Investing is necessary for today’s environment and if you do not know how to invest directly, there are mutual funds and other instruments such as SmallCase. Using a SIP method i.e. a Systematic Investment Plan can assure you above-average returns as you take emotions out of the picture. This article helps you find the best SIP Plan for the next 5 years.
What is a SIP?
Unlike what normal people think of ‘SIP’, it is a systematic process of buying any instrument. When you buy Mutual Funds NAV with a fixed capital every month – it is a SIP.
If you buy a particular stock every month with a fixed capital – it is a SIP.
Best SIP plans for the next 5 years
This list is not based on past performance but rather on the future prospects of the industry.
ICICI Prudential Technology Direct Plan-Growth
A SIP in this fund for the next 5 years will provide you with superior returns because Technology is the Future. Our dependence on tech has increased dramatically and is going to increase further – this means that tech companies will benefit and this fund will benefit from tech companies.
Over the past 5 years, the fund has given 350% returns.
Speciality Chemicals SmallCase
As mentioned, an SIP is not limited to Mutual Funds, it extends to any financial instrument. A Speciality Chemicals SmallCase is available that has given 22.5% returns in 5 years!
This theme has been selected because of the rising demand in India and the additional rise of Speciality Chemicals to cater to that demand or even as a China +1 opportunity that is still playing out.
Nasdaq 100 FOF
This one is quite special and would have been the top pick had there not been issues with respect to taxation.
Like the NIFTY and the SENSEX, the USA has an index called the NASDAQ which comprises tech stocks. Indians who wish to invest there can use this Fund Of Fund. US Tech companies dominate the world and are likely to grow even bigger.
A FOF is a fund that invests in another fund and because this is mechanical in nature – you have a very low expense ratio.
Mirae Asset Healthcare Fund – Growth
India has an aspiring middle class and poor infrastructure, particularly in Healthcare. This fund aims to benefit from the rise in Healthcare infrastructure this country is about to witness.
The fund invests in hospitals, diagnostics, specialty chemicals, medical equipment, insurance, and other allied sub-sectors.
The past 5 year returns of the fund have been sub-par but the future looks extremely promising.
IDFC Infrastructure Fund
This is a rather risky bet that can make or break a portfolio so we would like to advise the investors to use extra caution here. If possible, make this just 5-10% of your portfolio.
This fund invests in Indian Real Estate. The rationale behind this is the same as Healthcare – the demanding middle class wants a better standard of living and the direct beneficiaries of that are Real Estate Companies. This fund benefits from the beneficiaries.
The problem however is that the ‘CAPEX cycle’ is tough to predict, even for economists which means that real estate might underperform for a long period of time. However, whenever the cycle picks up – this is likely to be amongst the top-performing funds.
Do note that the Best SIP plan suits your needs, these are the ones that show the potential of delivering the maximum returns.
Disclaimer: the views expressed by the writer are their own and not of the website or the management. The writers may or may not have a stake in the mentioned instruments. Readers are requested to consult a SEBI registered investment advisor and make a decision accordingly.