Mutual Fund Investing Tips to Maximise Your SIP Returns

Business Desk | October 29, 2024

Investing in mutual funds through a systematic investment plan (SIP) is a popular approach for disciplined wealth building. Here are key tips to maximise your SIP returns and make the most of this investment avenue.

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Stick to your SIPs, even during market fluctuations, to build a larger corpus over time.

Start Early, Stay Consistent

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As your income grows, aim to increase your SIP contributions. Even small increments can significantly impact long-term wealth.

Step-up SIP

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SIPs work best when continued through various market cycles, as downturns allow you to buy more units at lower prices, potentially enhancing future returns.

Avoid the Urge to Stop During Downturns

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Expense ratios, or the fees charged by fund houses for managing the fund, can affect your returns.

Monitor Fund Expense Ratios

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SIP calculators are especially helpful in visualising how incremental investments or changes in duration could affect your investment goals.

Use SIP Calculators for Planning

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For long-term goals, equity mutual funds often generate better returns, while debt funds are more stable and suitable for conservative investors.

Choose the Right Fund Based on Goals

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Track your SIP performance, and if the fund underperforms consistently, consider switching.

Review Periodically

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Don’t just pick funds based on recent high returns. Look at factors like fund history, asset management style, and consistency.

Focus on Fund Quality

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Moneycontrol advises users to check with certified experts before taking any investment decisions.

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