Modern Investment Strategies - SIP, STP, SWP

Modern Investment Strategies for your benefit

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Following the crowd is undoubtedly the worst strategy in every field.

But what is the best we can do with our hard-earned money so that it can increase its own?

Some random intelligent people said, “Invest your money somewhere to get good returns along with time. ” 

Now, “somewhere” is a very broad term to understand.

In this blog, we have focused on some popular investment schemes of Mutual Funds.

These investment strategies include SIP, STP, and SWP.

What is SIP?

A Systematic Investment Plan(SIP) is a highly useful investment strategy for regular, long-term Mutual Funds investment.

You can invest your money either monthly, or quarterly, or annually as per the plan.

SIP also encourages an investment mindset among individuals.

The investors get good returns at the end via the power of compounding.

SIP is generally preferred over equity fund schemes as it increases the facility to utilize the volatility of the market to buy more units and generate returns based on averaging.

Many people prefer SIPs as they help you to achieve your long term goals like child education, child marriage, early age retirement, etc.

That’s why SIPs are also called goal-based investments

Many investors at Captial Tree have shared their experience that they feel a sense of disciple with Systematic investment plans.

They shared that SIPs also helped them in distributing their investment in small chunks rather than a hefty one-time investment load.

The Power of Compounding

A very popular term comes out whenever SIP is mentioned which is the power of compounding.

Compounding is the reinvestment of the investment profit at the identical rate of return to constantly increase the principal amount with time.

This has a noteworthy impact on wealth accumulation, especially with long-term investments.

Some popular SIP schemes which you can pick are:

Investment in Big Companies

  1. Mirae Asset Emerging Bluechip Fund
  2. HDFC Index Sensex Fund

Investment in Multicap Funds

  1. UTI Equity Fund
  2. SBI Focused Equity Fund
  3. Axis Multicap Fund

Investment in High-Risk High-Gain Funds

  1. Kotak Smallcap Fund
  2. Axis Midcap Fund

Invest in World’s Best Companies

  1. Franklin India Feeder – Franklin U.S. Opportunities Fund
  2. ICICI Prudential US Bluechip Equity Fund

If you have any slight mood of investing in a SIP, just feel free to talk to an SIP expert in a single click.

What is SWP?

Opposite to a SIP, the investment strategy with a Systematic Withdrawl Plan(SWP) works for regular withdrawal.

It is a smart way to extract money out of the current investment portfolio either to reinvest in the same portfolio or to meet daily expenses. 

The main advantage of a Systematic Investment Plan is that they are more tax-effective than FDs or any other fix-income investment plan.

SWP helps investors to maintain the liquidity of their Mutual Fund investment as it allows them to fetch money precisely wherever in need. 

The reinvestment factor helps in getting returns over the profit which means additional benefits.

This plan is best for the old age peoples(retirees) to withdraw a fixed amount at regular intervals.

Capital Tree suggests some of the best SWP schemes:

Aggressive Hybrid Funds

  1. HDFC Balanced Advantage Fund
  2. Mirae Asset Hybrid Equity Fund

Conservative Hybrid Funds

  1. ICICI Prudential Regular Savings Fund
  2. Kotak Asset Allocator Fund

Dynamic Asset allocation

  1. ICICI Prudential Balanced Advantage Fund

Capital Tree provides you the best withdrawl plan advice at your fingertip.

What is STP?

“Mutual Funds are subjected to market risks”. This is a very popular phrase which everyone is aware of.

A Systematic Transfer Plan (STP) is one such solution for decreasing your risk factor and maintaining regular investment.

An STP helps investors in distributed their lump-sum investment over an allocated time interval.

This is also an automated method of relocating funds from one mutual fund to another.

This distribution prevents investors from getting stuck in a specific fund at its peak NAV.

Investors earn extra money on their lump sum investment while shifting their funds to equity using this strategy.

This increased the investor safeguard from market volatility and allow them to transfer invested sum as per the market.

For instance, if you invest 50,000 in an equity fund then can park the entire sum in a liquid plan and go for a monthly SIP of 5,000 in an equity plan using any STP scheme.

If you need any kind of assistance regarding mutual funds, SIP schemes, or STP or SWP schemes, just contact the best financial advisor.

Captial Tree expert team is always ready to help you. Please contact us, if you have any kind of query regarding investment and portfolio management.

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