Best SIP Plan for 1 Year

What is a Systematic Investment Plan (SIP)?

A Systematic Investment Plan (SIP) is a strategy that allows investors to invest a fixed sum of money at regular intervals in mutual funds, rather than investing a lump sum amount at once. This disciplined approach helps individuals stay consistent with their savings and investment goals while benefiting from market fluctuations. 

Key features of SIPs for 1 year include —

1. Regular Investments: SIPs encourage monthly or periodic investments, making them easier to manage compared to large, one-time investments.
2. Rupee Cost Averaging: By investing regularly, you buy more units when prices are low and fewer units when prices are high, which helps in reducing the overall cost of investment.
3. Flexibility: SIPs allow investors to start with small amounts and scale their investments according to their financial capacity.
4. Compounding Growth: Regular investments grow over time. This benefits from compounding, which can significantly boost the value of your investment.

8 Best SIP Plans for 1 Year

Here are some of the best SIP to invest for 1 year horizon, offering a range of risk levels and potential returns —

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Overview of SIP Investment Plans for 1 Year

1. PGIM India Midcap Opportunities Fund Direct-Growth

• Type: Mid-Cap Fund
• Risk: Very High
• Investment Focus: Primarily invests in mid-cap stocks with some exposure to large and small-cap stocks
• Suitability: Ideal for investors seeking high returns over the next 3-4 years and are comfortable with moderate risks
• Minimum SIP: Rs. 1,000 (AED 43)*
• Exit Load: 0.5% if redeemed within 90 days
• Fund Manager: PGIM India
• Objective: Long-term capital appreciation through equity investments in mid-cap companies

2. Nippon India Small Cap Fund Direct-Growth

• Type: Small Cap Fund
• Risk: Very High
• Investment Focus: Focuses heavily on small-cap stocks with high growth potential.
• Suitability: Best for investors looking for very high returns and willing to take on higher risk for the potential of greater gains
• Minimum SIP: Rs. 5,000 (AED 215)*
• Exit Load: No exit load, but long-term commitment is advised for maximum benefit
• Fund Manager: Samir Rachh
• Inception: Sep 2010
• Objective: Focus on high-growth small-cap stocks that could become mid-caps in the future
   

3. Aditya Birla Sun Life Money Manager Fund

• Type: Money Market Fund
• Risk: Low
• Investment Focus: Invests in short-term debt and money market instruments
• Suitability: Ideal for investors looking for safe, short-term investments with higher returns than traditional savings accounts
• Minimum SIP: Rs. 1,000 (AED 43)*
• Exit Load: None
• Objective: Generate regular income through investments in money market instruments with low interest rate risk
   

4. Baroda BNP Paribas Credit Risk Fund - Direct Plan-Growth

• Type: Credit Risk Fund
• Risk: Moderately High
• Investment Focus: Invests in debt and money market instruments across the credit spectrum
• Suitability: Best for those who prefer relatively lower risk than equities but are willing to take some credit risk for better returns
• Minimum SIP: Rs. 500 (AED 22)*
• Exit Load: 1% for redemptions within 1 year
• Objective: Generate returns by investing in high-quality debt instruments with some exposure to credit risk

5. ICICI Prudential Pharma Healthcare and Diagnostics (P.H.D) Fund Direct-Growth

• Type: Sectoral/Thematic Fund
• Risk: Very High
• Investment Focus: Invests in pharma, healthcare, diagnostics, and related sectors
• Suitability: Suitable for experienced investors who want to take a tactical approach to invest in high-growth sectors like healthcare
• Minimum SIP: Rs. 100 (AED 4.3)*
• Exit Load: 1% if redeemed within 15 days
• Objective: Capital appreciation through equity investments in the pharma and healthcare sectors
   

6. Bandhan Small Cap Fund Direct-Growth

• Type: Small Cap Fund
• Risk: Very High
• Investment Focus: Primarily invests in small-cap stocks, aiming for high growth.
• Suitability: Best for investors who are willing to accept higher risks for potentially higher returns over 3-4 years
• Minimum SIP: Rs. 100 (AED 4.3)*
• Exit Load: 1% if redeemed within 1 year
• Fund Manager: Anoop Bhaskar
• Objective: To generate long-term capital appreciation by investing in small-cap stocks with strong growth potential
   

7. DSP Bond Fund - Direct Plan-Growth

• Type: Medium Duration Debt Fund
• Risk: Low to Moderate
• Investment Focus: Invests in high-quality debt instruments, focusing on medium-duration bonds
• Suitability: Ideal for conservative investors seeking reasonable returns with lower risk than equity investments
• Minimum SIP: Rs. 100 (AED 4.3)*
• Exit Load: None
• Objective: Provides attractive returns while managing risk through high-quality debt instruments

8. HDFC Overnight Fund - Direct-Growth

• Type: Overnight Fund
• Risk: Very Low
• Investment Focus: Invests in overnight money market instruments
• Suitability: Perfect for investors looking for a very short-term investment with high liquidity and minimal risk
• Minimum SIP: Rs. 100 (AED 4.3)*
• Exit Load: None
• Objective: Generate returns in line with overnight call rates while maintaining high safety and liquidity

Note: *AED to INR exchange rates are subject to change

Things to Consider for 1 Year SIP Plan

• Liquidity: Choose funds that allow easy access to your money in case you need it urgently
• Historical returns: Look for funds with consistent and good returns over the past year to set realistic expectations
• Stability: Opt for funds that have shown consistent performance, avoiding those with extreme ups and downs
• Fund category: For a 1-year SIP plan, debt funds or liquid funds are generally safer, as they carry lower risk than equity funds
• Fund manager experience: A skilled fund manager can help provide more stable returns, even in volatile markets
• Expense ratio: Lower expense ratios mean you keep more of your returns

Key Factors for Choosing the Right 1-Year SIP Plan

To choose the best SIP investment plan for 1 year, consider the following —

• Fund objective: Make sure the fund's goal matches yours, such as focusing on preserving capital or offering liquidity
• Risk profile: For short-term investments, go for low-risk options like debt funds
• Past performance: While past results aren’t guaranteed, funds with stable returns over the past year are usually more reliable
• Expense ratio: A lower expense ratio generally results in better net returns
• Exit load: Check if the fund charges a penalty for early withdrawal, as this can affect your returns
• Fund size: Larger funds tend to offer better stability and liquidity
• Fund manager’s track record: A manager with a strong history of managing similar short-term funds can help ensure better results

Note: When investing in small-cap or actively managed funds, the expense ratio may be higher. However, a high expense ratio doesn't automatically mean the fund is a bad investment. It’s just one of the many factors to consider, alongside other important aspects like performance and management.

Frequently Asked Questions