SBI SIP - Top SBI Mutual Fund Schemes for SIP Investment

SBI Mutual Fund is known as one of the top performing fund houses in India run by the State Bank of India. SBI Mutual Fund AMC is one of the best asset management companies which offer an array of mutual fund schemes and investment services across different categories of debt, equity, and hybrid to a wide range of investors across the country. Recently SBI mutual fund has come up with one of the simplest and most popular options of investment in mutual funds through systematic investment plan (SIP). SBI SIP plans provide an opportunity to the investors, even those who are new in the market to invest a small amount of money per month for a fixed period of time and gain high returns on investment. SBI SIP plans help investors to create a financial cushion so that they can achieve their long-term and short-term financial goals of life.

Importance of SIP plan

Most of the smart investors set an investment target for themselves in order to deal with the future inflation rate, potential future income, and present income. The various different factors that result to achieve the investment target vary from individual to individual depending on their present needs and future as well.

An SBI SIP plan is not only beneficial for fulfilling long-term financial goals like retirement planning but it also a lucrative investment option for those who want to fulfill short-term financial goals of life like marriage, down payment of a house, the child’s higher education, etc. Moreover, with a systematic approach towards investment, SBI SIP plans help the individual to achieve their financial objectives of life with an ease.

How does SBI SIP Mutual Fund work?

The concept of SIP is the same as banks recurring deposits. While investing through SBI SIP plan a fixed sum of amount is debited from the account of the investor on the monthly, weekly or yearly basis and is invested in the fund options of their choice. It is important to keep in mind that even though the investment amount of an individual will remain unchanged, the number of units bought will vary from one installment to another as the net asset value (NAV) of the fund chosen will change daily.

As per the investors choice, they can increase or decrease the tenure of systematic investment plan depending on the type of scheme they are investing in. SBI SIP mutual fund offers a minimum investment limit of Rs.500, whereas there is no limit on the maximum investment on SIP. In order to start investing in SBI SIP mutual fund also need to set up their ECS mandate or submit the postpaid cheque at distributor/fund house representative office.

Benefits of Investing in SBI SIP Mutual fund AMC

1: Inculcate Disciplined Investments

SBI SIP mutual fund helps investors to set a financial target for the long term and short term and invest accordingly to the fund option of their own choice to achieve their investment goals. One of the major reasons behind this is because SIP offers a disciplined method of investment where the individual has to invest a fixed amount periodically in the chosen fund. As SBI SIP is not confined to any fixed amount of investment one can gain maximum profit on their investment. SBI Mutual Fund SIP results in the advanced long-term option of investment as compared to options of regular investments.

2: Provides the Advantage of Rupee Cost Averaging

With the fluctuations of the market, the price of SBI SIP mutual fund invested by the investors changes on daily basis. However, as the invested amount in SIP is fixed, the investors can purchase more number of units when the price of a market share is low and lesser units when the price of a market share is high with the benefit of rupee cost averaging.  For example, let’s presume that an individual invests Rs.1000 per month in SIP. At the time of the first installment of SIP, the price of the unit is Rs. 5.  So one can make a purchase of 200 mutual fund units.  Suppose, if the price of the unit escalates to Rs.10 at the time of the second installment of SIP,  therefore, the individuals can buy 100 units of the same fund. So, with a total sum of 300 units, the investors can avail high returns on investment.

3: Flexible Tenure of Investment

SBI SIP mutual fund schemes provide the flexibility to the investors to choose the term of investment according to their own suitability and requirement. One can start investing in SBI mutual fund scheme with a minimum term period of 6 months and can choose the maximum tenure according to their own needs.  Moreover, SBI SIP mutual fund also provides the facility to decrease or increase the term period of SIP investment as per the set investment target or due to any other requirements. Apart from this, the SIP schemes offered by SBI also offers the benefit of changing the tenure of SBI SIP investment.

4: Provides Flexibility of Investment Amount

SBI SIP offers a minimum investment limit of Rs.500 and there is no upper limit on the maximum investment. Moreover, the investors can also invest in one or more than one SIP scheme at the same time and can also decrease or increase the investment amount according to their own requirement and choice. The flexible amount of investment helps investors to invest in SBI Mutual Fund SIP scheme in a simple and easy way.

5: Offers Long-Term Investment Benefit

If one starts investing in SIP plan at an early stage of life then they can avail the benefit of the power of compounding.  The basic amount together with dividend /interest invested every year helps to multiply the money much quickly and offers a lucrative return on investment over a long-term period. Moreover, in the systematic investment plan, the investment is majorly done in equity and instruments related to equity which is considered as a best long-term investment option. With a long-term investment objective, the money invested in SIP always has a possibility to overcome the fluctuations of the market and provides long-term capital appreciation to the investors.

Top Performing SBI Mutual Fund Schemes for SIP Investment

SBI offers an array of mutual funds schemes to cater to the various investment requirements of the individuals. The investors can avail guaranteed return on investment whether they invest through the process of systematic investment plan or through the method of lump sum payment.  Here are the top performing equity funds offered by SBI SIP Mutual Fund AMC in which the investors can invest in order to accumulate wealth and gain long-term investment return.

In order to help our customers understand in a much better way, we have provided a tabular comparison of the below mentioned SBI SIP mutual funds across various categories.

In order to give an appropriate illustration, each SBI SIP investment amount is fixed as Rs.2000 per month or Rs.24,000 yearly. The opening date of SIP for the purpose of calculation is taken as 1st August 2016 and the end date is taken as July 2017.  The amount provided on maturity is based on the net asset value of the fund. The returns offered by SBI SIP are evaluated on basis of each fund’s past data of the regular plan and does not guarantee the future performance.

Fund Name

1 Year Return

3 Years Returns

5 years Returns

SBI Blue Chip Fund

9.75%

13%

21.68%

SBI Short Term Debt Fund

4.17%

7.19%

8.28%

SBI Small and Midcap Fund

20.93%

21.91%

37.45%

SBI Magnum Multi-cap Fund  

10.84%

15.56%

24.88%

SBI ETF Nifty Next 50 Fund

12.13%

17.25%

N/A

SBI Magnum Tax Gain Fund  

7.46%

9.99%

19.97%

SBI Contra Fund

6.08%

10.53%

18.48%

SBI Magnum Children’s Benefit Plan

11.17%

15.46%

18.52%

SBI Equity Hybrid Fund

0.1%

10.3%

16.9%

SBI Debt Hybrid Fund

-1.4%

7.4%

10.1%

SBI Infrastructure Fund

-12.9%

8.2%

14.8%

SBI Focused Equity Fund

1.6%

12.4%

20.4%

 

1: SBI Blue Chip Fund

SBI Blue Chip Fund is equity open-ended fund which the main objective to provide investors with long-term capital appreciation by making an investment in large-cap equity stocks. SBI Blue Chip Fund has a great track record and is rated as number one in its category by Crisil. The fund has been continuously outperforming in the market and has offered a return of 7% in last one year and 14% in the last three years. This scheme is best suited for individuals who want to gain long-term return and has a high-risk appetite.

2: SBI Short Term Debt Fund

SBI Short Term Debt Fund is an open-ended debt scheme which aims to provide investors with an opportunity to gain regular income by making investments in portfolio predominantly comprising of debt instruments.  This scheme does not invest equity. It is important to keep in mind that being a debt fund one cannot get the superlative returns and the returns are based on the interest rate in the economy move. The scheme majorly invests in debt and debt-related securities and provides risk-adjusted returns to its investors through interest rate risk in its portfolio and active management of credit risk.   

3: SBI Small and Midcap Fund

This is an open-ended equity fund that aims at providing long-term capital returns to the investors. The scheme predominantly invests in equity and equity-related securities of mid cap and small cap fund. With a high return on investment, the scheme is outperforming in the past 3-5 years. SBI Small and Midcap Fund includes moderate risk and is most beneficial for investors who have moderate to high-risk appetite and wants to gain high returns on investment over a long-term period.

4: SBI Magnum Multi-cap Fund

This is an open-ended equity scheme in which the majority of the amount is invested in equities and equity related instruments. The 50-90% of the fund is invested in large-cap fund whereas 10-40% of the fund is invested in the mid-cap fund. This fund is managed by Anup Upadhyay and is most suitable for investors who have a high-risk appetite. SBI Magnum Multi-cap fund is beneficial for an investor who wants to create a balance between related investment risk and potentially high growth.

5: SBI ETF Nifty Next 50 Fund

This is an open ended large cap equity scheme which major objective is to offers return which closely corresponds to the total return of equity securities as characterized by the underlying index. In this fund option, the investment is majorly done in equities and equity related instruments. Investing in this scheme through a systematic investment plan helps the investors to make a profitable gain in long-term especially at the time of market bull runs. With a profitable return on investment, this fund option is best for investment for those who want to deal the market fluctuations and gain long-term capital appreciation.

6: SBI Magnum Tax Gain Fund

SBI Magnum tax gain fund is an open-ended scheme which aims to provide capital appreciation through investment in bonds, equities, fully convertible debentures, and cumulative convertible preferences. Moreover, along with the benefit of investing in equity related instrument the fund also provides a tax rebate to the investors under section 80C of the Income Tax Act.  This scheme comes with a lock-in period of 3 years and is beneficial for investors who have a low-risk appetite and those who want to gain long-term investment returns along with the tax benefit.

7: SBI Contra Fund

This is an open-ended equity scheme which the main objective is to provide the investors with long-term capital gain by making an investment in a diverse portfolio of equity schemes and equity related instruments. This fund option is best suited for investors who want to seek consistent growth on their investment over a long-term period. SBI contra fund is managed by Dinesh Balachandran.

8: SBI Magnum Children’s Benefit plan

This is a hybrid debt oriented open-ended fund which allows investing in both equity and debt instrument. The main objective of the scheme is to provide an opportunity to the investors to gain regular income predominantly by making an investment in the debt instrument, equity instrument and wealth creation through investment in the equity portfolio.  This fund option is beneficial for those investors who want to generate profitable returns by dynamically managed investment portfolio.

9: SBI Equity Hybrid Fund

SBI equity hybrid fund is a balanced fund offered by SBI Mutual Fun. This fund option aims to create capital growth by making investment in balanced portfolio of debt and equity securities. SBI equity hybrid fund involves lower risk and carries 1% exit load. As compared to the benchmark index, the fund is performing well in the past 3-5 years.

10: SBI Debt Hybrid Fund

SBI debt hybrid fund was previously known as SBI Magnum Monthly Income Plan. This fund option aims to provide regular income to the investors by making capital investment in equity, debt and money market instruments. SBI Debt Hybrid Fund involves moderate risk and carries 1% exit load. This fund option is beneficial for investors who have a moderate risk appetite and wants to avail regular income.

11: SBI Infrastructure Fund

SBI Infrastructure Fund aims to provide long term capital growth to the investors by making investment in equity securities of companies which indirectly or directly involved in infrastructure growth in the country. SBI infrastructure fund involved moderate risk and carries 1% exit load.

12: SBI Focused Equity Fund

This fund option majorly aims to invest in startup business themes, majorly based on outsourcing, export and global opportunities. SBI infrastructure fund involved moderate risk and carries 1% exit load. One can start investing in SBI Focused equity Fund with a minimum investment of Rs.500.