The Systematic Investment Plan (SIP) is a kind of investment in which the investor selects a mutual fund based on their preferences and invests a certain amount of money in that mutual fund on a regular basis. With a Systematic Investment Plan, investments are made incrementally rather than all at once.
The long-term performance of Kotak’s Flexicap fund has been remarkable. Returns on a monthly SIP of Rs 10,000 in this equities mutual fund have averaged triple digits in percentage terms. The initial investment of Rs 15.90 lakh in this MF programme has increased to over Rs 46 lakh over the course of 13 years.
It has been reported that the Kotak Flexicap Fund is India’s biggest open-ended equity fund. This MF scheme, which has been around since September 2009, has survived and even thrived through the likes of the Eurozone Crisis, Quantitative Tightening, Demonetisation, Covid, etc.
According to Livemint, Kotak Mutual Fund data shows that an initial investment of Rs 1 lakh in the Kotak Flexicap Fund at its inception in 2009 has grown to a current value of Rs 5.6 lakh.
However, the plan demonstrates why SIPs provide superior returns compared to alternative investment vehicles. Value of investors’ initial Rs 10,000 monthly SIP in Kotak FlexiCap Fund has grown to Rs 45.84 lakh. A one-time investment of Rs 1 lakh yields a compound annual growth rate of 13.9%, while a monthly SIP of Rs 10,000 yields a CAGR of 14.8%.
Mutual funds often provide SIPs, or structured investment plans, through which investors may set aside money regularly to put toward many mutual fund schemes. Investing in a systematic way like a SIP may be very helpful and disciplined.