The 5 Best SIPs to Start in 2022 – Top Performing Mutual Fund SIPs in 2022

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The 5 Best SIPs to Start in 2022 – Top Performing Mutual Fund SIPs in 2022.
 

What if we tell you that you can easily create a corpus of Rs 3.5 crore by investing Rs 10,000 every month in the best (SIPs) Systematic Investment Plans? You would probably think that we are insane and write this off as another marketing gimmick. But no one believes it until it is actually done.

By investing Rs 10,000 every month in the best SIPs, you can easily accumulate a corpus of Rs 3.5 crore, assuming a conservative return of 12% CAGR for a period of 30 years. Increase your SIP amount to Rs 15,000, and your corpus would be worth a mammoth Rs 5.29 crore, assuming the same 12% compounded return over a period of 30 years. This is the power of starting small with the best SIPs.

Now retail investors often underestimate the power of small beginnings. Case in point is the majestic pyramid of Egypt. For years, and even today, humans cannot comprehend that men without the latest tools and technology could build this engineering marvel with their bare hands. So, we put forth absurd theories that aliens built the pyramids and that accumulating a corpus worth crores is not for mortal retail investors. Like the aliens, we believe that a corpus worth crores of rupees can be attained only by the ultra-rich investors. But this cannot be further from the truth.

Every investor, however small, can create a mammoth corpus by investing in the best SIPs. In fact, SIPs have acted as a great leveller and bridged the gap between common retail investors and High Networth Investors (HNIs). You see, prior to systematic investment plans, retail investors were always a step behind...

  • Firstly, they could not afford to invest a lump-sum amount in equities

  • Even if they somehow managed the finances, they certainly did not have the research-backed conviction to invest a lump-sum in equities as they did not have research analysts and industry experts on their payrolls

  • And if they could somehow manage to cross these two hurdles, they would most probably falter in the emotional aspect as investing a lump-sum meant timing the market

This is where the best SIPs are a real game changer. Mutual fund SIPs have solved all the major hurdles faced by retail investors -

  • Investors no longer had to worry about lump-sum investing. They could hold a stake in India's top companies with as little as Rs 100 per month

  • Investors were spared the tedious research as mutual funds are managed by expert fund managers who take day-to-day investment decisions, ensuring peace of mind for retail investors

  • The most significant benefit of SIPs is the fact that it is devoid of emotions. Irrespective of the market valuations, your SIP debits on the same date every month or as per the chosen frequency and is invested in an equity fund without any delays or hassles

[Must Read: Download PersonalFN's MoneySimplified Guide: SIP: A Rewarding Strategy]

Now, there is no denying that SIPs have been life-changing for retail investors. And evidence suggests that retail investors have also welcomed SIPs with open arms. The graph below shows the growing popularity of SIPs in India.

Chart 1: Growing Popularity of SIPs in India

Graph 1
(Source: AMFI)
 

As per the AMFI, the total mutual fund SIP accounts stood at a staggering 5.05 crores in 2022. Additionally, in January 2022, the Indian mutual fund industry collected a total of Rs 11,517 crore via SIPs. So, it is safe to say that retail investors prefer SIP over any other mode of investment in India.

And SIPs have done well on their part with the exceptional returns that they have generated. One of the funds listed in PersonalFN's recommended best SIPs in 2022 has generated an XIRR return of 30.60% in the last one year and 49.40% in the last three years (as of 11th February 2022). Let me present this information in actual monetary terms so that you can grasp the gravity of the returns generated by our recommended best SIPs.

Let us assume that 5 years back, on 11th February 2017, you had started a SIP of Rs 5,000 in Kotak Small Cap Fund - Direct-Growth, which is one of the best SIPs in 2022. Over the course of the five years, your total investment is Rs 3.05 Lakhs, whereas your corpus (as calculated on 11th February 2022) is worth Rs 6,41,327 at an XIRR of 30.60%.

Table 1: Corpus Accumulated via a SIP of Rs 5,000 in Kotak Small Cap Fund

NAV Date NAV Cumulative Units Cumulative Invested Amount Market Value
13-02-17 68.276 73.2322 5,000 5,000
14-03-17 69.413 145.2648 10,000 10,083
11-04-17 75.002 211.9297 15,000 15,895
11-05-17 77.38 276.5459 20,000 21,399
12-06-17 77.506 341.057 25,000 26,434
11-07-17 78.136 405.048 30,000 31,649
11-08-17 74.613 472.0605 35,000 35,222
11-09-17 78.234 535.9713 40,000 41,931
11-10-17 79.173 599.1241 45,000 47,434
13-11-17 81.392 660.5552 50,000 53,764
11-12-17 85.419 719.0902 55,000 61,424
11-01-18 90.76 774.1805 60,000 70,265
12-02-18 85.921 832.3735 65,000 71,518
12-03-18 82.737 892.806 70,000 73,868
11-04-18 86.426 950.659 75,000 82,162
11-05-18 86.651 1,008.36 80,000 87,376
11-06-18 82.781 1,068.76 85,000 88,473
11-07-18 79.878 1,131.36 90,000 90,371
13-08-18 79.516 1,194.24 95,000 94,961
11-09-18 79.571 1,257.07 1,00,000 1,00,027
11-10-18 69.937 1,328.57 1,05,000 92,916
12-11-18 72.237 1,397.78 1,10,000 1,00,972
11-12-18 71.649 1,467.57 1,15,000 1,05,150
11-01-19 73.585 1,535.52 1,20,000 1,12,991
11-02-19 69.594 1,607.36 1,25,000 1,11,863
11-03-19 75.952 1,673.19 1,30,000 1,27,082
11-04-19 77.123 1,738.03 1,35,000 1,34,042
13-05-19 72.471 1,807.02 1,40,000 1,30,956
11-06-19 78.028 1,871.10 1,45,000 1,45,998
11-07-19 75.456 1,937.36 1,50,000 1,46,186
13-08-19 69.302 2,009.51 1,55,000 1,39,263
11-09-19 72.446 2,078.53 1,60,000 1,50,581
11-10-19 74.496 2,145.64 1,65,000 1,59,842
11-11-19 77.703 2,209.99 1,70,000 1,71,723
11-12-19 77.045 2,274.89 1,75,000 1,75,269
13-01-20 83.139 2,335.03 1,80,000 1,94,132
11-02-20 87.858 2,391.94 1,85,000 2,10,151
11-03-20 77.501 2,456.45 1,90,000 1,90,378
13-04-20 58.932 2,541.30 1,95,000 1,49,764
11-05-20 60.478 2,623.97 2,00,000 1,58,693
11-06-20 67.168 2,698.41 2,05,000 1,81,247
13-07-20 72.475 2,767.40 2,10,000 2,00,567
11-08-20 79.291 2,830.46 2,15,000 2,24,430
11-09-20 84.66 2,889.52 2,20,000 2,44,627
12-10-20 87.578 2,946.61 2,25,000 2,58,058
11-11-20 93.105 3,000.32 2,30,000 2,79,344
11-12-20 105.164 3,047.86 2,35,000 3,20,525
11-01-21 114.892 3,091.38 2,40,000 3,55,175
11-02-21 124.959 3,131.39 2,45,000 3,91,296
12-03-21 133.684 3,168.79 2,50,000 4,23,617
12-04-21 130.712 3,207.05 2,55,000 4,19,199
11-05-21 140.291 3,242.69 2,60,000 4,54,920
11-06-21 153.362 3,275.29 2,65,000 5,02,305
12-07-21 160.74 3,306.40 2,70,000 5,31,470
11-08-21 163.232 3,337.03 2,75,000 5,44,710
13-09-21 176.802 3,365.31 2,80,000 5,94,993
11-10-21 186.434 3,392.13 2,85,000 6,32,408
11-11-21 189.796 3,418.47 2,90,000 6,48,812
13-12-21 188.759 3,444.96 2,95,000 6,50,267
11-01-22 192.625 3,470.92 3,00,000 6,68,585
11-02-22 183.331 3,498.19 3,05,000 6,41,327
(Source: ACE MF, PersonalFN Research)
Data as on 11th February 2022
 

With our recommended best SIP, you would have potentially doubled your investment in a span of five years. Now, apart from the obvious benefit of higher returns, you have also benefitted from the following, via SIPs:

  • You managed to get more units every time the market was down. For example, the same SIP amount of Rs 5,000 managed to get you 84.84 units on 13th April 2020, against the 25.95 units received on 11th January 2022. This is exactly how rupee cost averaging works, and in the end, you end up reducing your overall cost per unit.

  • The SIP continued in a disciplined manner irrespective of your moods and emotions. This helped you persevere through bull and bear market cycles without letting your emotions get the better of you.

  • You did not have to track the market on an hourly or daily basis to decide the right time for investment like investors do with lumpsum investing. Despite the market being up, down, or sideways, your SIPs continued, creating a much-needed investment discipline.

[Read More: Should You Opt For Daily SIPs In Mutual Funds? Know Here]

With all these benefits of SIP on offer, let us now look at the 5 best SIPs to invest in 2022. We have included one fund from each category - large-cap, large and midcap, Flexi cap, midcap, and small-cap. So, if you are planning to build a long-term portfolio, then this list of best SIPs to invest in 2022 may be as comprehensive as it can get.

5 Best SIPs to Invest in 2022

 

Best SIP to invest in 2022, Scheme #1

Canara Robeco Bluechip Equity Fund: Our first scheme for the best SIPs to invest in 2022 comes from the ever-so-reliable large-cap category - Canara Robeco Bluechip Equity Fund.

The fund is an underdog in the large-cap category, as evident from a paltry AUM of Rs 6,020 crore (as on 31st January 2022), but this hasn't impacted its performance as the fund has managed to generate a decent CAGR of 14.35% in the last one year, as of 16th February 2022. The fund also features in our list of best SIPs to invest in 2022 on the basis of the 5.29% alpha generated over its benchmark S&P BSE 100 TRI as of 16th February 2022.

Canara Robeco Bluechip Equity Fund (CRBEF) currently holds a total of 48 stocks with a 95.80% equity and 4.20% cash allocation. The fund is invested 93.91% in large-cap stocks and 6.09% in midcap stocks, which is below the category average of 10.01%. So, the fund is a conservative large-cap fund and apt for conservative investors with a short to the medium-term investment horizon.

The graph below shows the SIP returns generated by Canara Robeco Bluechip Equity Fund across the short-term (3 years) and long term (5-7 years).

Chart 2: SIP Returns Generated by Canara Robeco Bluechip Equity Fund

Graph 2
(Source: ACE MF, PersonalFN Research)
Data as on 11th February 2022
 

A SIP of Rs 5,000 in Canara Robeco Bluechip Equity Fund has generated the following corpus -

Table 2: Future Value of SIP of Rs 5,000 in Canara Robeco Bluechip Equity Fund

Total Investment via SIPs Current Value of SIPs SIP Period
Rs 60,000 Rs 62,972 1 year
Rs 1,80,000 Rs 2,56,715 3 years
Rs 3,00,000 Rs 4,90,175 5 years
Rs 4,20,000 Rs 7,97,533 7 years
(Source: ACE MF, PersonalFN Research)
Data as on 16th February 2022
 

As you can see, by simply investing Rs 5,000 every month for 5 years, you would have been able to create a corpus of Rs 4.90 Lakhs at a XIRR of 20.32%.

[Read More: Download this exclusive guide on the best large cap mutual funds in 2022]

Best SIP to invest in 2022, Scheme #2

Mirae Asset Emerging Bluechip Fund: This fund makes it to our list of best SIPs to invest in 2022 due to its consistently steady performance over the last three, five, and seven years. Mirae Asset Emerging Bluechip Fund is a leader in the large and midcap fund category and has generated a compounded return of 19.74% against a benchmark return of 16% in the last one year as of 16th February 2022.

The fund has a mammoth AUM of Rs 22,097 crore (as of 31st January 2022) and held a total of 69 stocks with 58.93% investment in large-cap stocks, 38.83% in midcap stocks, and 2.23% in small-cap stocks. The fund has also managed to create an alpha of 5.20% over its benchmark S&P BSE Large Midcap TRI as of 16th February 2022.

The graph below shows the SIP returns generated by Mirae Asset Emerging Bluechip Fund across the short-term (3 years) and long term (5-7 years).

Chart 3: SIP Returns Generated by Mirae Asset Emerging Bluechip Fund

Graph 3
(Source: ACE MF, PersonalFN Research)
Data as on 11th February 2022
 

Let us look at how a SIP in Mirae Asset Emerging Bluechip Fund has fared in the last one, three, five, and seven years.

Table 3: Future Value of SIP of Rs 5,000 in Mirae Asset Emerging Bluechip Fund

Total Investment via SIPs Current Value of SIPs SIP Period
Rs 60,000 Rs 63,055 1 year
Rs 1,80,000 Rs 2,75,687 3 years
Rs 3,00,000 Rs 5,21,960 5 years
Rs 4,20,000 Rs 9,00,021 7 years
(Source: ACE MF, PersonalFN Research)
Data as on 16th February 2022
 

A SIP of Rs 5,000 every month over the course of seven years would have fetched you a corpus of Rs 9 Lakhs at a 21.83% XIRR, and this is leaps ahead of the corpus generated by large-cap mutual funds. So, if you are a moderately conservative investor and can tolerate a minor 20-25% exposure to midcap stocks, then you may consider starting a SIP in large and midcap funds instead of pure large-cap funds.

Best SIP to invest in 2022, Scheme #3

UTI Flexi Cap Fund: Let us now move away from the safety of large-cap funds and into slightly risky waters with Flexi cap mutual funds. A Flexi cap mutual fund is free to invest across market capitalisation - large, mid, and small-cap stocks. So, it gives you the best of the broader stock market universe, albeit with a higher risk. So, if you are a moderately aggressive investor with a long-term investment horizon of, say more than five years, then you should start a SIP in UTI Flexi Cap Fund.

UTI Flexi Cap Fund is one of the giants in the Flexi cap space with a massive AUM of Rs 24,638 crore as of 31st January 2022. It has generated a CAGR of 18.21% in the last five years against a benchmark (S&P BSE 500 TRI) return of 15.66% as of 16th February 2022. The fund has managed to generate an alpha of 4.70% (as of 16th February 2022), which is one of the best in the Flexicap space.

The fund held 63 stocks with 63.01% allocation to large-cap stocks, 32.28% to midcap stocks, and 4.71% in small-cap stocks. The fund is currently bullish on the midcap segment with a 32.28% allocation against an average category allocation of 21.40%.

The graph below shows the SIP returns generated by the UTI Flexi Cap Fund across the short-term (3 years) and long term (5-7 years).

Chart 4: SIP Returns Generated by UTI Flexi Cap Fund

Graph 4
(Source: ACE MF, PersonalFN Research)
Data as on 11th February 2022
 

A SIP of Rs 5,000 in UTI Flexi Cap Fund has generated the following corpus over the years -

Table 4: Future Value of SIP of Rs 5,000 in UTI Flexi Cap Fund

Total Investment via SIPs Current Value of SIPs SIP Period
Rs 60,000 Rs 60,814 1 year
Rs 1,80,000 Rs 2,62,660 3 years
Rs 3,00,000 Rs 4,96,596 5 years
Rs 4,20,000 Rs 7,96,176 7 years
(Source: ACE MF, PersonalFN Research)
Data as on 16th February 2022
 

Now don't be disheartened by the substandard returns generated by the fund in the last one year. Flexi cap funds are not for the short-term or the faint-hearted. You need patience when investing in Flexi cap funds and hence invest in UTI Flexi Cap Fund only if your investment horizon is more than seven years.

[Read More: Here's Why Investing in Equities Through Flexi-cap Funds Makes Sense Now]

 

Best SIP to invest in 2022, Scheme #4

Axis Midcap Fund: Starting a SIP in the midcap category is one of the best things you can do for your portfolio. This is because the mid and the small-cap categories face the most volatility, so you enjoy higher rupee-cost-averaging. Since your investment horizon is also long-term, you get to enjoy the power of compounding as well.

Our shortlisted best SIP to invest in 2022 from the midcap category is none other than the midcap giant Axis Midcap Fund. The fund has the second-highest AUM in the midcap space at Rs 16,754 crore (as of 31st January 2022), which is second only to the AUM of Kotak Emerging Equity Fund, which is a colossal Rs 17,756 crore (as of 31st January 2022).

Axis Midcap Fund currently invests in a total of 61 stocks with 40.06% allocation to large-cap stocks, 59.80% to midcap stocks, and 0.13% to small-cap stocks. The fund has generated a CAGR of 21.56% in the last five years (as of 16th February 2022) against a category average of 15.92%. The fund's alpha of 6.64% is one of the best in the Indian mutual fund space.

The graph below shows the SIP returns generated by Axis Midcap Fund across the short-term (3 years) and long term (5-7 years).

Chart 5: SIP Returns Generated by Axis Midcap Fund

Graph 5
(Source: ACE MF, PersonalFN Research)
Data as on 11th February 2022
 

A SIP of Rs 5,000 in Axis Midcap Fund has generated the following corpus over the years -

Table 5: Future Value of SIP of Rs 5,000 in Axis Midcap Fund

Total Investment via SIPs Current Value of SIPs SIP Period
Rs 60,000 Rs 62,161 1 year
Rs 1,80,000 Rs 2,68,874 3 years
Rs 3,00,000 Rs 5,23,477 5 years
Rs 4,20,000 Rs 8,62,753 7 years
(Source: ACE MF, PersonalFN Research)
Data as on 16th February 2022
 

Notice the pattern here....as we moved from safer to riskier mutual funds, the returns in the last one-year have gone down. But the returns in the long-term have increased. This is why when you are starting a SIP in a midcap fund, always ensure two things - firstly, you do not panic by looking at the last six months or one-year returns, and secondly, you stay invested in the fund for the long-term to reap its true benefits.

[Read More: Will Mid-cap and Small-cap Funds Continue to Outperform Large-cap Funds in 2022 as Omicron Cases Rise?]

Best SIP to invest in 2022, Scheme #5

Kotak Small Cap Fund: Now this best SIP in 2022 isn't for the faint-hearted or those who crumble under pressure. Small cap investing is tricky and requires excruciatingly high patience. So, start a SIP in Kotak Small Cap Fund only if you can stay invested in the fund for a minimum of seven to ten years.

In a period of 7 years, Kotak Small Cap Fund has beaten its benchmark S&P BSE 250 Small-Cap TRI by a huge margin. Honestly, the fund has crushed its benchmark. As on 16th February 2022, Kotak Small Cap Fund has generated a compounded return of 19.30% against a benchmark return of 12.08% and a category average of 16.28%. The fund has also managed to generate an alpha of 10.80% as of 16th February 2022. The fund currently invests in 70 stocks with 2.39% allocation to large-cap stocks, 55.58% to midcap stocks, and 42.02% to small-cap stocks.

The graph below shows the SIP returns generated by Kotak Small Cap Fund across the short-term (3 years) and long term (5-7 years).

Chart 6: SIP Returns Generated by Kotak Small Cap Fund

Graph 6
(Source: ACE MF, PersonalFN Research)
Data as on 11th February 2022
 

A SIP of Rs 5,000 in Kotak Small Cap Fund would have generated the following corpus over the years -

Table 6: Future Value of SIP of Rs 5,000 in Kotak Small Cap Fund

Total Investment via SIPs Current Value of SIPs SIP Period
Rs 60,000 Rs 65,936 1 year
Rs 1,80,000 Rs 3,40,351 3 years
Rs 3,00,000 Rs 6,15,389 5 years
Rs 4,20,000 Rs 9,97,644 7 years
(Source: ACE MF, PersonalFN Research)
Data as on 16th February 2022
 

Notice that a simple SIP of Rs 5,000 in Kotak Small Cap Fund could have helped you create a corpus of Rs 9.97 lakhs, which is more than double in a span of seven years! This is the magic of a SIP in small-cap funds.

This concludes our discussion on the 5 best SIPs to invest in 2022. Now there is no denying that SIPs are a sure-shot way of achieving your financial goals. And since we have already shared the list of the best SIPs in 2022, the only thing left to do, is for you to start investing in these best SIPs with India's most trusted financial website, PersonalFN. Invest in direct plans of these best mutual fund schemes and enjoy the benefits of long-term wealth creation.

If you wish to have super compressive and detailed research reports on schemes mentioned in the list of the best SIPs to invest in 2022 and other diversified equity mutual funds to invest in, subscribe to PersonalFN's premium research service, FundSelect.

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Warm Regards
PersonalFN Content & Research Team

 

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