Systematic Investment Plan

Simple, time-honored strategy for

disciplined investors
 Ways Of Investment

One Time Outright Payment

Periodic Payments
 One Time Outright Payment

If you invest directly in the fund, you just hand over the cheque
and you get your fund units depending on the value of the units
on that particular day.

Example:

If one wants to invest Rs 60,000. All you have to do is approach the

fund and buy units worth Rs 60,000.
 Periodic Payments (SIP)

It means every month, you commit to investing,

say, Rs 5,000 in your fund. At the end of a year, you
would have invested Rs 60,000 in your fund.
 The Power of SIP

Higher the rate of return, higher the wealth created

Longer the time period more the wealth created

The more you earn makes a difference

5
Why choose SIP?
SIP offers distinct advantages over conventional
investments by offering the following benefits

Gives the investor an option to investment in asset

classes that beats inflation

Exponential growth through compounding

Lower average purchase cost of assets

Investment at lower risk

Low investment amount

 Why SIP
1. Power of Compounding
2. Rupee Cost Averaging
3. Convenience
 The Power of Compounding

Rs. 10000 saved every year for 30 years invested at 6%, 8%, 10%
and 15% every year

60
Investment

49.99 Lacs
(Rs. Lacs)

50
Value of

40
30 18.09 Lacs
20 12.24 Lacs
8.38 Lacs
10
0
6 8 10 15
Returns (%)
Higher the returns from the invested amount, greater
the benefit accrued due to the power of compounding
Lower average purchase cost
SIP allows one to invest a fixed amount at periodic
intervals irrespective of market performance

Gives investors an opportunity to buy more units when

the price is low and fewer units when the price is high

Reduces the negative impact of price volatility by using a

concept called Rupee Cost Averaging

Enables averaging out your investments at less than

prevailing market rates
Lower average purchase cost
That means that, every month, you commit to investing,
say, Rs 1,000 in your fund. At the end of a year, you would
have invested Rs 12,000 in your fund.
Example
The NAV on the day you invest in the first month is Rs 20; you
will get 50 units.
The next month, the NAV is Rs 25. You will get 40 units.
The following month, the NAV is Rs 18. You will get 55.56
units.
So, after three months, you would have 145.56 units. On an
average, you would have paid around Rs 21 per unit. This is
because, when the NAV is high, you get fewer units per Rs
1,000. When the NAV falls, you get more units per Rs 1,000.
Summing Up :
You buy more when the market is down

You buy less when the market is up

Over time the market fluctuations are

averaged

Most likely you will realize a saving on

the cost per unit

This leads to HIGHER RETURNS

 Convenience

Less Burden
Lower Investment
Auto Debit
Time Saving
Flexibility