SIP allows investors to regularly invest a fixed amount of money into a mutual fund. This investment strategy has many benefits including tax rebates. Know more
Overview:
Investing your funds properly is one of the best ways to accumulate wealth. In this present day, systematic investment plans (SIPs) are gaining major interest among the masses due to their advantages. Let’s see about SIP Invest Plan in 2024 in this article.
A Systematic Investment Plan (SIP) is a straightforward and organised technique to buy equities or mutual funds. You begin by contributing a fixed amount to an investing account, which is then used to buy shares of stock or mutual funds according to a predetermined timetable.
The most popular method for doing this is to buy shares through a monthly deposit plan, in which you make recurring installments into your account over a predetermined time frame. Depending on your requirements and interests, you can also select quarterly or yearly programs.
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Info: The SIP book increased steadily, reaching a record high of ₹13,573 crore in December 2022 from ₹11,305 crore in December 2021. Additionally, this was the third consecutive month where SIP contributions exceeded ₹13,000 billion. The sector has added ₹2.2 lakh crore to the AUM in 2022, taking it from ₹27.72 lakh crore at the end of December 2021 to ₹39.88 lakh crore. This is due to the constant monthly increase in SIP flows. |
Top SIP Invest Plan in 2024
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Equity Linked Saving Scheme (ELSS)
An ELSS is a type of mutual fund that invests primarily in equities and offers tax benefits under Section 80C of the Income Tax Act. Equity Linked Saving Scheme (ELSS) is a type of mutual fund that invests primarily in equities and offers tax benefits under Section 80C of the Income Tax Act in India. ELSS funds are diversified equity funds that invest in a mix of large-cap, mid-cap, and small-cap stocks, providing exposure to the Indian stock market.
ELSS funds have a lock-in period of 3 years, which means that the investment cannot be redeemed before 3 years from the date of investment. This helps promote long-term investing and reduces the tendency to make impulsive investment decisions based on short-term market movements.
ELSS funds are considered a tax-saving investment option as the investments made in ELSS up to ₹1.5 lakh are eligible for tax deduction under Section 80C of the Income Tax Act. The returns generated by ELSS funds, including capital gains, are taxed as per the applicable tax slab of the investor. Investors who have a moderate to high risk tolerance and are looking for tax-saving investments can consider investing in ELSS funds through a SIP.
Best ELSS or Tax Saving Mutual Funds SIP Plans to Invest in 2024:
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- Axis Long Term Equity Fund
- Canara Robeco Equity Tax Saver Fund
- Mirae Asset Tax Saver Fund
- Invesco India Tax Plan Fund
- DSP Tax Saver Fund
- Quant Tax Plan (new addition)
- Bank of India Tax Advantage (new addition)
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Real Estate Investment Trusts (REITs)
A REIT is a type of investment trust that invests in real estate properties and pays out the majority of its rental income to investors. Real Estate Investment Trusts (REITs) are a type of investment trust that invest in real estate properties and pay out the majority of their rental income to investors. REITs provide investors with exposure to the real estate sector without the need to directly purchase properties.
REITs typically invest in a portfolio of properties, such as office buildings, shopping centers, hotels, and residential properties, and generate income from rent and property appreciation. The income generated by REITs is then paid out to investors in the form of dividends.
REITs are generally considered to be a low-risk investment option as the underlying properties generate a stable stream of income. They can provide investors with regular income and long-term capital appreciation.
| Did you know: There are three REITs listed in the stock market — Embassy Office Parks REIT, Mindspace Business Parks REIT and Brookfield India REIT, which have given returns of 3.01%, 3.02% and -1.57%, respectively, in the last one year. There are likely to be more REIT listings in the remaining months of FY23, according to experts |
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Infrastructure Investment Trusts (InvITs)
An InvIT is a type of investment trust that invests in infrastructure projects, such as roads, bridges, and power plants, and pays out income generated by these projects to investors. Infrastructure Investment Trusts (InvITs) are a type of investment trust that invests in infrastructure projects such as roads, bridges, power plants, and other physical assets that provide essential services to the economy. InvITs provide investors with exposure to the infrastructure sector and the income generated by these assets.
InvITs invest in a portfolio of completed and revenue-generating infrastructure projects and receive regular income in the form of fees, tolls, and other charges. The income generated by InvITs is then distributed to investors in the form of dividends. InvITs offer several benefits to investors, including a stable stream of income, the potential for long-term capital appreciation, and the opportunity to invest in essential infrastructure projects that drive economic growth.
Investors who are looking for an investment option that provides exposure to the infrastructure sector and offers a stable stream of income can consider investing in InvITs through SIP Invest Plan in 2024. It is important to note that InvITs may not be suitable for all investors, and a comprehensive understanding of the underlying assets, the infrastructure sector, and the financial health of the InvIT is essential before making an investment decision.
7 Best Infrastructure Sector Funds in India FY 23 – 24
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- Franklin Build India Fund
- IDFC infrastructure fund
- Kotak infrastructure and economic reform fund
- DSP blackrock India tiger fund
- Nippon India power and infra fund
- ICICI prudential infrastructure fund
- HDFC infrastructure fund
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Exchange Traded Funds (ETFs)
An ETF is a type of investment fund that tracks an underlying index, such as the S&P 500, and can be traded on stock exchanges just like individual stocks. Exchange Traded Funds (ETFs) are investment funds that track an underlying index, such as the S&P 500, and can be traded on stock exchanges like individual stocks. ETFs provide investors with exposure to a diversified portfolio of assets, such as stocks, bonds, commodities, or a combination of these.
ETFs have several advantages over traditional mutual funds, including lower costs, greater transparency, and the ability to be traded throughout the day. ETFs also offer greater flexibility in terms of investment options, with ETFs available that track various market indices, sectors, and themes.
Investors who are looking for a low-cost, flexible, and diversified investment option can consider investing in ETFs through SIP Invest Plan in 2024. It is important to note that ETFs may not be suitable for all investors, and a comprehensive understanding of the underlying assets, the market, and the financial health of the ETF is essential before making an investment decision. Additionally, it is important to consider factors such as the expense ratio, liquidity, and risk profile of the ETF before investing. Here are some top ETFs to try investing in
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- Motilal Oswal NASDAQ 100 ETF
- HDFC sensex ETF
- SBI s&p BSE sensex ETF
- Edelweiss ETF-NQ30
- UTI S&P BSE Sensex ETF
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Equity-Oriented Mutual Funds
Equity-oriented mutual funds invest primarily in equities and aim to generate long-term capital appreciation. These funds can be invested through a SIP for regular, disciplined investment in the equity markets. Equity-oriented mutual funds are a type of mutual fund that invests primarily in equities, or stocks, of companies. These funds aim to provide investors with long-term capital appreciation by investing in a diversified portfolio of stocks. Equity-oriented mutual funds can be further classified into different sub-categories based on their investment objective and the type of stocks they invest in, such as large-cap, mid-cap, small-cap, sector-specific, and thematic funds.
Equity-oriented mutual funds carry higher risk than debt-oriented funds, as the value of the investments may fluctuate based on the performance of the stock market and the underlying stocks. However, over the long term, equity-oriented funds have the potential to provide higher returns compared to debt-oriented funds.
Investors who have a moderate to high risk tolerance and are looking for long-term capital appreciation can consider investing in equity-oriented mutual funds through a SIP Invest Plan in 2024. It is important to note that the performance of equity-oriented funds is dependent on the performance of the stock market, and a comprehensive understanding of the market and the financial health of the underlying stocks is essential before making an investment decision.
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- Mirae Asset tax saver fund- Direct Plan
- Quant Active fund – Direct plan
- Mirae Asset Emerging Bluechip Fund- Direct plan
- Canara Robenco Emerging equity fund
- Direct plan Axis midcap fund
- Invesco India Contra fund
- Parag Parikh Flexi Cap Fund – Direct Plan
- IIFL Focused Equity Fund – Direct Plan
| Note: Investment in any of the options is highly subject to market fluctuations. The above mentioned investment vehicles are some popular opinions based on the market survey. Vakilsearch does not stand liable for any losses/benefits associated with the investment made in these options. We do not direct you to invest in these schemes. |
Factors to be Considered While Investing in the SIP
Before investing in an SIP (Systematic Investment Plan) scheme, investors should consider the following factors and features:
- Investment Objective: Investors should align their investment objectives with the goals of the SIP scheme. For example, if an investor’s goal is to generate long-term capital appreciation, an equity-oriented SIP Invest Plan in 2024 may be more appropriate
- Risk Tolerance: Investors should consider their risk tolerance and choose an SIP scheme that is in line with their investment personality and risk appetite. Equity-oriented SIPs carry higher risk than debt-oriented SIPs
- Investment Horizon: The investment horizon is the length of time that an investor is willing to hold onto their investment. Investors should choose an SIP scheme that aligns with their investment horizon and their investment goals
- Fund Manager’s Track Record: Investors should research the fund manager’s track record, including the performance of their previous funds, the fund manager’s investment style, and their experience in managing similar funds
- Fund Expense Ratio: The fund expense ratio is the fee charged by the fund manager for managing the fund. Investors should compare the expense ratios of different SIP schemes and choose a scheme that offers a low expense ratio
- Diversification: Investors should consider the level of diversification offered by the SIP scheme and ensure that the scheme invests in a variety of assets, such as stocks, bonds, and commodities
- Liquidity: Investors should consider the liquidity of the SIP scheme, as some schemes may have restrictions on the frequency and amount of redemptions
- Past Performance: Investors should research the past performance of the SIP scheme, including its returns over different periods and during market cycles. However, past performance should not be the sole criteria for choosing an SIP scheme, as past performance is not indicative of future results.
Investors should carefully consider these factors and features and conduct thorough research before investing in an SIP scheme to ensure that the scheme aligns with their investment objectives and goals.
Advantages of SIP Plans to Invest in 2024
Systematic Investment Plan (SIP) is a popular investment option for investors in India. Some advantages of SIP Plans include:
- Rupee-Cost Averaging: SIP allows for investment in a fixed amount at regular intervals, averaging out the cost of purchasing units and reducing the impact of market volatility
- Discipline: SIP instils a disciplined approach to savings and investment, helping to reach financial goals in the long term
- Convenience: SIP is a convenient investment option as it eliminates the need to time the market and makes it easier to save and invest regularly
- Compounding: SIP allows for the power of compounding to work over the long term, potentially resulting in higher returns
- Affordability: SIP allows for investment in small amounts, making it accessible for individuals with limited funds.
It’s important to consider one’s financial goals, risk tolerance, and investment horizon when choosing an investment option, including SIP plans. It’s recommended to seek the advice of a financial advisor.
FAQs
How do I choose the right SIP plan in 2024?
To choose the right SIP Invest Plan in 2024, you need to consider various factors such as your investment goals, risk appetite, investment horizon and the performance of the fund. You can also seek the advice of a financial advisor or use online tools to compare different SIP plans.
What factors should I consider when selecting an SIP for investment?
When selecting an SIP for investment, you should consider factors such as the fund's past performance, expense ratio, investment objective, asset allocation, and the fund manager's experience. You should also consider your investment goals, risk appetite, and investment horizon.
How has the performance of SIPs changed from 2022 to 2024?
The performance of SIPs may vary from year to year depending on various market factors. It is recommended to review the performance of SIPs regularly and make changes to your investment portfolio if necessary.
What are the tax implications of investing in SIPs in India in 2024?
Investing in SIPs in India may have tax implications such as capital gains tax, dividend distribution tax and securities transaction tax. The tax implications may vary depending on the type of mutual fund and the holding period. It is recommended to consult a Vakilsearch tax professional for accurate and up-to-date information.
How do SIP returns compare with other investment avenues available in 2024?
SIP returns may vary depending on various market factors and the performance of the fund. However, SIPs have the potential to provide higher returns compared to other investment avenues such as fixed deposits and savings accounts
Are there any new SIPs launched in 2024 that investors should be aware of?
There may be new SIPs launched in 2024 that investors should be aware of. It is recommended to stay updated with the latest market trends and consult a financial advisor for advice on new investment opportunities.
How can beginners start investing in SIPs in 2024?
Beginners can start investing in SIPs in 2024 after understanding their investment goals, risk appetite and investment horizon. One can research different SIP plans and compare them based on various factors such as past performance, expense ratio, and investment objective.
What's the difference between SIPs in mutual funds and SIPs in direct stocks?
SIPs in mutual funds involve investing in a diversified portfolio of stocks managed by professionals, while SIPs in direct stocks involve investing in individual stocks directly. SIPs in mutual funds are generally considered less risky and more convenient for retail investors, while SIPs in direct stocks require more research and expertise.
How can I track the performance of my SIP investments?
You can track the performance of your SIP investments by regularly reviewing your investment portfolio and comparing it with the benchmark index. You can also use online tools and mobile apps provided by mutual fund companies to track the performance of your SIP investments.
Is it safe to invest in SIPs during volatile market conditions?
Investing in SIPs during volatile market conditions may involve higher risks, but it can also provide higher returns in the long term. It is recommended to have a diversified investment portfolio and a long-term investment horizon to mitigate the risks associated with volatile market conditions.
How do SIPs in India in 2024 compare with global investment trends?
SIPs in India in 2024 may vary from global investment trends depending on various market factors and economic conditions. However, SIPs in India are generally considered a disciplined manner of investing in mutual funds as they have the potential to provide higher returns in the long term.
What is the average lock-in period for SIPs in 2024?
The lock-in period for SIPs may vary depending on the type of mutual fund and the investment objective. Generally, equity mutual funds have a lock-in period of 3 months - 1 year, while debt mutual funds can even have a zero lock-in period.
Conclusion
One of the most efficient and successful ways to make long-term investments is through a SIP. You can use recurrent expenses to fund your SIP investments if you have any. By coming up with a solid strategy and investing your money occasionally, you may lessen the stress of investment.
You can use this as investment guidance about SIP Plans to Invest in 2024 because it increases at an anticipated rate. Since SIPs only require monthly investments, they are far simpler to handle than lump-sum investments. However, consider your financial objectives and risk tolerance while selecting the best SIP to invest in for greater returns. For much personalised one-on-one financial advice, you can get in touch with our in-house chartered accountants or book a lot with our investment experts.
