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| Name of the scheme | 1-year back | Invest now | Fund category | expense ratio |
|---|---|---|---|---|
| Axis Nifty 50 Index Fund | +32.80% | Invest now | Equity: Big Cap | 0.12% |
| Axis Nifty 100 Index Fund | +38.59% | Invest now | Equity: Big Cap | 0.21% |
| Axis Nifty Next 50 Index Fund | +71.83% | Invest now | Equity: Big Cap | 0.25% |
| Axis Nifty 500 Index Fund | , | Invest now | Equity: Flexi Cap | 0.10% |
| Axis Nifty Midcap 50 Index Fund | +46.03% | Invest now | Equity: Mid Cap | 0.28% |
One of the most common issues faced by investors when selecting mutual funds is to decide whether to invest through a lump sum amount or through systematic investment schemes (SIP).
Which of the two options can produce high returns? Here we take you through intensive analysis of both these investment routes.
Systematic investment plan or sip
This highly popular investment option offers investors the opportunity to share a certain amount in mutual funds, usually on a monthly basis. SIPS is a good option to manufacture money over time. These are highly recommended for young investors, which are new in the market and have long horizons.
Lump sum
Unlike SIP, investors are required to pay once in a lump sum investment option. Here, investors do not need to pay any subsequent payments.
SIP vs lump sum: How should you invest in mutual funds?
Both SIPs and lump sum investment routes perform separately in different stages of the market. Those who plan to invest in mutual funds should focus more on investment rather than investment strategy and invest only based on their cash flow. Those who are salaried employees are often advised to invest through SIPs as it will not stress their finance. Meanwhile, people with a lump sum for putting in equity markets may consider a lump sum option.
Difference between lump sum and SIP mutual funds
1. investment amount
SIP becomes a suitable option for those who have regular income flow. For example, people who are salaried employees can invest some amount of their monthly income regularly in SIP. However, if you have useless cash, then investing through lump sum is the best option as you will not need to invest extra money from time to time.
2. Financial target
SIPs are tellermade for those who have long -term goals in life to make money, in addition to taking care of children’s education and other expenses. To understand how much the mutual fund will be able to meet your financial goals through SIP option, you can take the help of CNBC TV18 SIP calculator.
But for those who have useless cash in the bank, lump sum investment option in mutual funds is a better option, as it earns you a market -related returns that can be better than the interest earned through savings accounts or other investment options. Is, such as fixed deposits.
Also read This mutual fund has changed ₹ 10,000 monthly SIP to ₹ 3.80 crore in 25 years.
3. Market landscape
In lump sum investment, invested money is subject to market rashes. However, in SIPS you have the opportunity to average the market rapid rapid rash. In addition, SIPs also help you get the benefit of cost average. This means that when the market is below, you get more share units for the same amount.
4. resilience
Market experts believe that SIP has more flexibility than lump sum investment in mutual funds. In SIPS, you can act with a small amount and later extend it over the period of time. But such an option is not available to lump sum investors.
5. Admission obstacles
In SIPS, there is a low entry barrier for investors. But for a lump sum, you need a large initial amount.
Also read KFIN Technologies says that SEBI. 250 SIP initiative will promote retail participation
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