Most investors are aware of the basic concept of Mutual Funds. It is the creation of a diversified portfolio for attaining maximum gains at lowest risks.
Mutual fund returns as compared to fixed and savings deposits are not controlled by RBI regimen and are as such subject to market volatilities, yet being managed funds the very criteria to perform and rank high among investor preference is actually the invisible hand that makes them make wealth for the investors far more than RBI controlled deposits.
Yes, Mutual funds have been performing quite well since quite many years now and are yielding high returns for the investor and several mutual fund schemes provide tax benefits too. Most mutual funds now offer lump sum investment option as well as SIP-based investment option. SIP is short for systematic investment plan requiring periodic investments starting from a minimum of Rs 1000 a month.
How to Identify the Top Three SIPs?
While investors would do wise to take a look at the ratings of the rating agencies like CRISIL and take into account the criteria on which the rankings have been given to the mutual fund’s category wise, yet in this article let’s tackle the problem from a different angle.
Let us take into account the top three fund managers as per the most recent industry ratings (mid-2017)* based on who could create the most wealth for investors and the funds that they have been associated with. That would definitely clue up the investors regarding how to identify the top funds and choose among them those plans that can be applied for through SIP mode.
No 1 Fund Manager
The top slot in recent fund manager ranking with respect to maximum wealth creation for investors has gone to Neelesh Surana who manages Mirae Assets Global investments having an experience of over 19 years, asset-weighted return of 26 % (five years) and AUM Rs. 2282 crores (5-year average). Funds managed by the fund manager include Mirae Asset Emerging Bluechip (32.82 % five year returns) and Mirae Asset India Opp.
No. 2 Fund Manager
The second in rank among the list of top wealth creating fund manager is R Janakiraman of Franklin Templeton Mutual Fund having experience of over 19 years, 25.5% asset-weighted return (5 years) and AUM of Rs 7333 crores (5-year average). Funds managed by the fund manager include Franklin India Opportunities (19.92 5 yr returns), Franklin India Prime (27.88 5 yr returns) and Franklin India Smaller Companies (31.79 % five-year returns).
No. 3 Fund Manager
The third-ranking fund manager is Sohini Andani of SBI Mutual Fund with an experience of over 21 years, 22.61 % weighted asset return (5 yr period) and Rs 4824 crores AUM (5 yr average). Funds managed by her include SBI Blue chip (20.95 % five yr returns) and SBI Magnum Midcap (29.19% five yr returns).
Others among the top
Other fund managers within the top ten include names of Chirag Setalvad (HDFC mutual fund) Vinit Sambre (DSP Black Rock mutual fund), Roshni Jain (Franklin Templeton Mutual Fund), Aditya Garg (Birla Sun Life Mutual Fund), S Krishnakumar (Sundaram Mutual Fund), Pankaj Tibrewal (Kotak Mutual Fund), Mrinal Singh (ICICI Prudential Mutual Fund).
How to Choose a SIP?
SIP investment mode is recommended for the cautious investor and investors who are foraying into equity markets for the first time. While everyone would like to select the fund managed by top-ranking fund manager yet they need to match the offer and the managers wealth creation platform with their own preferences and consider a broad horizon of at least ten top-performing managers and their funds as the fund choice offered by the top fund manager may not suit the current preferences of several investors.
SBI, HDFC and ICICI are the prominent three names providing good SIP-based plans, but other funds also need to be taken a look. While subscribing to them, investors need to review the eligibility criteria and their own preferences.
Investors have differential preferences and their assessment parameters fall under the following general categories:
While being informed about industry rankings is definitely essential for the wise investor, yet top three SIP mutual fund choice may vary due to differential preferences of investors. Good SIP investment calls for consistency in identifying and moving on to the best-suited plan and avoiding premature closures due to panic triggered by market undulations. A good enough return is around 12-15 % (annual) and anything unless substantially below base rates is nothing to panic about.