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SYSTEMATIC INVESTMENT PLAN[SIP]

R.S.KUMARGuided By :Mrs. Indumathi

A mutual fund is a trust that pools the

savings of a number of investors who share a

common financial goal. The money thus

collected is then invested in capital market

securities or instruments such as shares,

debentures and other securities.

WHAT IS A MUTUAL FUND ?

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Investors

Fund Manager

Securities

Returns

POOL THEIR MONEY WITH

INVEST INGENERATE

S

PASSED BACK TO

TYPES OF MUTUAL FUNDS :- Schemes according to maturity period :

Open-Ended Fund Scheme

Close-Ended Fund Scheme

Schemes according to investment objective :

Growth

Income

Balance

Money

Tax savings

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NATURE OF RISK :NATURE OF RISK(WITH COLOUR CODE)

CATEGORIES OF FUND

Low Risk : Money Market Funds

Growth funds

Moderate Risk : Income Funds

Short-term Plans

Balanced Funds

High Risk Funds : Index Funds

Sectoral Funds

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WHAT IS SIP ? It is an investment strategy where an

investor invests a fixed amount in a fund at

a stipulated periodic interval.

It can be made daily, weekly, monthly or

quarterly.

It is a financial planning tool that allows you

to invest in mutual funds through small and

periodic installments.

Moreover you can also select the tenure of

your investments.

It helps you to set aside a fixed amount

every month for investments thus

contributing towards your financial goals.

Mr. Salman is a businessman. He is married to Tina, who is

a homemaker. He has a son and daughter, both are in

school.

Over next couple of years, he desires to follow a savings

plan to build wealth for his children’s education/marriage

and buy a bigger house.

In order to hedge against uncertainties of business , he has

been regularly investing in fixed income instruments.

The lower interest rates over the years have been worrying

him.

He decides to take the help of Yash Kumar, Financial

Advisor.

After carefully evaluating his financial goals and time

required to achieve his financial goals, he advises him to

invest in Mutual Funds through SIP.

For following reasons….

LET’S TAKE AN EXAMPLE…..

SIMPLE TO INVEST

LOW ACQUISITION COSTS

DISCIPLINED INVESTMENT

SUPERIOR RETURNS

HELPS IN COMPOUNDING YOUR WEALTH

CONTINUED…..

CONTINUIED…..

However, SALMAN is not comfortable investing into mutual

funds as they are volatile ; therefore risky and avoidable.

Yash Kumar advises SALMAN to register for Systematic

Investment Plan and make use of volatility in the market

rather than get worried and avoid investing in Mutual Funds.

SALMAN is not clear as to how Systematic Investment Plan will

work to his advantage and requests him for more details.

Yash Kumar explains him with an example, which is as

follows….

CONTINUED…

Rahul & Viru are two friends. Rahul decides

to invest Rs. 1000/- per month using SIP

whereas Viru decides to make lump-sum

investment of Rs. 12000.

Go to Example

CONCLUSION :

From the above EXAMPLE we can understand that :-

A SIP method of investment is better than the LUMP-SUM

investment.

When markets are high you buy less units, but when markets

are low you buy more units.

SIP is truly small on savings but big on benefits.

Disciplined

Convenient

THE FOUR STEPS TO POTENTIAL WEALTH CREATION THROUGH SIP

Select a mutual fund Scheme of your choice

• Step 1

Select the amount you can afford to invest every

month

• Step 2

Decide on the

frequency with which

you will invest

• Step 3

Decide the length of the investment

period

• Step 4

My SIP Calculator

My SIP Calculator

Take Me To Calculate

My SIP Calculator is very easy to access and understand.

Any common man could easily make out the difference.

The calculator consists following features :

It can be applied to any fund scheme.

It generate a positive Return On Investment(ROI).

It calculates the Net Present Value(NPV).

It displays a graphical chart on every calculation.

RISK FACTOR :

There is no guarantee that every SIP will always produce

a profit.

Please consult your financial advisor before investing.

THANK YOU