MUTUAL FUNDS

RETAIL RESEARCH

18 May 2016

MF SIP baskets
Prologue: Systematic investment plan (SIP) is a disciplined way of investing in mutual funds enabling the investors making regular and equal payments at regular intervals for periods to
accumulate wealth over long run. An SIP is a planned approach towards investments and helps you inculcate the habit of saving and building wealth for the future.
Schemes for investors with varying risk profiles:
Category

Scheme Name

Aggressive
Sector/Theme Funds
Equity-Large Cap Funds
Equity-Mid & Small cap
Funds
Equity-Multi Cap Funds
Equity Balanced Funds
MIP - LT

Franklin Build India Fund

ICICI Pru Banking & Fin Serv Fund
UTI-Transportation & Logistics Fund
Birla Sun Life Frontline Equity Fund
Franklin India Prima Plus
DSP BR Micro-Cap Fund
Franklin India Smaller Companies Fund
ICICI Pru Value Discovery Fund
Franklin India High Growth Companies
HDFC Balanced Fund
Tata Balanced Fund
Reliance Monthly Income Plan
HDFC Monthly Income Plan - LTP

20%
20%
35%

Allocation
into Equity
(%) in
Scheme's
Portfolio
92
94
90
96
96
95
92
91
85
66
71
19
23

49%

Type of Investor
(as per the Risk profile)
Moderate

Conservative

10%
10%
10%
25%

15%

25%
25%
20%
30%
10%
15%
30%

Allocation into Equity in

94%
67%
each baskets
Note: NAV value as on 03 May 2016. Portfolio data as on Mar 2016. Source: ACEMF & NAVIndia.

Market Capitalisation
Break-up in Equity PF (%)

67
65
59
87
75
1
17
70
64
44
51
13
16

Mid &
Small-cap
24
28
31
9
18
94
75
20
18
22
21
6
7

67

24

Large-cap

Lump-sum
Returns (%) (Point
to Point)
3 Year
5 Year
CAGR
CAGR
28.22
19.33
16.15
13.91
39.02
26.34
16.11
12.58
21.27
14.81
40.53
23.24
35.23
23.19
25.83
17.79
24.85
16.92
20.13
14.12
19.16
15.01
10.26
9.77
10.26
9.29
-

SIP Returns
(%) (XIRR)

standard
deviation
(Annualised)

3 Year

5 Year

24.42
14.33
31.27
11.98
17.82
37.65
29.56
21.05
19.06
15.62
15.26
10.11
9.78

24.63
16.77
31.74
14.98
18.23
31.59
29.67
22.30
21.41
16.38
16.88
10.33
10.03

20.88
24.42
22.04
16.55
15.16
20.73
18.64
18.75
18.47
13.31
14.00
6.33
7.86

Rationale and importance of Systematic investing:

Lump sum investing or investing in one go is suitable only when you have sufficient resources and there is a high degree of certainty that the market is in a rising trend. In
practice, equity markets are volatile in nature and prediction is very difficult. If the investor may panics and withdraw the lumpsum invested amount it could lead to a sizeable
loss.
In the case of systematic investment (SIP), the investor can accumulate small amounts and invest regularly. An SIP also enables investors to start investing in equity early.
The strategy behind starting a SIP with an equity scheme is to go on investing regardless of the market conditions. Investors have to keep SIP running for a longer period and do
not stop it in downturns. Else, he will lose out a chance to make money in the long term if he stops SIP midway when the market corrects temporarily.
Features of SIP:

Simple and disciplined approach towards investment. Investment possible with small sum of money invested regularly to accumulate wealth.
Based on concept of Rupee Cost Averaging.
Flexibility in terms of amount or quantity based SIP. Flexible intervals like Daily/ Weekly/ Fortnightly/ Monthly/ Yearly basis.

Benefits of investing through SIP:

Reduces risk because of Rupee Cost Averaging. Timing the market is not necessary.
SIP can be started with very small amount of money.
Long term financial goal can be aligned with SIP. Disciplined approach towards Investment helps in controlling the emotions.

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Disclaimer: Mutual Funds investments are subject to risk. Past performance is no guarantee for future performance.This document has been prepared by HDFC Securities Limited and is meant for sole use by the recipient and not for circulation. This document is not to be reported or
copied or made available to others. It should not be considered to be taken as an offer to sell or a solicitation to buy any security. The information contained herein is from sources believed reliable. We do not represent that it is accurate or complete and it should not be relied upon as
such. We may have from time to time positions or options on, and buy and sell securities referred to herein. We may from time to time solicit from, or perform investment banking, or other services for, any company mentioned in this document. This report is intended for non-Institutional
Clients.
This report has been prepared by the Retail Research team of HDFC Securities Ltd. The views, opinions, estimates, ratings, target price, entry prices and/or other parameters mentioned in this document may or may not match or may be contrary with those of the other Research teams
(Institutional, PCG) of HDFC Securities Ltd. HDFC Securities Ltd. is a SEBI Registered Research Analyst having registration no. INH000002475.

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