Axis MoneyPlex Knowledge Nugget - 117
Axis Mutual Fund
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SIP – The winning recipe to build wealth
A systematic investment plan is a popular way to invest in mutual funds. Earlier, mutual fund investors could only invest in these market linked schemes by making a one-time lump sum investment. This lumpsum investment had to be made at the beginning of the investment cycle. If you invest in equity mutual funds through lumpsum investment, you are exposing your entire finances to equity market's volatile nature right from the beginning of the investment cycle. Thanks to the introduction of SIP, investors can now invest small amounts at systematic intervals rather than making one time lump sum investment. SIP is nothing but a way to invest your money in mutual fund schemes. After you decide which mutual fund you want to invest in to achieve your short term and long term financial goals you can invest in that particular scheme via a systematic investment plan. In SIP, once you complete a one-time mandate with your bank in which you hold a savings account every month on a fixed date a predetermined amount is debited from your savings account and electronically transferred to the mutual fund. Not everyone is able to determine the exact amount they need to invest in mutual funds via SIP. If you too are uncertain about how much money you need to invest in order to achieve the desired corpus you can refer to an online SIP calculator.
How can SIP help investors build wealth?
Investments in mutual funds via sip are known for wealth creation over the long term. But how does one achieve long-term capital appreciation by investing in mutual funds by SIP. Here are some of the factors that make a sip an ideal way to invest in mutual funds to fulfill or to achieve life long-term financial goals:
SIP may inculcate the discipline of saving
With SIP, once you allow auto-debits, every month on the fixed date a predetermined amount is debited from a savings account and electronically transferred to the mutual fund. This way you are allocating a fixed amount to your mutual fund investments at regular intervals. In order to achieve success in once financial journey they need to inculcate the discipline of regular investing. Starting a mutual fund SIP can be one way to achieve that success.
SIP allows small investments for bigger dreams
Long term goals like retirement planning, or securing your children's future require one to accumulate a corpus worth Rs. 25 lakhs to Rs. 30 lakhs. To achieve this large corpus one needs to invest systematically at regular intervals. SIP allows investors to invest small amounts at periodic intervals. But this small investment amount cannot be less than the minimum investment amount mentioned in the offer document. To achieve life's bigger goals, small and regular SIP investments may prove to be beneficial.
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Statutory Details:?Axis Mutual Fund has been established as a Trust under the Indian Trust Act 1882, sponsored by Axis Bank Ltd. (liability restricted to ?1 Lakh).?Trustee:?Axis Mutual Fund Trustee Ltd.?Investment Manager:?Axis Asset Management Co. Ltd. (the AMC)?Risk Factors:?Axis Bank Ltd. Is not liable or responsible for any loss or shortfall resulting from the operation of the scheme.
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.