
ment framework of the scheme aims appear overvalued and buy into cycli- formance. The fund beat both its the benchmark and peers over three
at participating in high-quality busi- cals if they seem attractively priced. benchmark and category by comfort- and five years. While the India leg of
nesses up to a reasonable price and Starting out with a 65–70 per cent able margins in the three years after the portfolio used to be mid-cap-
holding them over an extended peri- allocation to large-cap stocks in inception, but performance hasn’t heavy, currently it has more of large-
od of time. The consistent outperfor- 2016, the fund has pegged up port- been inspiring since 2018. The fund cap stocks. The overseas leg features
mance can be attributed to having a folio weights in large caps in the last manager has changed in May 2019. global giants such as Alphabet,
stable fund manager and a consis- few months, with the allocation But the AMC’s investment philosophy Facebook, Suzuki and Amazon, mak-
tent investment style since inception. recently topping 70 per cent. is guided mainly by its founders. ing up 25 per cent of its portfolio.
1.88 1.88 2.85 0.59 0.79 2.38 1.76 2.02 2.65 0.22 0.22 2.12 0.75 1.75 2.78 0.31 0.96 2.57 0.75 2.08 2.78 0.31 1.33 2.57

Neelesh Surana (9.4 yrs) Neelesh Surana (3.9 yrs) Akash Singhania (5 months) Rajeev Thakkar (6.4 yrs)
Ankit Jain (8 months) Raunak Onkar (6.4 yrs)
Raj Mehta (3.7 yrs)

2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019


Principal Emerging SBI Focused Equity Fund Tata Equity PE Fund Tata India Tax Savings
Bluechip Fund Fund
` 7.38 ` 7.61 ` 8.06 ` 8.28 ` 7.44 ` 7.67 ` 7.71 ` 7.99

Fund Equity: Large & MidCap Fund Equity: Multi Cap Fund Equity: Value Oriented Fund Equity: ELSS
2019 2019 2019 2019
2018 2018 2018 2018
2017 2017 2017 2017
2016 2016 2016 2016
2015 2015 2015 2015
-15 0 15 30 45 60 -15 0 15 30 45 60 -10 0 10 20 30 40 -15 0 15 30 45 60
Fund Equity: Large & MidCap Fund Equity: Multi Cap Fund Equity: Value Oriented Fund Equity: ELSS
2019 2019 2019 2019
2018 2018 2018 2018
2017 2017 2017 2017
2016 2016 2016 2016
2015 2015 2015 2015
-15 0 15 30 45 60 -15 0 15 30 45 60 -15 0 15 30 45 60 -15 0 15 30 45 60
This four-star rated fund has beaten With a veteran fund manager since A good long-term performer, this With a record of nearly two
its benchmark in eight of the 10 2009, this fund has been a consis- fund has consistently held on to its decades, this fund has managed
years since launch. It hunts for com- tent out-performer compared to its four-star rating. It invests in value convincing outperformance of its
panies with sustainable improvement benchmark and peers in seven of the stocks that have a rolling 12-month category over one, three and five
in growth prospects, good manage- last 10 years. Being market-cap P/E ratio lower than the rolling years. The fund’s strategy relies on
ment track records, trading at attrac- agnostic, its portfolio has been flexi- twelve-month P/E ratio of the buying businesses with compound-
tive valuations and specifically under- ble and has shifted from being mid- Sensex. It buys good stocks at ing characteristics, strong growth
owned by institutions. The fund has cap- and small-cap-heavy to large- cheap valuations and not ‘cheap’ potential, high capital efficiency
40–45 per cent each in large and cap- and mid-cap-heavy over this stocks per se. The value theme and it also looks for undervalued
mid caps, with remainder in small period. It has 50–60 per cent large- results in the fund often owning businesses in special situations.
caps. It has outperformed in bull cap and 20–30 per cent mid-cap positions in out-of-favour stocks, Large-cap allocations were at
phases and underperformed in bear allocation, with the remainder in which makes it difficult for it to 45–55 per cent until mid-2017 but
markets compared to its benchmark small caps. As per its mandate, it match the benchmark or peers over have shot up to 80 per cent in
and peers. Over five and seven years, carries less than 30 stocks in its shorter time frames. But it makes 2019, shielding it from the recent
it has clearly been an outperformer. portfolio, which enhances the risk. up through good long-term returns. turmoil in mid and small caps.
1.88 2.09 2.85 0.59 0.97 2.38 0.75 2.09 2.78 0.31 1.06 2.57 1.78 1.90 2.93 0.41 0.41 1.82 1.76 2.12 2.65 0.22 0.66 2.12

Dhimant Shah (8.3 yrs) R. Srinivasan (10.4 yrs) Sonam Udasi (3.5 yrs) Rupesh Patel (4.5 yrs)
Amey Sathe (1.3 yrs) Ennettee Fernandes (1.3 yrs)

2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019

NOT RATED NOT RATED NOT RATED NOT RATED NOT RATED NOT RATED
International
funds Franklin India Feeder
Franklin US Opp Fund
ICICI Prudential Global
Stable Equity Fund
Motilal Oswal Nasdaq
100 FOF
` 8.28 ` 8.48 ` 7.18 ` 7.32 ` 0.95 ` 0.96

Worth of `10,000 monthly SIP over 5 years Worth of `10,000 monthly SIP over 5 years Worth of `10,000 monthly SIP over 9 Months

Fund Equity: International Fund Equity: International Fund Equity: International
2019 2019 2019
2018 2018 2018
2017 2017 2017
This list includes our 2016 2016 2016
chosen international 2015 2015 2015
equity funds, which -7 0 7 14 21 28 -12 -6 0 6 12 18 -7 0 7 14 21 28
can supplement the PERFORMANCE (%) - DIRECT PERFORMANCE (%) - DIRECT PERFORMANCE (%) - DIRECT
core equity Fund Equity: International Fund Equity: International Fund Equity: International
investments of 2019 2019 2019
investors looking to 2018 2018 2018
diversify 2017 2017 2017

2016 2016 2016
internationally.
2015 2015 2015
-7 0 7 14 21 28 -12 -6 0 6 12 18 -7 0 7 14 21 28
This fund of funds based in India This is a fund of funds that seeks This fund of funds redirects your
channels money into the Franklin to provide Indian investors a global money into the Nasdaq 100 ETF
US Opportunities Fund, a flexi-cap diversification opportunity by managed by Motilal Oswal AMC. It
equity fund investing in the US investing in funds overseas. The is a passive fund tracking the
market and benchmarked to the investor money is channelled into Nasdaq 100 index in the US mar-
broad market Russell 3000. It is a Nordea 1 Global Stable Equity ket. The Nasdaq 100 is the US
growth-style fund with an expense Fund. The fund uses a blend of the benchmark for the top 100 non-fi-
ratio of 1.58 per cent. The underly- growth and value styles of investing nancial stocks listed in the US mar-
ing fund’s assets are invested in US while allocating mainly to large-cap ket. Unlike the case with the ETF,
markets, with technology stocks stocks. The fund had about 57 per buying this fund doesn’t require
making up about 38 per cent of cent of its assets invested in US you to own a demat account or
the portfolio, healthcare about 15 stocks, 11 per cent in Japan and invest through the stock exchanges,
per cent and industrials 12 per about 8 per cent in Canada as of where ETF prices could vary signifi-
cent as of end September 2019. end September 2019. cantly from the NAV. You can trans-
act with the AMC at the fund’s NAV.

0.50 1.58 2.70 0.10 0.71 2.22 0.50 1.48 2.70 0.10 1.16 2.22 0.50 0.50 2.70 0.10 0.10 2.22
FUND MANAGER/S FUND MANAGER/S FUND MANAGER/S

Pyari Menon (since Sep ’19) Rohan Maru (6.0 yrs) Abhiroop Mukherjee (11 months)
Priyanka Khandelwal (2.3 yrs) Swapnil P Mayekar (2 months)

2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019

Aggressive
growth Aditya Birla Sun Life Tax

Relief 96
Axis Midcap Fund Franklin India Prima Fund
funds SIP VALUE (lakhs) SIP VALUE (lakhs) SIP VALUE (lakhs)
` 7.24 ` 7.45 ` 7.93 ` 8.19 ` 7.07 ` 7.28


Fund Equity: ELSS Fund Equity: Mid Cap Fund Equity: Mid Cap
2019 2019 2019
2018 2018 2018
2017 2017 2017
2016 2016 2016
This list features our
2015 2015 2015
chosen mid-cap and -12 0 12 24 36 48 -15 0 15 30 45 60 -15 0 15 30 45 60
small-cap equity
funds as well as tax- PERFORMANCE (%) - DIRECT PERFORMANCE (%) - DIRECT PERFORMANCE (%) - DIRECT
Fund Equity: ELSS Fund Equity: Mid Cap Fund Equity: Mid Cap
saving funds (ELSS)
2019 2019 2019
that have a history of 2018 2018 2018
investing 2017 2017 2017
predominantly in 2016 2016 2016
stocks of medium- 2015 2015 2015
-12 0 12 24 36 48 -15 0 15 30 45 60 -15 0 15 30 45 60
and small-sized
companies. The fund has beaten its benchmark The fund has risen from two to five A category veteran, this fund is cur-
and category over a five- and sev- stars in the last two years as it man- rently rated four-star. It is managed in
Compared to those en-year period. But its aggressive aged the falling markets of 2018 very a ‘growth at a reasonable price’ style.
that invest in larger positioning has weighed on its one- well. It follows the Axis credo of own- Some of the attributes it seeks in
year performance. The fund is quite ing companies with secular growth businesses are attractive returns on
companies, these mid-cap heavy relative to its peers prospects, durable competitive capital, free cash flows, moderate
funds can potentially and has retained a 45–50 per cent advantages and good managements. capital intensity as well as durable
weight in mid caps through the The portfolio always has 65–70 per- and large growth opportunities. The
offer higher returns past year. It follows a bottom-up cent allocation to mid caps, with fund stays off momentum plays and
in the long term but strategy and uses a 360-degree residual allocations, which used to be theme-based stocks in bull markets.
with more severe ups view of a company to invest. The
portfolio reveals quite a few uncon-
in small caps, shifted to large caps in
the last couple of years. The fund got
It has a 75–80 per cent mid-cap
exposure and a 15–20 per cent
and downs along the ventional mid-cap picks as top a new manager over two years ago large-cap exposure. The large-cap
way. Consider holdings, with a number of MNC and has shown a consistent improve- allocation provides stability to the
stocks with strong moats. ment in performance since then. fund during times of turbulence.
investing in these if
you can withstand EXPENSE RATIO (%) EXPENSE RATIO (%) EXPENSE RATIO (%)
high volatility in your
1.76 2.07 2.65 0.22 1.08 2.12 1.85 2.17 2.80 0.57 0.84 2.11 1.85 1.88 2.80 0.57 1.09 2.11
investment and if you
have an investment
horizon of seven
Ajay Garg (13.0 yrs) Shreyash Devalkar (2.9 yrs) R Janakiraman (11.6 yrs)
years or more. Make Hari Shyamsunder (3.4 yrs)
sure you invest only
through the SIP QUARTILE PERFORMANCE QUARTILE PERFORMANCE QUARTILE PERFORMANCE
route. REGULAR DIRECT REGULAR DIRECT REGULAR DIRECT
2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019


Franklin India Smaller HDFC Small Cap Fund Kotak Emerging Equity L&T Emerging Businesses
Companies Fund Scheme Fund
` 6.41 ` 6.63 ` 7.20 ` 7.47 ` 7.28 ` 7.55 ` 7.14 ` 7.33

Fund Equity: Small Cap Fund Equity: Small Cap Fund Equity: Mid Cap Fund Equity: Small Cap
2019 2019 2019 2019
2018 2018 2018 2018
2017 2017 2017 2017
2016 2016 2016 2016
2015 2015 2015 2015
-40 -20 0 20 40 60 -20 0 20 40 60 80 -15 0 15 30 45 60 -20 0 20 40 60 80
Fund Equity: Small Cap Fund Equity: Small Cap Fund Equity: Mid Cap Fund Equity: Small Cap
2019 2019 2019 2019
2018 2018 2018 2018
2017 2017 2017 2017
2016 2016 2016 2016
2015 2015 2015 2015
-40 -20 0 20 40 60 -20 0 20 40 60 80 -15 0 15 30 45 60 -20 0 20 40 60 80
One of the few funds with a more This fund has really come into its The fund has outperformed its cate- The fund has attained an average
than 10-year track record in the own in the last four years, with a sig- gory over three and five years to four-star rating for most of 2019 by
small-cap space, it has outperformed nificant outperformance over its earn a five-star rating. It follows a convincingly beating its category over
over multiple market cycles. Its benchmark and peers, which has ‘growth at a reasonable price’ strate- one and three years. It looks for qual-
approach is wholly bottom-up. It helped it climb from a three- to four- gy and has a low-churn approach to ity companies with durable competi-
looks for quality compounders – star rating in the last two years. The mid-cap investing. The mid-cap tive advantages in sectors with size-
companies which can compound fund follows a blended strategy of exposure is at 78 per cent, with able growth opportunities, while
their earnings at high rates with good investing in businesses that are run large- and small-cap exposure at 7 ensuring that it doesn’t overpay for
returns on capital, low capital intensi- by competent managements. It has and 14 per cent, respectively. After growth. The focus is on unearthing
ty and capable management. It has been good at navigating negative kicking off in 2007, the fund trailed under-researched small caps ahead
been a strong outperformer in under- phases while being a cautious partic- its benchmark in 2008 and 2009 of the market and therefore it fea-
valued markets, with moderation ipant during momentum-driven but has managed to consistently tures unconventional picks in its port-
during big bull phases. For 2019, the phases in small caps. The ballooning outperform it since 2010 with a sta- folio. The fund invests 65 per cent of
fund has managed to restrict its loss- fund size is a cause for concern, ble fund manager. It has been good its portfolio in small caps, with much
es compared to its peers. given the liquidity constraints. at capitalising on big bull phases. of the residual portion in mid caps.
1.88 1.88 2.70 0.69 1.04 2.38 1.88 2.10 2.70 0.69 0.90 2.38 1.85 2.04 2.80 0.57 0.82 2.11 1.88 2.02 2.70 0.69 0.90 2.38

R Janakiraman (11.6 yrs) Chirag Setalvad (5.3 yrs) Pankaj Tibrewal (9.4 yrs) Soumendra Nath Lahiri (5.4 yrs)
Hari Shyamsunder (3.4 yrs)

2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019


L&T Midcap Fund L&T Tax Advantage SBI Small Cap Fund

` 7.12 ` 7.31 ` 7.06 ` 7.19 ` 8.01 ` 8.29


Fund Equity: Mid Cap Fund Equity: ELSS Fund Equity: Small Cap
2019 2019 2019
2018 2018 2018
2017 2017 2017
2016 2016 2016
2015 2015 2015
-15 0 15 30 45 60 -12 0 12 24 36 48 -20 0 20 40 60 80
PERFORMANCE (%) - DIRECT PERFORMANCE (%) - DIRECT PERFORMANCE (%) - DIRECT

Fund Equity: Mid Cap Fund Equity: ELSS Fund Equity: Small Cap
2019 2019 2019
2018 2018 2018
2017 2017 2017
2016 2016 2016
2015 2015 2015
-15 0 15 30 45 60 -12 0 12 24 36 48 -25 0 25 50 75 100
With a convincing outperformance of A fund with an uninterrupted track Managed by a veteran fund manag-
the benchmark and category over record of beating the benchmark in er since 2013, this fund has beat-
three and five years, it now enjoys a the five years to 2018, it has wit- en its category over one-, three-
five-star rating and has had a stable nessed a slowdown in returns in the and five-year periods to earn its
fund manager since 2013. The fund last year. It looks for high-conviction five-star rating. The fund evaluates
is valuation-conscious but rather than opportunities across the market-cap every company on relative ratings
hunt for deeply discounted cigar-butt spectrum and relies on L&T Mutual on five attributes: competitive
stocks, it invests 70 per cent of its Fund’s G.E.M model, involving idea advantage, return on capital,
portfolio in businesses with durable generation, evaluation, and manu- growth, management and valuation.
competitive advantages (moats) and facturing and monitoring of the port- It uses a blend of growth and value
scalable cash flows, provided they folio. Unlike many of its peers, this metrics. In practice, it has held
are available at reasonable valua- fund has continued to maintain a 65–70 per cent of its portfolio in
tions. The fund has raised its mid-cap significant weight in mid-cap stocks small caps, with the rest in mid
allocation to 75–80 percent, with a in the last couple of years, which caps and hardly any large-cap allo-
14–15 per cent small-cap exposure. can pay off with a market revival. cation in the last one year.

1.85 2.00 2.80 0.57 0.83 2.11 1.76 2.04 2.65 0.22 1.54 2.12 1.88 2.31 2.70 0.69 1.07 2.38

Soumendra Nath Lahiri (6.3 yrs) Soumendra Nath Lahiri (6.9 yrs) R. Srinivasan (5.9 yrs)
Vihang Naik (3.3 yrs)

2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019

Conservative
growth & HDFC Equity Savings

Fund
ICICI Prudential Equity
Savings Fund
IDFC Regular Savings
income funds RETURN (%) RETURN (%) RETURN (%)

7.00
3-year annualised return
8.49 7.00
7.81 5.99
6.92
Fund Hybrid: Equity Savings Fund Hybrid: Equity Savings Fund Hybrid: Conservative Hybrid
2019 2019 2019
2018 2018 2018
2017 2017 2017
choice of 2015 2015 2015
conservative hybrid 0 4 8 12 16 20 0 3 6 9 12 15 0 3 6 9 12 15
funds and equity PERFORMANCE (%) - DIRECT PERFORMANCE (%) - DIRECT PERFORMANCE (%) - DIRECT
savings funds. With a Fund Hybrid: Equity Savings Fund Hybrid: Equity Savings Fund Hybrid: Conservative Hybrid
net equity allocation 2019 2019 2019
of 25–30 per cent 2018 2018 2018
and the remainder in 2017 2017 2017

2016 2016 2016
debt, these funds
2015 2015 2015
offer a viable 0 4 8 12 16 20 0 4 8 12 16 20 0 3 6 9 12 15
alternative to regular
The fund juggles equity, debt and This five-star fund allocates actively The fund invests 20–25 per cent of
income seekers. To arbitrage positions to maintain a 65 between equity, debt and arbitrage its portfolio in equity and the rest
derive dependable, per cent allocation to equity instru- positions to deliver a 65–35 mix in in debt instruments. In the equity
ments and 35 per cent to debt. The favour of equity. The fund receives portion, the fund has maintained a
inflation-protected arbitrage positions in the portfolio, equity tax treatment. The equity por- large-cap exposure of 80–85 per
income, consider though treated as equity for tax pur- tion of the portfolio leans heavily cent since mid-2018, prior to which
poses, generate returns that align towards safer large-cap stocks, which it mostly hovered in the range of
investing in these with short-term borrowing rates in the usually get around 80 per cent allo- 50–60 per cent. For the debt por-
funds by spreading market. The equity portion is conser- cation. On the debt side, the fund tion, the fund mostly holds AAA
vatively managed with around 80 per does take duration calls to some rated bonds followed by cash
your investment over cent large-cap exposure. The average extent. In 2015–16, the average equivalents and sovereign bonds.
at least a few months maturity of the corporate bonds in maturity spiked to five-six years but Its exposure to AA and below rated
the debt portion has consistently went below one year in 2018. In the papers is negligible. The fund has
and then maintaining remained in the range of 0.5 to two latest portfolio, the average maturity returned 8.58 per cent per annum
a withdrawal rate in years, minimising duration risks. is at a conservative 1.9 years. (as on Oct 10, 2019) since launch.
the range of 4–6 per
cent of the value of REGULAR DIRECT REGULAR DIRECT REGULAR DIRECT
your investment 1.25 1.93 2.49 0.28 1.18 1.70 1.25 1.34 2.49 0.28 0.74 1.70 0.58 2.15 2.39 0.06 1.31 1.81
every year.
Anil Bamboli (15.1 yrs) Sankaran Naren (4.9 yrs), Manish Banthia Anurag Mittal (3.9 yrs)
Vinay R Kulkarni (12.9 yrs) (4.9 yrs), Kayzad Eghlim (2.5 yrs), Prakash Sumit Agrawal (2.9 yrs)
Krishan Kumar Daga (3.7 yrs) Gaurav Goel (2.0 yrs) Dharmesh Kakkad
(1.0 yrs)

2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019

Short-term,
low risk HDFC Short Term Debt

Fund
IDFC Bond Fund Short
Term Plan
funds RETURN (%) RETURN (%)
7.60
7.77 7.26
7.80
PERFORMANCE (%) - REGULAR PERFORMANCE (%) - REGULAR
Fund Debt: Short Duration Fund Debt: Short Duration
2019 2019
2018 2018
2017 2017
2016 2016
This list features our
2015 2015
selection of short- 0 2 4 6 8 10 0 2 4 6 8 10
duration Funds.
PERFORMANCE (%) - DIRECT PERFORMANCE (%) - DIRECT
These funds are
Fund Debt: Short Duration Fund Debt: Short Duration
suitable to invest
2019 2019
your money for one 2018 2018
year to three years. 2017 2017
The risk of incurring 2016 2016
a loss in these funds 2015 2015

0 2 4 6 8 10 0 2 4 6 8 10
over the said time
frame is low and you This fund sticks to a play-it-safe One of the oldest funds in the cate-
strategy both with duration and gory, it is currently the second larg-
can expect to earn credit. It has maintained a strict est fund in terms of asset size. This
slightly higher returns maturity range, with the portfolio fund is conservative on credit risks,
maturity staying in a band of 1.4– with its portfolio exclusively made
than what a bank 1.8 years. Of late, the fund has up of AAA/A1+ rated corporate
fixed deposit of a increased the maturity to about 2.5 instruments and some cash equiva-
years. The portfolio is heavily lents. Its average maturity has hov-
similar duration can inclined towards AAA rated corpo- ered at around two years recently.
fetch. rate bonds, with these taking up The expense ratio is at 0.79 per
80–85 per cent of the assets in cent. In the recent string of credit
recent times and only a small AA events roiling debt funds, this fund
exposure. This high-quality portfolio house has managed to stand tall
comes at a reasonable 0.4 per among drowning peers.
cent expense ratio.
EXPENSE RATIO (%) EXPENSE RATIO (%)

0.40 0.40 1.49 0.09 0.25 0.97 0.40 0.79 1.49 0.09 0.28 0.97
FUND MANAGER/S FUND MANAGER/S

Anil Bamboli (9.3 yrs) Suyash Choudhary (8.6 yrs)
QUARTILE PERFORMANCE QUARTILE PERFORMANCE

2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019

Capital
preservation Axis Liquid Fund HDFC Liquid Fund IDFC Cash Fund
funds RETURN (%) RETURN (%) RETURN (%)

7.21
1-year return
7.26 7.10
1-year return
7.21 6.92
1-year return
6.98
Fund Debt: Liquid Fund Debt: Liquid Fund Debt: Liquid
2019 2019 2019
2018 2018 2018
2017 2017 2017
2016 2016 2016
picks in liquid-fund 0 2 4 6 8 10 0 2 4 6 8 10 0 2 4 6 8 10
category. They are PERFORMANCE (%) - DIRECT PERFORMANCE (%) - DIRECT PERFORMANCE (%) - DIRECT
suitable to park the Fund Debt: Liquid Fund Debt: Liquid Fund Debt: Liquid
amount that you 2019 2019 2019
have set aside to 2018 2018 2018
meet any emergency 2017 2017 2017
2016 2016 2016
needs or any surplus
2015 2015 2015
money that you don’t 0 2 4 6 8 10 0 2 4 6 8 10 0 2 4 6 8 10
need for the next few
The fund has outperformed its cat- The largest fund in this category, it Designed with a low-risk–high-li-
months to a year. The egory on one-, three- and five-year aims at generating regular income quidity strategy, this fund relies on
risk of incurring a returns. The current portfolio is over the short term through a a high-quality portfolio to deliver
invested to the extent of 70–80 per high-quality portfolio. About 70 per predictable returns to the investor.
loss in these funds is cent in top-quality commercial cent of its portfolio is in corporate About 75–80 per cent of its portfo-
negligible and you paper, with the rest deployed in paper with high investment- grade lio is typically parked in AAA/A1
can expect to earn sovereign bonds. The average matu-
rity is usually maintained at one
ratings and the rest in sovereign
paper. The average maturity is usu-
plus corporate instruments, about
6 per cent in sovereign paper and
better returns than month to two months. The expense ally at one month to two months. the rest in cash equivalents. The
what a bank deposit ratio is at a reasonable 0.16 per The predictable returns, owing to its average maturity is usually one
cent. A conservative option for the high-quality portfolio come at a month to two months. As a fund
of less than one-year seekers of a short-term option for slightly higher expense ratio of 0.3 house, IDFC Mutual Fund has large-
duration can fetch. their money. per cent. ly managed to steer clear of the
credit events that have shaken up
debt funds this past year.

0.11 0.16 0.97 0.07 0.11 0.62 0.11 0.30 0.97 0.07 0.20 0.62 0.11 0.15 0.97 0.07 0.10 0.62

Devang Shah (6.9 yrs) Anupam Joshi (3.9 yrs) Harshal Joshi (4.0 yrs)
Aditya Pagaria (3.1 yrs) Anurag Mittal (3.9 yrs)

2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019

Kotak Tax Saver
An open-ended equity linked saving scheme that helps
you save tax and create wealth over a long term.
Two Reasons to Rejoice
Growth Potential
&
Tax Savings of up to
*
* The tax saving assumes that the investor is in the highest tax bracket and is utilising the complete tax deduction limit of ₹1,50,000 per Financial Year.
This is only to illustrate the tax saving potential of ELSS and is not a tax advise. Please consult your tax consultant for tax purpose.
Riskometer
KOTAK TAX SAVER
$QRSHQHQGHGHTXLW\OLQNHGVDYLQJVFKHPHZLWKDVWDWXDWRU\ORFNLQRI\HDUVDQGWD[EHQHͤWV
It is suitable for investors who are seeking*:

• Long term capital growth with a 3 year lock-in.
• Investment in portfolio of predominantly equity & equity related securities.
*Investors should consult their financial advisor if in doubt about whether the product is suitable for them.
Past performance of the Sponsor/AMC/Fund does not indicate the schemes future performance. Risk Factors on page 51.
Mutual fund investments are subject to market risks, read all scheme related documents carefully.
SMALL CAN STILL
BE POWERFUL
Franklin India Smaller Companies Fund is a
diversified equity fund that invests
predominantly in small cap companies.
The fund focuses on identifying high
growth companies that are likely to
transform into tomorrow’s market leaders
resulting in capital appreciation over time.
Over 3,75,000 unique investors^ in this fund,

call your Mutual Fund Distributor or visit
www.franklintempletonindia.com
PRODUCT LABEL
"MUFSOBUJWFUP Suitable for: This fund is suitable for investors
who are seeking*:
t-POHUFSNDBQJUBMBQQSFDJBUJPO
t"GVOEUIBUJOWFTUTQSJNBSJMZJO
small cap companies
Investments Retirement Education Long Term
In Predominantly Corpus Corpus Wealth Creation
Small-Cap Companies *Investors should consult their financial
distributors if in doubt about whether
the product is suitable for them.
Follow us at : âs on Sep 30, 2019

TH
Most Rewarding
SIP Funds
Preface Contents
04 SIPs: The
antidote to
market
volatility
06 Best for
beginners
The popular choice 07 The classic
AMFI’s SIP numbers reveal that SIP assets are equity funds
growing at a fast pace
T For the
he monthly data released extremely depressing, especially so 08
recently by AMFI is pretty if someone was a new investor.
insightful, for it reveals a While SIPs don’t ensure that you
risk-taker
trend that’s sweeping the won’t make a loss, they can help
fund-management industry: SIPs. you average your investment cost
In September 2019, the SIP inflows and hence reduce the probability 09 Save tax,
stood at `8,263 crore. In September of a loss. build wealth
2018, they were `7,727 crore. In spite of the fact that SIPs are
Further, in 2017, for the same essential for equity investing, time
and again there is negative portray-
month, they stood at `5,516 crore. 10 Old is gold
Finally, in August 2016, they were al of SIPs in media. Often, the mes-
`3,698 crore. This year-on-year sage propagated is that SIP returns
growth is not just fantastic but it have lagged behind lump-sum
also underlines the rising maturity returns. Of course, data will
levels of Indian investors, who change as you alter the time peri-
want to invest through SIPs rather ods and the assumptions involved,
than take the lump-sum route. yet intelligent investors know that
It’s a widely known fact now the efficacy of SIPs is not limited
that SIPs are the right way to just to returns. They are actually a
approach equity. Given the inher- psychological tool as well that
ent volatility in this asset class, helps you remain disciplined
lump-sum investments can really amidst market frenzy.
be painful if they are mistimed. This supplement of Mutual
Just imagine how it would have Fund Insight lists the most reward-
felt if you had invested at the peak ing SIP funds across categories so
of the markets in 2007. The ensu- that you can start hunting for the
ing crash of 2008 would have been equity fund most suitable for you.
Most Rewarding SIP Funds 3

SIPs: The antidote to
market volatility
Market’s ups and downs intimidate investors.
SIPs help you average them out over a period of time.
E
volution happens in stages. From the dominance will fetch you more units. This averages your overall
of closed-end plans to the popularity of open- investment cost.
end ones; from the availability of only regular Markets are unpredictable. Nobody can tell with
plans to the emergence of direct plans; from an era of certainty when they will rise or fall. If you wait for the
high commissions to low commissions; from the domi- right time to invest in the market, it may never arrive.
nance of active funds to the emergence of passive A rally may go on for years and a slump can continue
ones; the mutual fund space in India has evolved over for months. SIPs help you naturally get rid of the
the years. The idea of SIPs has also taken off. Many dilemma of figuring out when to invest. They also help
investors today understand that SIPs are a better way you overcome your inherent biases that are counter-
to invest in equities as compared to lump sums. productive to your investment outcome. For instance,
SIPs aren’t magical; they are just a systematic way to many investors stop their SIPs when the markets begin
invest. By investing periodically, ideally monthly, you to fall, fearing that they will lose money. Also, many
become disciplined about investing. More than disci- investors start their SIPs in a rallying market because
pline, SIPs help equity investors navigate market vola- they don’t want to miss the bull run.
tility. Volatility is an inherent part of the market. It
can’t be done away with. Hence, the need is for a Keep it simple
mechanism that can counter it. That mechanism is For SIPs to work in your favour, you must keep them
SIPs. When you invest periodically over the long term, simple. Today there are many variants of SIPs avail-
you get to invest both at market highs and lows. When able. For instance, one type of SIP lets you keep your
you invest at a market high, your SIP will fetch you SIP amount variable. While it’s a convenient option to
less units. When you invest at a market low, your SIP have, it could compromise your discipline. This option
4 Most Rewarding SIP Funds

:07JVU[YPI\[PVUZ-@]Z-@
FY20
FY19 :07JVU[YPI\[PVUZ
-@¶-@
8,238 8,183 8,122 8,324 8,231 8,263
7,554 7,554 7,658 7,727 92,693
7,304
6,690
67,190
43,921
April May Jun July August September FY17 FY18 FY19

All numbers in ` cr Source: AMFI
opens a window for the investor to direct money to Since India is a developing high-growth economy, it’s
some frivolous expenditure at the cost of accumulating natural for the stock market to show extended rallies
money for the long term. and shorter periods of slump.
Yet another variant of SIP allows you to invest more SIPs are best kept simple. Don’t innovate with them
or less depending upon a market level. If you under- to increase your returns. Chances are you will get just
stand the market, you can invest more when the mar- the opposite: diminished returns with operational has-
ket is down and invest less when it’s rallying. This sles. Go for the monthly option. It’s suitable for most
idea appears ingenious at the outset but has its own of us. Research shows that SIP frequency has no mean-
problems. For instance, it can result in a diminished ingful impact on your returns. The strength of SIPs lies
corpus if the market keeps rallying over many years. in their simplicity.

Best for
beginners
T
hese funds are meant for first-timers – those hybrid funds can invest up to 35 per cent in debt. This
who are just starting to invest in equities. For debt allocation cushions a fall in the market. Aggressive
such investors, it’s crucial that their return hybrid funds also provide the advantage of automatic
experience shouldn’t be such that they lose the moti- rebalancing. If either the debt part or the equity part
vation to invest. Hence, the starter funds should be goes above or below the desired threshold, the fund
able to reduce volatility. In this segment, we have two manager restores it. Thus, such funds automatically
categories of funds: large-cap funds and aggressive take care of asset allocation for new investors.
hybrid funds. On the return front, large-cap funds and aggressive
Large-cap funds invest at least 80 per cent of their hybrid funds tend to give less returns than other
corpus in large companies. These companies are com- types of equity funds such as multi-cap and mid/
paratively less volatile. On the other hand, aggressive small-cap funds. But they are also less volatile.
The starter funds Worth of `10,000 SIP

Worth of `10,000 for 10 yrs with a 10% 10Y
SIP for 10 yrs annual increase in SIP returns
Fund name Category Rating (` lakh) amount (` lakh) (%, pa)
Mirae Asset Large Cap Fund Large Cap 26.02 36.89 14.80
Quant Focused Fund Large Cap Not rated 24.36 34.59 13.57
SBI Equity Hybrid Fund Aggressive Hybrid 23.71 34.15 13.07
BNP Paribas Large Cap Fund Large Cap 23.34 33.63 12.77
ICICI Prudential Equity & Debt Fund Aggressive Hybrid 23.19 33.06 12.65
SBI Bluechip Fund Large Cap 23.14 33.22 12.61
Nippon India Large Cap Fund Large Cap 22.77 32.77 12.31
ICICI Prudential Bluechip Fund Large Cap 22.61 32.58 12.17
Canara Robeco Equity Hybrid Fund Aggressive Hybrid 22.54 32.55 12.12
JM Core 11 Fund Large Cap 22.32 32.87 11.93

Total amount invested `12 lakh and after 10% annual increment `19.12 lakh. Data for regular plans and as on September 30, 2019.

The classic equity funds
M
ulti-cap funds are suitable for all equity ry as they virtually combine all three types of equity
investors. In fact, they are the only types of funds: large cap, mid cap and small cap.
equity funds that most investors will ever SEBI’s reclassification exercise in 2017-18 created
need. A basket of three-four good multi-cap funds the category of large- and mid-cap funds and value/
from different fund houses is the ideal equity portfo- contra funds. Since these funds can also practically
lio for most investors. invest across the entire market-cap spectrum, they
Multi-cap funds can invest across companies of all have also been included in this category. Large- and
sizes in any proportion. This gives the fund manager mid-cap funds have to invest at least 35 per cent each
enough room to pick the best opportunities available in large- and mid-cap stocks. Value/contra funds have
in the market. The fact that multi-cap funds can invest to follow the value-investing strategy or invest in con-
anywhere makes them the most suitable equity catego- trarian plays.
The go-anywhere funds Worth of `10,000 SIP

Canara Robeco Emerging Equities Large & MidCap 30.82 42.28 17.95
Principal Emerging Bluechip Fund Large & MidCap 27.53 38.44 15.85
SBI Focused Equity Fund Multi Cap 27.35 38.42 15.73
Kotak Standard Multicap Fund Multi Cap 25.51 36.30 14.43
Invesco India Multicap Fund Multi Cap Not rated 25.42 35.41 14.37
Franklin India Focused Equity Fund Multi Cap 25.21 35.52 14.21
Invesco India Contra Fund Value Oriented 24.99 35.62 14.05
SBI Magnum Multicap Fund Multi Cap 24.55 35.25 13.72
Tata Equity PE Fund Value Oriented 24.42 34.82 13.61
Nippon India Focused Equity Fund Multi Cap 24.26 34.25 13.49

For the risk-taker
I
f you want extra returns and are willing to take their assets in mid-cap stocks; small-cap ones must
extra risk for that, mid/small-cap funds should invest at least 65 per cent in small caps. As per SEBI’s
form a part of your portfolio. These funds predomi- criteria, the top 100 companies by market cap are large
nantly invest in mid- and small-sized companies. The caps; the next 150, mid caps; and beyond the 250th
stocks of these companies are highly volatile. In a bull company are small caps.
run, they can go up fast and in a bear market, they can Adding a mid/small-cap fund to your equity portfo-
lose several percentage points all of a sudden. lio can provide it quite some kicker. However, brace
Mid-cap funds must invest at least 65 per cent of for higher volatility also.
High returns, high volatility Worth of `10,000 SIP

SBI Small Cap Fund Small Cap 34.34 46.93 19.95
Kotak Emerging Equity Scheme Mid Cap 26.66 37.40 15.25
L&T Midcap Fund Mid Cap 26.41 36.95 15.08
Edelweiss Mid Cap Fund Mid Cap 26.41 36.76 15.08
Franklin India Prima Fund Mid Cap 26.39 36.78 15.07
Franklin India Smaller Companies Fund Small Cap 26.14 35.97 14.89
Invesco India Mid Cap Fund Mid Cap 25.98 36.31 14.78
DSP Small Cap Fund Small Cap 25.95 35.71 14.75
HDFC Mid-Cap Opportunities Fund Mid Cap 25.94 35.97 14.74
DSP Midcap Fund Mid Cap 25.89 36.47 14.71


Save tax,
build wealth
T
ax-saving funds, also called equity-linked sav- lock-in period of three years among 80C investments.
ings schemes (ELSS), are among Section 80C It’s best if you tie up your ELSS investments with a
tax-saving instruments. Tax-saving funds are long-term goal such as retirement. Don’t see them as
managed in a multi-cap way and hence can invest just a way to save tax. Also, avoid investing in them
across companies of all sizes. These funds provide around the year end or in lump sum as you may catch
income-tax deduction of up to `1.5 lakh in a year. a market high. Instead, start an SIP into them at the
ELSS funds are among the few 80C options that start of the financial year. SIPs will help you average
provide an equity exposure. They have the shortest your investment cost throughout the year.
Tax-saving + wealth creation Worth of `10,000 SIP

Fund name Rating (` lakh) amount (` lakh) (%, pa)
DSP Tax Saver Fund 24.87 35.52 13.96
Tata India Tax Savings Fund 24.79 35.38 13.89
Invesco India Tax Plan 24.40 34.76 13.60
JM Tax Gain Fund 23.71 34.51 13.06
Aditya Birla Sun Life Tax Relief 96 23.47 33.57 12.87
BNP Paribas Long Term Equity Fund 23.21 33.24 12.66
IDFC Tax Advantage (ELSS) Fund 22.79 32.48 12.32
Principal Tax Savings Fund 22.48 32.19 12.07
Franklin India Taxshield Fund 22.46 32.10 12.05
ICICI Prudential LT Equity (Tax Saving) 22.31 31.98 11.92


Old is gold
F
inally, here is a list of the oldest equity funds from a one-year to three-year perspective, but over
that have stood the test of time and given good very long periods, the wealth-creation potential of
returns. During the last 20 years, many events equity is clearly visible.
have happened in the investment world: the dot-com However, here is a word of caution. Thoroughly
crisis, the 2008 recession, the European debt crisis and research these funds before investing in them. For
so on. Domestically also, many things changed over instance, look for a change in fund manager. If the old
these 20 years. The funds listed below have seen it all fund manager is no longer around, that may impact
and delivered good returns to their investors. the fund performance. Also, analyse performance of
These funds also show how equity magic is created these funds vis-a-vis their peers which may not be 20
over the years. Equity may appear volatile when seen years old but have a promising track record as well.
The veterans Worth of `10,000 SIP

Fund name Category Rating (` cr) amount (` cr) (%, pa)
Nippon India Growth Fund Mid Cap 2.71 3.97 20.71
Franklin India Prima Fund Mid Cap 2.62 3.99 20.43
HDFC Equity Fund Multi Cap 2.21 3.41 19.09
HDFC Top 100 Fund Large Cap 2.10 3.27 18.67
DSP Equity Fund Multi Cap 2.09 3.35 18.63
ICICI Prudential LT Equity (Tax Saving) ELSS 2.06 3.26 18.54
HDFC Taxsaver Fund ELSS 1.97 3.04 18.17
Aditya Birla Sun Life Equity Fund Multi Cap 1.92 3.13 17.97
Franklin India Equity Fund Multi Cap 1.89 3.02 17.82
SBI Large & Midcap Fund Large & MidCap 1.84 3.07 17.64
Total amount invested `24 lakh and after 10% annual increment `68.73 lakh. Data for regular plans as on September 30, 2019.

Kotak Tax Saver
An open-ended equity linked saving scheme that helps
you save tax and create wealth over a long term.
Two Reasons to Rejoice
Growth Potential
&
Tax Savings of up to
*
* The tax saving assumes that the investor is in the highest tax bracket and is utilising the complete tax deduction limit of ₹1,50,000 per Financial Year.
This is only to illustrate the tax saving potential of ELSS and is not a tax advise. Please consult your tax consultant for tax purpose.
Riskometer
KOTAK TAX SAVER
$QRSHQHQGHGHTXLW\OLQNHGVDYLQJVFKHPHZLWKDVWDWXDWRU\ORFNLQRI\HDUVDQGWD[EHQHͤWV
It is suitable for investors who are seeking*:

• Long term capital growth with a 3 year lock-in.
• Investment in portfolio of predominantly equity & equity related securities.
*Investors should consult their financial advisor if in doubt about whether the product is suitable for them.
Past performance of the Sponsor/AMC/Fund does not indicate the schemes future performance. Risk Factors on page 51.
Mutual fund investments are subject to market risks, read all scheme related documents carefully. .
FOR THOSE FOCUSED
ON TOMORROW
Franklin India Focused Equity Fund invests in a
maximum of 30 stocks with a focus on the
multi-cap space. The fund seeks to achieve
capital appreciation through investing
predominantly in Indian companies/sectors
with high growth potential.
Over 3,50,000 unique investors^ in this fund,

call your Mutual Fund Distributor or visit
www.franklintempletonindia.com
PRODUCT LABEL
This fund is suitable for investors who
"MUFSOBUJWFUP Suitable for:
are seeking*:
t-POHUFSNDBQJUBMBQQSFDJBUJPO
t"GVOEUIBUJOWFTUTJOTUPDLTPG
companies/sectors with high growth
Focused Investments Retirement Education Long Term rates or above average potential
In Companies With Corpus Corpus Wealth Creation
High Growth Potential
*Investors should consult their financial
distributors if in doubt about whether
the product is suitable for them.
Follow us at : âs on Sep 30, 2019

SIP
Sahi Hai
SERIES 2
Contents
1 Secrets of profitable SIPs 5
2 Your withdrawal plan through ‘SIPs’ 7
3 Small increase, big difference 9
4 SIPs and monthly allocation 11
5 SIPs and market timing 13
6 Busting SIP myths 15
7 Start your SIPs early 17
8 Instil the SIP habit in your children 19
9 How to choose a good fund for SIPs 21
10 How to achieve your goals with SIPs 23
11 Tax planning with SIPs 25
3)0Ö3AHIÖ(AI 3
Preface
I n this second edition of SIP Sahi Hai,

we are back with the series of articles that have been published in
Mutual Fund Insight over the last one year. Looking at the sheer
number of articles that we have so far done on SIPs, one might feel if
SIPs require so much explaining. After all, the idea of SIPs is a simple
one and its effectiveness lies in its simplicity. Why overstate it then?
There are reasons why the idea of SIPs requires constant
reinforcement. First, there are numerous facets of it. While the basic
idea of SIPs remains simple, its benefits are wide-ranging. From
behavioural benefits to practical ones, SIPs serve investors in multiple
ways. Second, given the complexity of the financial world and the
influx of new and innovative financial products, simple stuff looks like
insufficient and ineffective, which is generally not the case. Third,
SIPs are so crucial that if an equity investor underestimates them, that
could translate into dire outcomes, such as sub-optimal returns, falling
short of the goal amount, losing the motivation to invest and so on.
Last but not least, during times when SIP returns are below lump-
sum returns, many investors start doubting the efficacy of SIPs. It’s
during such times that they make the mistake of suspending their SIPs,
thus foregoing a chance to average their investment cost lower. It’s
particularly during those times that reinforcing the idea of SIPs
becomes all the more important.
It appears that just like SIPs, the very idea of SIPs requires
systematic mental investments over time to get well-placed in the
minds of investors. And the articles in this booklet have done just
that over the year.
4 3)0Ö3AHIÖ(AI

Secrets of
PROlTABLE3)0S
Here are some simple things you can do to
ensure good SIP returns
T he game of investing is a curious

one. Most investors enter the market hoping to get a profit. But there is
hardly any investor who hasn’t experienced a loss. Even if the average
investor knows in his heart that in the long term, equity gives good
returns, the pain of a notional loss is so intense that many investors
turn it into a real one. Only if someone could tell them when their
investments would turn positive, they would have remained invested.
In 2017, Value Research did a study on SIP performance of
diversified equity-oriented funds for the last 25 years. The results of this
research revealed the ‘secrets of profitable SIPs’. Here are the findings:
The shorter the SIP period, the higher the probability of losses: In the study, it
was found that if you did SIPs in diversified equity funds for one year,
you had a 22.5 per cent chance of making a loss. Two-year SIPs carried
a probability of loss of 16.2 per cent. But as you increase your time
horizon, the probability of a loss comes down markedly. For five years,
it was just 3.3 per cent. And for 10 years, it was a meagre 0.3 per cent.
This means almost no probability of making a loss.
But why does it happen? Past experience tells us that the bear
markets in India typically lasted for 12 to 24 months at a time.
Therefore, a three-year SIP allows enough time for the market to
3)0Ö3AHIÖ(AI 5
bottom out and get back to its starting point. By the fourth year, the
next bull phase is usually on, allowing your investments to edge
back into the green.
The longer the SIP period, the better the chances of double-digit returns: You
may say that you don’t invest in equity funds to avoid losses. You do it
to earn a double-digit return. So, what are your chances of getting to
that 10 per cent annualised return with an SIP? The study showed that
if you did SIPs for one year, you had a 55.6 per cent chance of getting
more than 10 per cent return. For two-year SIPs, the probability grows
to 56.9 per cent. For five-year SIPs, it was 63.8 per cent. And for 10-year
SIPs, you had a 77.3 per cent chance of getting at least a 10 per cent
annualised return.
If you catch a market peak, just extend your investment horizon: The analysis
showed that if an investor kicked off his SIP at the worst-possible time
(a market peak), his chance of a loss was certainly high in the first year.
But within the next three years, he would have broken even and begun
to make some money. This suggests that investors with a 10- or 15-year
horizon need not lose too much sleep over getting the starting point of
their SIPs right. But if starting off in a bullish market, they need to be
willing to persist for five years or more to make a reasonable return.
If you are invested in a bad fund, even SIPs can’t help you: Having chosen a
poorly performing fund for your SIP, stretching the tenure of the SIP
because it is underperforming its benchmark or
peers will not materially
bolster your returns. In
fact, sticking faithfully
to SIPs in poor
performers can
entail quite a huge
opportunity cost.
The study had
many examples
of mediocre
funds that
disappointed
investors even
with SIPs. Hence,
it’s crucial that you
regularly review
your fund vis-a-
vis the peers.
6 3)0Ö3AHIÖ(AI

9OURWITHDRAWAL
PLANTHROUGH@3)0S
You have been investing consistently through SIPs. Here is
how you can create a withdrawal plan now.
W hen one learns how to drive,

steering the car in the reverse gear is quite challenging. But it’s unde-
niable that in order to master driving, you must also learn the skill of
moving the car backwards. Investing through SIPs has a similar case.
If you are investing towards a long-term goal through SIPs, that’s great.
But if you want to realise your goal most efficiently, investing through
SIPs alone isn’t enough. You also need to have a withdrawal plan.
Why a withdrawal plan? Why can’t you just sell off your
investment just when you arrive at a long-term goal such as your
kid’s college education? You could do so if the market guaranteed it
to you that it won’t shave off a few percentage points from your
accumulated returns. Markets, as we know them, are highly volatile.
This volatility could hit you just when you don’t want it to. Hence,
there is a need for a withdrawal plan.
This ‘withdrawal’ plan is nothing but an SIP from an equity fund
to a more conservative fund. When you move money between two
funds systematically, that’s called a systematic transfer plan (STP).
Since this STP is meant to protect your accumulated corpus, it
should move the corpus accumulated in an equity fund to a more
conservative fund, generally a short-duration debt fund.
3)0Ö3AHIÖ(AI 7
Let’s say you are
accumulating corpus
for your kid’s higher
education. For that,
you are investing in a
good multi-cap fund
through SIPs. Around
12–18 months before
you are going to need
the corpus, you
should start moving
the accumulated sum
to a short-duration
debt fund. Since a
short-duration debt
fund is largely stable,
you can expect it to
preserve your capital
till the time you
actually need it, of
course with its
normal 6-7 per cent Note that when you set up an
returns as well.
What about
STP, both the sending and
retirement, where receiving funds must be from
you don’t need the the same fund house
retirement corpus all
at once? First focus on the income part. The money that you are
going to need in the next three years can be moved to a short-
duration fund through an STP. This money will serve your regular-
income requirements.
Second, focus on beating inflation. In order to do that, park the
rest of your retirement corpus in a couple of good aggressive hybrid
funds, again through an STP. Aggressive hybrid funds have 65–80
per cent equity allocation, with the rest parked in debt. They provide
equity-like returns at comparatively lower volatility and hence are
ideal for most retirees. After every two years, move funds from
aggressive hybrid funds to short-duration debt funds through STPs.
Note that when you set up an STP, both the sending and receiving
funds must be from the same fund house. Speak to your financial
advisor if you face any confusions regarding the transfers.
8 3)0Ö3AHIÖ(AI

3MALLINCREASE
BIGDIFFERENCE
Raising your SIP amounts yearly can make a significant
difference to your investment outcomes,
both in terms of time and corpus
W ho doesn’t like a raise in one’s

income? If you are an employee, you must have also eagerly waited
for your annual appraisal. If you run a business, what’s better than a
hike in your margin?
A raise in income helps you in improving your standard of living
and planning for stuff that you have always wanted. It’s a recognition
for a job well done and boosts your morale.
Apart from these, a hike is also crucial because your money tends
to lose value, even when it is sitting in your safe. That’s because of
inflation. The current rate of inflation is about 4-5 per cent. It means
that, on aggregate, your income must increase so much so as to
enable you to maintain the current standard of living.
However, while we have many items on our appraisals wishlist,
one object is often overlooked: increasing you SIP amount. You may
wonder what’s the need. Increasing your SIPs with annual appraisals
helps in two ways: it helps you accumulate more than your initial
target and it helps you bridge any shortfall in your target amount.
Let’s see the first case. Say, you want to accumulate `1 crore and
can do an SIP of `20,000 per month. At 12 per cent, you will need 15
years to accomplish your goal. Now, say, you increase your yearly
3)0Ö3AHIÖ(AI 9
Attaining your goal before it’s contributions by 10
due doesn’t just lead to fulfil- per cent. It will now
take you less than 13
ment but also frees up capital years to accumulate
for other goals that you may `1 crore.
recognise at a later stage Similarly, if you
are accumulating
`20,000 monthly, in 30 years at 12 per cent, your final corpus will be
`7.06 crore. If you are also raising your yearly contributions by 10
per cent, your final corpus will be `15.01 crore. That’s the difference
that little enhancements can make over the long term.
Attaining your goal before it’s due doesn’t just lead to fulfilment
but also frees up capital for other goals that you may recognise at a
later stage. All told, it never hurts to end up with more money than
you intended. A larger corpus means a larger cushion. It can also
guard you against an abrupt rise in inflation, which can make your
initial assumptions invalid.
Let’s come to the second case now. For many of us, it may happen
that we don’t have the necessary surplus needed for attaining a goal
in a definite time period. Increasing your SIPs yearly in line with
your annual appraisal helps such investors reduce the deficit. By
aggressively increasing their SIPs, they can also remove the gap
altogether.
10 3)0Ö3AHIÖ(AI

SIPs and
MONTHLYALLOCATION
Setting up monthly SIPs works like clockwork in achieving
your long-term goals
F or someone who is new to system-

atic investment plans, or SIPs, they seem to be distinct investments in
themselves. If you ask a newbie where he is investing, you may get a
response that he is investing in SIPs. As most experienced investors
know, SIPs are not investments themselves but a systematic way of
investing in an asset class. While we often talk about SIPs in mutual
funds, you can do SIPs in stocks or, for that matter, any asset. If you
are investing regularly in an asset, you are doing SIPs.
How ‘regularly’ you invest through SIPs determines the ‘frequency’
of SIPs. Some investors ask what the ‘right’ frequency of SIPs is.
Research has proved that frequency of SIPs has limited effect on your
overall return over the long term. While you can do SIPs even on a
daily basis, for most of us, a monthly regime is the most suitable. This
is because more frequent SIPs can cause computational hassles as each
SIP is considered a fresh investment from the taxation perspective.
Secondly, since many of us get our incomes on a monthly basis, a
monthly SIP automatically fits into the overall plan.
The next question that even the more experienced investors grapple
with is how much to invest through SIPs for a long-term goal. For
instance, you want to accumulate a corpus of `1 crore for your
3)0Ö3AHIÖ(AI 11
Even if your SIPs are less retirement. You are
currently 30. How
than what’s required, don’t much SIP should
lose heart. Just keep investing you do to reach that
and raising your SIPs on a amount by the time
yearly basis. you turn 60? The
answer is `2,861 if
your fund is going to get you 12 per cent per annum. How can you
calculate this figure yourself. Many online savings calculators can
help you make such calculations.
Many investors like to mark particular schemes for particular goals.
For instance, ABC scheme is meant for retirement; DEF scheme is
meant for children’s education; PQR scheme is meant for foreign travel
and so on. There is nothing wrong with such segmentation if it eases
your job. Just make separate SIP calculations and invest in them.
Once you have determined your monthly allocation to SIPs in
various funds, you just need to be disciplined and SIPs will do the job
for you. Even if your SIPs are less than what’s required, don’t lose
heart. Just keep investing and raising your SIPs on a yearly basis. If
you raise your SIPs every year in line with your annual appraisals,
that can help you not just bridge a shortfall but also reach your goals
faster and more efficiently.
12 3)0Ö3AHIÖ(AI

SIPs and
MARKETTIMING
Timing the market is tempting but it’s nearly impossible.
SIPs are the best way to profit from the volatility in equity.
W hen it comes to investing, tim-

ing the market can be counterproductive to your investment returns.
Why? You may wonder. After all, if you are going to buy at the bot-
tom and sell at the top, market timing can actually be very reward-
ing. Hypothetically, that’s right – but only hypothetically. That’s
because no one can tell when the market or a stock has bottomed
and when it has reached a high. It’s only in hindsight that you see
tops and bottoms, not in foresight.
But wait! Aren’t there many models and tools that can predict a
market top or bottom? What about technical analysis? The charm of
guessing a top and bottom is so widespread that you can find complete
books written on this topic. But there isn’t any reliable method, even if
we discount the complexity of such methods and techniques. If there
were one, everyone would be following it.
So, how do you know when to invest? The answer is you need not.
Don’t worry about the market levels. Just invest through SIPs. SIPs
help you invest over a period of time, thus averaging your investment
cost. When you invest near market highs, you are automatically
allotted fewer units. When you invest near market lows, you get more.
Trying to time the market can also result in opportunity cost. When
3)0Ö3AHIÖ(AI 13
markets are
Both fear and greed don’t
trending higher,
come your way when you are those who try to
investing through SIPs. time the market
Hence, you are always invest- wait for a low to
enter it. Often they
ing in the market rather than
find that the market
waiting for the right time. keeps rallying.
When markets are
sliding, they tend to wait for the market to hit a bottom. Again, often
a recovery happens before they can even act. Hence, those who try to
time their entry and exit end up simply sitting out of the market. Just
like market highs and lows, no one can say with precision what’s the
duration of a bull or bear market is. It’s just in hindsight that you can
say so.
SIPs help you here also. Since SIPs don’t require you to decide
when to invest, you keep investing through highs and lows. Both fear
and greed don’t come your way when you are investing through SIPs.
Hence, you are always investing in the market rather than waiting for
the right time. This enhances the likelihood of satisfactory
investment outcomes.
For instance, consider the last five years. The market rally began in
May 2014, when the Sensex was around 24,000. It has since moved to
about 38,000 presently. In the interim, it didn’t show any major fall
and didn’t go below 27,600. If you were waiting for a good point to
make entry, you wouldn’t have found one. As a result, you would still
be waiting. However, if you did SIPs in a multi-cap fund during this
time, you would have got over 70 per cent return during this time. So,
trust the famous investment adage: time in the market is more
important than timing the market.
14 3)0Ö3AHIÖ(AI

"USTING
3)0MYTHS
Four popular misbeliefs that investors have about SIPs and
what the truth is
T here is no denying the fact that

SIPs are gaining popularity, with many investors taking to them. That’s
good news certainly as SIPs optimise your investment returns. But ris-
ing popularity of anything also results in many misconceptions about it.
Because many investors have learnt about SIPs from others, they may
have not taken the time to appreciate their true nature. What’s more,
when such investors go ahead and ‘counsel’ others about the need for
SIPs, these misconceptions, or myths, get reinforced. Here we discuss
four popular myths that people have nurtured about SIPs and what the
truth is.
Investing ‘in’ SIPs: If you ask a novice SIP investor about where he is
investing, an interesting answer comes: ‘I am investing in SIPs’. Well, if
you ask which fund it is, the investor has little idea. If he does
remember something, it’s not the name or the category of the fund but
the name of the AMC.
Remember that you don’t invest ‘in’ an SIP. You invest ‘through’ an
SIP in an equity fund. SIPs are not investments themselves; they are a
method. Eventually, your returns will be guided not just by SIPs but by
the underlying fund.
Hence, while it’s good that you have taken the SIP route, it’s equally
3)0Ö3AHIÖ(AI 15
crucial that you select a good equity fund.
The more frequent the SIP, the better it is: Systematically
investing your money in equity helps you average
out your investment cost and thus helps you take
advantage of the market’s ups and downs. But some
investors take this too far. They think that increasing
the frequency of SIPs helps you get better returns. So, if
you do fortnightly, weekly or even daily SIPs, then
that’s better than a monthly SIP.
Research has repeatedly proved that increasing the
frequency of SIPs has no material impact on returns
but it does increase the operational hassle on your
part. A monthly SIP is the best way to benefit from
market fluctuations while also keeping the paperwork in check.
Complex SIPs are better than a simple SIP: Today many variants of SIPs are
available. They allow you to vary your investment as per some
determinant. For instance, one type of SIP allows you to reduce your
investment amount in a rising market and increase it in a falling market,
thus helping you invest more when the stocks are cheaper. Many
investors find such complex SIP ideas appealing.
In theory, complex SIP methods do look promising. In practice,
however, they may cause many hassles which are not easily foreseen.
For instance, the SIP described above can result in a lower
accumulated corpus should the markets rally and greater financial
strain should the markets decline for a prolonged period.
Our research suggests that the SIPs in their simple, original form are
the best way, both in terms of returns and ease of doing. Hence, don’t
try to complicate your SIPs. Stick with simplicity.
Stopping your SIPs in a bear phase helps: Some investors, out of fear or in
order to act smart, discontinue their SIPs in a bear phase. Why lose your
money? They say. When markets jump, they start investing again.
Timing your SIPs, i.e., starting or stopping them as per the market
phase looks intuitive, yet it’s counterproductive. First, when you stop
your SIPs during a bear phase, you lose the opportunity to average out
your buying price lower. Second, when you try to time the market, you
are often left out and thus incur an opportunity cost if the market
suddenly starts racing.
By their very design, SIPs are meant to discourage this investor
behaviour. By making you invest through all market phases, SIPs keep
both fear and greed in check. If you are investing through SIPs, what
matters most is discipline, not timing.
16 3)0Ö3AHIÖ(AI

3TARTYOUR3)0S
EARLY
Starting your SIPs early can help you achieve your goals
with much less monthly contributions. Alternatively,
it can help you build greater wealth.
A ccording to a popular saying, being

early to bed and rise makes one healthy, wealthy and wise. But it’s not
just waking up early that’s good; in many aspects, being early has its
own advantages. For instance, if you have to take a flight, you should
start earlier than necessary. If you do, you won’t have to rush, curse
the traffic every time your car slows down, and stand in a long queue
at the baggage counter. By being early, you can relax, enjoy a cup of
tea and snacks at the lounge, and take a stroll on the airport. Starting
early is often the key to peace of mind.
Why should it be any different for SIPs? Starting your SIPs early
comes with a lot of advantages. The most obvious is that you have a
longer time to save and invest for your goals. That means if you start
early, you can accomplish the same goals with much smaller amounts.
How? We shall see an illustration soon. The second advantage is that
when you start your SIPs early, you get into the habit of saving early.
As you grow up, this habit only deepens its roots, thus making you a
star saver and investor. Another advantage is that since at a young age,
you have fewer responsibilities, you can direct more money to
investments than you can if you are in your thirties, are married and
have children.
3)0Ö3AHIÖ(AI 17
When you start your
SIPs early, you get into
the habit of saving
early. As you grow up,
this habit only deep-
ens its roots, thus
making you a star
saver and investor.
Let’s see how starting early
helps you achieve your goals
with a much smaller amount.
Say, you want to save `1 crore
for a long-term goal, like
retirement. You start investing at
an age of 25. You have 35 years
before you turn 60. You will need to
do an SIP of `1,540 monthly in an
equity fund, assuming that the fund returns 12 per cent per annum. If
you start investing when you are 35, you will have 25 years before you
turn 60. Now you will need to do an SIP of `5,270, assuming the same
rate of return. Thus, by starting early, you can achieve the same goal
by investing much less every month. Alternatively, you can achieve
your goals faster when you begin early. This provides you headroom
for more aspirational activities and goals later.
Starting early also helps you profit more from the power of
compounding. If you start investing `10,000 monthly when you are 25
and raise your SIP contribution by 10 per cent every year, in 35 years
(until you retire), you will have amassed `14.82 crore. On the other
hand, if you start investing `10,000 at an age of 35 and raise your
contribution by 10 per cent yearly, you will have a corpus of `3.70
crore when you turn 60. In the former case, your original investment
is `3.25 crore and the return generated is `11.57 crore (return is 356
per cent of the capital). In the second case, your original investment is
`1.18 crore and the return generated is `2.52 crore (return is 213 per
cent of the capital). This shows the power of compounding.
So, if you are young, start your SIPs now. If you are already late,
never mind. Start now and don’t forget to pass on the wisdom of
starting early to your children.
18 3)0Ö3AHIÖ(AI

)NSTILTHE3)0HABIT
INYOURCHILDREN
By teaching their children the importance of systematic
investing, parents can set them up for a prosperous life
C hildren are excellent learners. From

the time they are born till they attain adulthood, they are in the con-
stant process of learning. If they are given good education and guidance,
they can develop into confident and prudent adults. Little surprise that
many parents are especially concerned about their children’s education.
But what about financial education? Not many parents can boast of
equipping their children with that, at least for a significant part of
their childhood. Financial education is generally postponed till a
person starts earning. And then who provides it? Many of us have
learnt simple financial lessons the hard way. Some of us may not
realise the importance of saving and investing even after many years
into adulthood. Even worse, by the time we grow up, we may have
developed deep-rooted bad financial habits that prove to be an
impediment to progress for the rest of life.
Unfortunately, financial education isn’t a part of school curriculum.
But, as a parent, you can start your child’s financial education while
your kid’s world is all about toys, playtime and cartoon films. Start
with educating your child about saving. Get your child a piggy bank or
a gullak. Encourage him to regularly put money in it. A simple
formula could be to give a `1 coin to your child daily and asking him
3)0Ö3AHIÖ(AI 19
Talk about the importance
of money. Emphasise how
one has to work hard to
earn it and that’s why one
should judiciously use it.
to put it in his gullak. Over time, he will accumulate many coins and
there will come a point when the gullak is full. Take out the coins at
that time and show your child how his daily contributions have
resulted in a ‘large’ corpus over time. Most likely, your kid is going to
be amazed. This would be his first lesson on systematic investing.
As your child grows, introduce him to banking. The idea of
systematic investing remains same here. Encourage your child to put
some money in his account regularly. The difference this time will be
the extra returns he can generate through interest income. Of course,
the return isn’t high, yet for a child that’s almost magical – extra
money by just keeping money in a bank account!
At an appropriate time, introduce your child to the stock market and
investing in it through mutual funds. Tell him how he can build wealth
by systematically investing in a good equity fund. Emphasise the need
for staying invested through various phases of the market. Discuss how
the market has created wealth over time. As your child turns 18,
encourage him to start investing in equity funds through SIPs. Assist
him for the next few years till he becomes a confident investor.
A few other things also go a long way in creating an environment of
financial discipline at home. Talk about the importance of money.
Emphasise how one has to work hard to earn it and that’s why one
should judiciously use it. Walk the talk. Act in the same way as you
would want your child to act. Reward good financial behaviour.
Warren Buffett started investing when he was just 11. By providing
your child the right financial guidance, you can also set him on the
path of financial prosperity. What you teach him now will stay with
him forever. Indeed, child is father of the man.
20 3)0Ö3AHIÖ(AI

How to choose a
GOODFUNDFOR3)0S
If your SIPs are not delivering, it could be due to a poor choice
of fund. Here is how you can pick a good equity
fund for your SIPs.
T oday most investors are aware of

the importance of SIPs as a wealth-building tool. But many investors
also want to know why their ‘SIPs’ are not making money. The reasons
for this could be many. Perhaps the market has been falling since you
invested in your SIPs; or perhaps you did SIPs in a rising market and
it is now falling; or perhaps it’s been just a couple of months since you
have been investing through SIPs. One reason that stands out is that
you made a wrong choice of fund.
Interestingly, the fact that they may have chosen a wrong fund
surprises investors. That’s because investors don’t see SIPs as a
method but as a vehicle. Hence, when they are asked about where
they are investing, they often say ‘in SIPs’. In reality, SIPs are just a
method of investing, where you invest systematically in an equity
fund. By doing so, you reduce the chances of investing all your money
at a market high and you get to average your overall cost. When the
market is falling, your SIPs get you more units of an equity fund.
When the market is rising, you automatically buy fewer units. Above
all, SIPs help you invest in a disciplined manner and create a large
corpus with small investments. But if you have invested in a fund that
has historically trailed its category, you are likely to get sub-optimal
3)0Ö3AHIÖ(AI 21
returns even if you invest through SIPs. Hence, choosing the right
fund is absolutely important. How can one do that? Here are a few
guidelines:
Choose the right category: There are many types of equity funds depending
on where they invest. First select the ones most appropriate for your
requirement. Some predominantly invest in large caps, some in mid
caps; some invest in just one sector or theme. Multi-cap funds can
invest across companies of all sizes and hence can tap the market
opportunities better. Those who are willing to take extra risk for extra
returns can also explore mid- and small-cap funds. If you are looking to
save tax, you can pick a tax-saving fund.
Assess the long-term returns: One mistake that investors make while
assessing an equity fund is that they focus too much on recent
returns. A fund can clock higher gains owing to risky bets or
momentum plays that work in the short term but backfire eventually.
Hence, see historical returns over the long run – five years, 10 years
and so on. It’s also important to see how much the fund has lost in a
bad phase, such as 2008. An ability to contain downside is a
desirable trait in a fund.
Check the stability of fund management: Check the tenure of the current
fund manager. If the fund manager has been around for many years,
that’s generally a positive. That’s because an experienced fund
manager has been through many market phases and knows how to
steer the fund during tough times. Consistency in management style
also tells investors what they can expect from the fund.
Compare expenses: Over the long term, fund expenses can make a
difference to your overall returns. Hence, do
check them. But don’t make them the most
important criterion of selection. If you can
pick funds yourself and track their
performance, you can go for direct plans,
which don’t involve distributor
commission. However, if you need
the assistance of an advisor or a
distributor to keep you on track, it’s
better to invest in a regular plan.
Finally, when it comes to equity
funds, always take the SIP route.
Combined with a good fund, SIPs can
help you maximise your returns over
the long term.
22 3)0Ö3AHIÖ(AI

How to achieve
YOURGOALSWITH3)0S
Doing your SIPs in a disciplined manner can help you achieve
large goals that otherwise look daunting
Y ou must have heard the story of the

ant and the grasshopper. Knowing that the winters are approaching, the
ant, along with the others in her colony, works hard to gather food
grains and store them. The grasshopper sees the ant working and mocks
her. He believes that one should enjoy one’s present and not worry
about the future. He also finds it futile to look for single food grains and
accumulate them. After all, how much can one gather doing that? The
ant tries to persuade the grasshopper that he should also make provi-
sions for the future, lest he would not find any food in the winters. But
the grasshopper turns a deaf ear to her advice. When the winters arrive,
the ant has accumulated more than enough food. A severe winter and
the snowfall covers all vegetation, leaving absolutely no food for the
grasshopper. Out of hunger, he falls unconscious. When the ant gets to
know about that, it offers food to the grasshopper, thus saving his life.
It would not be wrong to call the ant an SIP investor. She kept
accumulating grains – one at a time – and eventually reached a stage
where she had enough for the full season. She realised her goal through
small investments. For the grasshopper, the contributions were too
minuscule to make any appreciable difference.
While SIPs may look small at the time you make them, over time
3)0Ö3AHIÖ(AI 23
It’s advisable that you
run separate SIPs for
each goal. This will help
you gauge your invest-
ment in a better way.
they accumulate to become a large amount. When you make those SIPs
in an equity fund, you also stand to gain from capital appreciation over
the long run. For instance, if you invest `5,000 monthly in an equity
fund that returns 12 per cent, in 10 years you will have accumulated
`11.62 lakh. This amount is almost magical to someone who only sees
the end result.
No matter how formidable your goal may appear, you can start
saving towards it. Just break it into small parts and this is what SIPs
do for you. They help you overcome the inertia that may develop by
just looking at the sheer size of the corpus required. However, do
revise your SIP amounts regularly as your income increases. This will
help you accumulate the desired corpus faster. Also, if your SIPs
weren’t enough for the goal amount, you can make up for the shortfall.
In the above illustration, if you also increase your SIPs by 10 per cent
annually, you can accumulate `15.36 lakh.
We all have multiple goals to accomplish: retirement, children’s
education and weddings, buying a house or a car, vacation and so on.
It’s advisable that you run separate SIPs for each goal. This will help
you gauge your investment in a better way. Choose the right category of
funds for each goal, depending on its timeline. For goals that are more
than five years away, go for equity funds. For goals that are three to five
years away, equity-savings and conservative hybrid funds can do the
job. For goals that are one year to three years away, accumulate your
corpus in short-term debt funds. For goals that are due in the next one
year, ultra-short-duration funds or liquid funds are just fine.
While investing in equity, go through the SIP route. This will ensure
that you don’t invest all your money at a market peak. And last but not
least, be disciplined with your SIPs and have faith in them.
24 3)0Ö3AHIÖ(AI

4AXPLANNING
with SIPs
By investing in tax-saving funds through SIPs, you don’t just
save the income tax but also build wealth for the long term
T here are still a couple of months for

the tax-planning pursuit to start. In February and March, many will sud-
denly realise that they had made certain tax-saving declarations to their
companies at the start of the financial year. If they don’t make those
investments, their salaries will reflect a big tax cut. In order to avoid
that pain, they will quickly find out some tax-saving avenue, invest in it
and heave a sigh of relief.
This behaviour is generally counterproductive. That’s because in
haste, you may end up investing in an avenue which provides you
dismal returns while locking your capital for a long time. What’s more,
you may be forced to keep investing in that avenue in the subsequent
years, thanks to the mandatory tenures of some tax-saving investments,
such as insurance plans.
The right time to start your tax-saving investments is the beginning of
the year. If you haven’t yet started making tax-saving investments,
consider this article a reminder. When you start early, you can spend
time in finding the right tax-saving option for you. You won’t be
overburdened with making lump-sum investments at the last moment.
Finally, if you are investing in a market-linked instrument, such as a tax-
saving fund, you can get to average your investment cost.
3)0Ö3AHIÖ(AI 25
While there are many
ways in which you can
save tax, here we are
going to talk about tax-
saving investments in
Section 80C, which
allows you to make tax-
saving investments up to
`1.5 lakh in a year in the various instruments it mentions. These
include tax-saving mutual funds (equity-linked savings schemes, ELSS),
Public Provident Fund, Employees’ Provident Fund, tax-saving deposits,
the National Pension System, insurance policies, etc.
Tax-saving funds, or ELSS, have a special place among Section 80C
instruments. First, they provide you equity exposure to help you grow
your capital in the long term. Because all 80C avenues lock up your
capital, it’s sensible to aim for higher returns. Second, they have more
transparency and efficiency than other equity-linked 80C products like
unit-linked insurance. Third, the lock-in period for tax-saving funds is
only three years as against five years for insurance plans, 15 years for
the PPF and till retirement for the NPS.
But one should avoid investing a lump sum in ELSS. That’s because
you may catch a market peak if you do so. If the market falls after you
have made a lump-sum investment, your return experience will sour.
Worse, you may lose the motivation to invest any further. Hence, it’s
best to invest through SIPs. SIPs help you average your investment cost
and improve your overall return experience.
It’s also important to start seeing your tax-saving investments from a
long-term perspective. It’s a good idea to tie them with a long-term goal
such as retirement. This will not just help you accumulate capital for
that long-term goal but will also make you more responsible and
concerned about your tax-saving investments. SIPs will do magic for
you here. Let’s assume that you invest `12,500 monthly (`1.5 lakh in a
year) in a tax-saving fund that returns 12 per cent. You begin investing
when you are 25 and go on doing so until you turn 60. In these 35
years, you will have accumulated a corpus of `8.04 crore. You achieve
this by just being disciplined with your SIPs and taking your tax-saving
investments more seriously.
According to a popular Chinese proverb, the best time to plant a
tree was 20 years ago. The second best time is now. Plant your tree of
ELSS investments now and regularly give it the water of SIPs to help it
become a giant.
26 3)0Ö3AHIÖ(AI

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TH

Performance Top quartile Second quartile Third quartile Bottom quartile

India’s Finest Funds 3

Conservative growth funds

4 India’s Finest Funds

Conservative      

SIP VALUE (lakhs) SIP VALUE (lakhs) SIP VALUE (lakhs)

` 8.48 ` 8.78 ` 6.82 ` 6.95 ` 7.36 ` 7.50

PERFORMANCE (%) - REGULAR PERFORMANCE (%) - REGULAR PERFORMANCE (%) - REGULAR

predominantly in the 2017 2017 2017

India’s Finest Funds 5

` 7.51 ` 7.69 ` 7.10 ` 7.19 ` 4.03 ` 4.14 ` 7.88 ` 8.08

FUND MANAGER/S FUND MANAGER/S FUND MANAGER/S FUND MANAGER/S

QUARTILE PERFORMANCE QUARTILE PERFORMANCE QUARTILE PERFORMANCE QUARTILE PERFORMANCE

6 India’s Finest Funds

` 7.20 ` 7.37 ` 7.58 ` 7.37 ` 7.57 ` 4.14

PERFORMANCE (%) - DIRECT PERFORMANCE (%) - DIRECT

FUND MANAGER/S FUND MANAGER/S FUND MANAGER/S FUND MANAGER/S

QUARTILE PERFORMANCE QUARTILE PERFORMANCE QUARTILE PERFORMANCE QUARTILE PERFORMANCE

India’s Finest Funds 7

` 7.62 ` 7.64 ` 7.38 ` 7.60 ` 8.32 ` 8.62

PERFORMANCE (%) - REGULAR PERFORMANCE (%) - REGULAR PERFORMANCE (%) - REGULAR

8 India’s Finest Funds

` 8.01 ` 8.25 ` 7.50 ` 7.75 ` 7.72 ` 7.93 ` 7.16 ` 7.39

FUND MANAGER/S FUND MANAGER/S FUND MANAGER/S FUND MANAGER/S

QUARTILE PERFORMANCE QUARTILE PERFORMANCE QUARTILE PERFORMANCE QUARTILE PERFORMANCE

10 India’s Finest Funds

` 7.60 ` 7.91 ` 7.49 ` 7.82 ` 7.79 ` 8.02 ` 7.01 ` 7.18

FUND MANAGER/S FUND MANAGER/S FUND MANAGER/S FUND MANAGER/S

QUARTILE PERFORMANCE QUARTILE PERFORMANCE QUARTILE PERFORMANCE QUARTILE PERFORMANCE

India’s Finest Funds 11

` 8.34 ` 8.54 ` 4.14 ` 4.24 ` 7.61 ` 7.81 ` 7.79 ` 7.93

FUND MANAGER/S FUND MANAGER/S FUND MANAGER/S FUND MANAGER/S

QUARTILE PERFORMANCE QUARTILE PERFORMANCE QUARTILE PERFORMANCE QUARTILE PERFORMANCE

14 India’s Finest Funds

` 7.38 ` 7.61 ` 8.06 ` 8.28 ` 7.44 ` 7.67 ` 7.71 ` 7.99

FUND MANAGER/S FUND MANAGER/S FUND MANAGER/S FUND MANAGER/S

QUARTILE PERFORMANCE QUARTILE PERFORMANCE QUARTILE PERFORMANCE QUARTILE PERFORMANCE

India’s Finest Funds 15

` 8.28 ` 8.48 ` 7.18 ` 7.32 ` 0.95 ` 0.96

PERFORMANCE (%) - REGULAR PERFORMANCE (%) - REGULAR PERFORMANCE (%) - REGULAR

diversify 2017 2017 2017

EXPENSE RATIO (%) EXPENSE RATIO (%) EXPENSE RATIO (%)

FUND MANAGER/S FUND MANAGER/S FUND MANAGER/S

QUARTILE PERFORMANCE QUARTILE PERFORMANCE QUARTILE PERFORMANCE

16 India’s Finest Funds

Aggressive      

growth Aditya Birla Sun Life Tax

` 7.24 ` 7.45 ` 7.93 ` 8.19 ` 7.07 ` 7.28

PERFORMANCE (%) - REGULAR PERFORMANCE (%) - REGULAR PERFORMANCE (%) - REGULAR

India’s Finest Funds 17

` 6.41 ` 6.63 ` 7.20 ` 7.47 ` 7.28 ` 7.55 ` 7.14 ` 7.33

FUND MANAGER/S FUND MANAGER/S FUND MANAGER/S FUND MANAGER/S

QUARTILE PERFORMANCE QUARTILE PERFORMANCE QUARTILE PERFORMANCE QUARTILE PERFORMANCE

18 India’s Finest Funds

SIP VALUE (lakhs) SIP VALUE (lakhs) SIP VALUE (lakhs)

` 7.12 ` 7.31 ` 7.06 ` 7.19 ` 8.01 ` 8.29

PERFORMANCE (%) - REGULAR PERFORMANCE (%) - REGULAR PERFORMANCE (%) - REGULAR

PERFORMANCE (%) - DIRECT PERFORMANCE (%) - DIRECT PERFORMANCE (%) - DIRECT

EXPENSE RATIO (%) EXPENSE RATIO (%) EXPENSE RATIO (%)

FUND MANAGER/S FUND MANAGER/S FUND MANAGER/S

QUARTILE PERFORMANCE QUARTILE PERFORMANCE QUARTILE PERFORMANCE

India’s Finest Funds 19

Conservative

Aggressive

Conservative

Short-term,

Capital

SBI Bluechip Fund Large Cap 23.14 33.22 12.61

JM Core 11 Fund Large Cap 22.32 32.87 11.93

Tata Equity PE Fund Value Oriented 24.42 34.82 13.61

L&T Midcap Fund Mid Cap 26.41 36.95 15.08

DSP Midcap Fund Mid Cap 25.89 36.47 14.71

DSP Tax Saver Fund 24.87 35.52 13.96

Tata India Tax Savings Fund 24.79 35.38 13.89

Invesco India Tax Plan 24.40 34.76 13.60

JM Tax Gain Fund 23.71 34.51 13.06

IDFC Tax Advantage (ELSS) Fund 22.79 32.48 12.32

Principal Tax Savings Fund 22.48 32.19 12.07

Franklin India Taxshield Fund 22.46 32.10 12.05

ICICI Prudential LT Equity (Tax Saving) 22.31 31.98 11.92

HDFC Equity Fund Multi Cap 2.21 3.41 19.09

DSP Equity Fund Multi Cap 2.09 3.35 18.63

HDFC Taxsaver Fund ELSS 1.97 3.04 18.17