The mutual fund industry is experiencing a historic surge in investor participation, with assets under management (AUM) reaching an all-time high of Rs 46.63 trillion in August 2023.
Systematic investment plans (SIP) have become the blue-eyed boy of retail mutual fund investors. Of course there is reason for that.
It is not only lighter on your pocket, but also offers other compelling reasons for investment.
With SIPs, investors can systematically invest small amounts at regular intervals, fostering financial discipline and consistency. This approach not only promotes a habit of saving and investing, but also helps in rupee cost averaging. By investing a fixed amount regularly, investors buy more units when prices are low, and fewer units when prices are high. Over time, this strategy can potentially lower the average cost of investment, leading to higher returns in the long run.
Data from the Association of Mutual Funds of India (Amfi) suggests that Indians are increasingly taking to mutual funds to invest in the equity market, and SIPs are playing a major role in this. August 2023 saw an addition of more than 3.5 million new SIP accounts, 3,591,650 to be precise, the highest ever, bringing the total number of SIP accounts to an all-time high of 69,685,946 as against 68,052,826 in July.
The SIP inflow for the month of August was also recorded at an all-time high of Rs. 15,813.54 crore, Amfi said in a press statement. The SIP AUM stood at Rs. 8,47,130.87 crore as compared to Rs. 8,32,274.61 crore in July 2023.
But even as we talk about SIPs, the crux of the matter remains: which are the best funds to invest in?
Also Read: India’s Top Five Large-Cap Mutual Funds
Such questions become particularly relevant when there is a significant deviation in the performance of schemes within a single category.
For example, in the large-cap category, the best performer has delivered a return of 15.13 per cent, while the lowest return stands at 9.93 percent over a five-year period.
A similar scenario can be observed in other categories.
In the mid-cap category, the best performer has delivered a remarkable 24. 13 per cent return, while the lowest return stands at 13.99 per cent over a five-year period as on October 03, 2023. If you are also grappling with the same question, which is the best funds to invest in 2023, we have the solution.
To get a detailed answer to all these, read our issue (India’s Best Mutual Funds 2023).