Systematic Investment Plan
Turn your money in to wealth systematically
Systematic Investment Plan (SIP) as an investment mode is getting a lot of attention
from investors. Like most of the investors, you may also have the following queries:
Why should you invest through
What is a SIP? SIPs?
What is the right time to start a How should you select the right
SIP? scheme for SIP?
How to start a SIP through
ICICIdirect.com?
Let us answer these, one by one
What is a SIP?
Systematic Investment Plan
A Systematic Investment Plan (SIP) is an easy and convenient mode of investing fixed amount
automatically at regular intervals in a mutual fund scheme of your choice.
Conceptually SIP is similar to Recurring Deposits (RD), though there are certain differences:
Rate of return is fixed in a RD, while incase of SIP it is market determined.
Investment in a RD may appear safe, however over the long term investments through SIP
have always given higher returns than RD.
Why should you invest through SIPs?
Advantages of investing through a SIP
Disciplined approach of investing Do away with the worry to time the market
It is a regular and disciplined way of investing in Mutual
Easy Funds. Investment through a SIP is
on Pockets:
Get benefit of more time spent in market possible with amounts as low as Rs 1000 per
month.
Let us explain some of the key advantages in details
Why should you invest through SIPs?
Disciplined approach of investing
SIP inculcates discipline in your investments – i.e. it makes you invest regularly. Disciplined approach
in your investments helps in wealth creation over long term.
For example, a monthly SIP of ₹ 5,000 per month growing at 10% p.a., 15% p.a. and 20% p.a. would
grow to:
Principal Final Amount Final Amount Final Amount
Period (in years) Invested (₹ lakhs) (₹ lakhs) (₹ lakhs)
(₹ lakhs) @ 10% p.a. @ 15% p.a. @ 20% p.a.
10 6.00 10.33 13.93 19.12
15 9.00 20.90 33.84 56.71
20 12.00 38.28 75.80 158.07
25 15.00 66.89 164.20 431.34
As shown above, regular and disciplined investments through SIP for long term even with small
amounts helps you to create wealth.
Assumed returns for illustration purposes only, Systematic Investment Plan at beginning of the month.
Why should you invest through SIPs?
Do away with the worry to time the market
In a SIP, you receive more units when price of unit (NAV) is lower and less units when price of unit(NAV)
is higher. Thus average cost per unit while investing through SIP is kept at a lower level. This makes the
need to time the market irrelevant.
35.00 NAV movements of a scheme
30.00
25.00
20.00
15.00 Average Cost per Unit through SIP
10.00
NAV in ₹
5.00 Average Cost per Unit through SIP is always at a lower level as you get
more units at lower NAV and less units at higher NAV.
0.00
Aug-13 Nov-13 Feb-14 May-14 Aug-14 Nov-14 Feb-15 May-15 Aug-15 Nov-15 Feb-16 May-16
As shown above, in a SIP the average cost per unit is kept at a lower level. So, there is no need
of looking continuously for the right level of market to start investing.
NAV is assumed for illustration purpose only, NAV=Net Asset Value of a unit, SIP at beginning of the month
Why should you invest through SIPs?
Get benefit of more time spent in market
With smaller amounts to invest through a SIP, you start investing early thereby giving your
investments more time in the market. This increases the final value of your investments.
75.80 Final Value= ~6.3
times the principal
invested
The longer you stay invested, the more will be final value of your
investments.
Final Value= ~3.8 times
the principal invested
33.84
Final Value=~2.3 times the
principal invested
Final Value=~1.5 times
Amount in ₹ Lakhs
the principal invested 13.93
12.00
9.00 Invested Principal
4.48 6.00
3.00 Final Value
5 Years 10 Years 15 Years 20 Years
₹ 5,000 invested per month growing at 15% per annum
For illustration purposes only. The returns are assumed returns and SIP is at beginning of the period.
What is the right time to start a SIP?
Right time to start a SIP
There is no time like “NOW” to start investing through SIP.
₹ 7.43 crores
Additional amount of ₹ 4.15 crores when you start investing
early though the monthly investment when you start investing
late was higher.
₹ 3.28 crores
Final Value of Investments
from monthly SIP growing
at 15% p.a.
Scenario A: ₹ 5,000 invested monthly Scenario B: ₹10,000 invested monthly
from age of 25 till the age of 60 years from age of 35 till the age of 60 years
As shown above the earlier you start investing through SIP, the more will be your final investment
value. There is no time like “NOW” to start investing.
Assumed returns for illustration purposes only, Systematic Investment Plan investment at beginning of month.
How should you select the right scheme for SIP?
Factors to consider before starting a SIP
SIP in Equity
schemes
3. Decide the duration of should be
investment period ideally for 5
years or more
2. Decide the amount you can Start investing NOW with your
afford to invest every month investible surplus
1. Select the right Mutual Fund You should invest in Equity Mutual Funds as
scheme Equity as an asset class generates higher
returns in the long term
How should you select the right scheme for SIP?
Selecting the right scheme on ICICIdirect.com
Research Recommendations:
Easily select scheme(s) for starting SIP from top-rates schemes recommended by our award-
winning Research after extensive analysis. These recommendations are available on Mutual Funds
Place Order page in the login section.
Choose scheme(s) to start SIP from our recommended “SIP Portfolio” and start your investment
journey.
How should you select the right scheme for SIP?
Majority of our investors prefer to invest in our Research recommended schemes for SIP for long
term wealth creation.
ICICIdirect Research Recommended Equity Schemes for SIP – Average Returns w.r.t. benchmark. Resultant
value from Rs 1,000 invested monthly in Sensex & our recommended equity schemes for SIP
40.00 ~3.7 times the 37.81
Across time-periods, our Research recommended Equity
schemes for SIP have given more returns than Sensex. The final value of
35.00 Sensex
longer the period of investment, more is the out-
30.00 performance by our recommended schemes.
Amount in ₹ Lakhs
~2.0 times the
25.00 final value of
Sensex
20.00
~1.4 times the
~1.2 times the final value of
15.00
final value of Sensex 11.16
Sensex 10.11
10.00
5.63
5.00 2.71
1.93
0.79 0.97
0.00
5 Years 10 Years 15 Years 20 Years
S&P BSE SENSEX Our Recommended SIP Schemes Average
Our Recommended schemes for SIP have consistently out-performed their benchmarks. You
should also start investing through SIP in our Research recommended schemes for long term
wealth creation.
Source: Accord FinTech, ICICIdirect Research, Data as on July 25, 2016
How to start a SIP through ICICIdirect.com?
Click on “Purchase” to
select scheme(s) to Invest.
1
Enter User Id, Password, Date of Birth/PAN, select Mutual
Funds to Start in and click on “Login Now”.
Click on Continue to Invest 3
On Mutual Funds Place Order page select a scheme
from our Research recommendations and click on SIP.
How to start a SIP through ICICIdirect.com?
5 6
Enter SIP details – Frequency,
SIP Period, Start Date and
Installment Amount.
Review the investment details
Provide other mandatory provided, Accept T&C and click on
details and click on Submit “Confirm” to set up your SIP.
What are you waiting for?
Start investing through SIP in
our recommended schemes
now and SIP your way to
wealth creation!!
7
A confirmation message with instructions will be
displayed.
Thank You
