Post on 07-Apr-2018
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Systematic Investment Plan (SIP)
HDFC MF SIP is similar to a Recurring Deposit. Every month on a specified date an amountyou choose is invested in a mutual fund scheme of your choice. The dates currently available
for SIPs are the 1st, 5th, 10th, 15th, 20th and the 25th of a month. Youll be amazed to
learn about the many benefits of investing through HDFC MF SIP.
Click Herefor Scheme Wise Details for SIP
Benefit 1
Become A Disciplined Investor
Being disciplined - Its the key to investing success. With the HDFC MF Systematic
Investment Plan you commit an amount of your choice (minimum of Rs. 500 and in multiples
of Rs. 100 thereof*) to be invested every month in one of our schemes.
Think of each SIP payment as laying a brick. One by one, youll see them transform into a
building. Youll see your investments accrue month after month. Its as simple as giving at
least 6 postdated monthly cheques to us for a fixed amount in a scheme of your choice. Itsthe perfect solution for irregular investors.*Minimum amounts may differ for each Scheme. Please refer to SIP Enrolment Form for details.
Benefit 2
Reach Your Financial Goal
Imagine you want to buy a car a year from now, but you dont know where the down-
payment will come from. HDFC MF SIP is a perfect tool for people who have a specific,
future financial requirement. By investing an amount of your choice every month, you can
plan for and meet financial goals, like funds for a childs education, a marriage in the family
or a comfortable postretirement life. The table below illustrates how a little every month can
go a long way.
Monthly Savings - What your savings may generate
Savings per month
(for 15 years)
Total amount invested
(Rs. in Lacs)
Rate of return
6.0% 8.0% 10.0%
(rupees in lacs, 15 years later)*
5000 9.0 14.6 17.4 20.9
4000 7.2 11.7 13.9 16.7
3000 5.4 8.8 10.4 12.5
2000 3.6 5.8 7.0 8.3
1000 1.8 2.9 3.5 4.2
*Monthly instalments, compounded monthly, for a 15-year period.
Disclaimer: The illustrat ion above is merely indicative in nature and should not be construed as investment advice. It does not in any ma nner imply or suggest performance of any HDFC Mut ual Fund Scheme(s). Please read
Risk Factors.
Benefit 3
Take Advantage of Rupee Cost Averaging
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Most investors want to buy stocks when the prices are low and sell them when prices arehigh. But timing the market is timeconsuming and risky. A more successful investment
strategy is to adopt the method called Rupee Cost Averaging. To illustrate this well compareinvesting the identical amounts through a SIP and in one lump sum.
Imagine Suresh invests Rs. 1000 every month in an equity mutual fund scheme starting in
January. His friend, Rajesh, invests Rs. 12000 in one lump sum in the same scheme. Thefollowing table illustrate how their respective investments would have performed from Jan to
Dec:
Sureshs Investment Rajeshs Investment
Month NAV Amount Units Amount Units
Jan-04 9.345 1000 107.0091 12000 1284.1091
Feb-04 9.399 1000 106.3943
Mar-04 8.123 1000 123.1072
Apr-04 8.750 1000 114.2857
May-04 8.012 1000 124.8128
Jun-04 8.925 1000 112.0448
Jul-04 9.102 1000 109.8660
Aug-04 8.310 1000 120.3369
Sep-04 7.568 1000 132.1353
Oct-04 6.462 1000 154.7509
Nov-04 6.931 1000 144.2793
Dec-04 7.600 1000 131.5789
*NAV as on the 10th every month. These are assumed NAVs in a volatile market
Disclaimer: The illustrat ion above is merely indicative in nature and should not be construed as investment advice. It does not in any ma nner imply or suggest performance of any HDFC Mutual Fund Scheme(s). Rupee Cost
Averaging neither ensu res you profits nor protects you from making a loss in declining markets. Pleaseread Risk Factors.
As seen in the table, by investing through SIP, you end up buying more units when the price
is low and fewer units when the price is high. However, over a period of time these marketfluctuations are generally averaged. And the average cost of your investment is often
reduced.
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At the end of the 12 months, Suresh has more units than Rajesh, even though they investedthe same amount. Thats because the average cost of Sureshs units is much lower than that
of Rajesh. Rajesh made only one investment and that too when the per-unit price was high.
Sureshs average unit price = 12000/1480.6012 = Rs. 8.105
Rajeshs average unit price = Rs. 9.345
Benefit 4
Grow Your Investment With Compounded Benefits
It is far better to invest a small amount of money regularly, rather than save up to make one
large investment. This is because while you are saving the lump sum, your savings may not
earn much interest.
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With HDFC MF SIP, each amount you invest grows through compounding benefits as well.
That is, the interest earned on your investment also earns interest. The following exampleillustrates this.
Imagine Neha is 20 years old when she starts working. Every month she saves and invests Rs.
5,000 till she is 25 years old. The total investment made by her over 5 years is Rs. 3lakhs.Arjun also starts working when he is 20 years old. But he doesnt invest monthly. He
gets a large bonus of Rs. 3 lakhs at 25 and decides to invest the entire amount.
Both of them decide not to withdraw these investments till they turn 50. At 50, Nehas
Investments have grown to Rs. 46,68,273* whereas Arjuns investments have grown to Rs.
36,17,084*. Nehas small contributions to a SIP and her decision to start investing earlier
than Arjun have made her wealthier by over Rs. 10 lakhs.
*Figures based on 10% p.a. interest compounded monthly.
Disclaimer: TheThe illustrat ion above is merely indicative in nature and should not be constr ued as investment advice. It does not in any manner imply or suggest performance of any HDFC Mutual Fund Scheme(s). Please
read Risk Factors.
Benefit 5
Do All This Effortlessly
Investing with HDFC MF SIP is easy. Simply give us post-dated cheques or opt for an
Auto Debit from your bank account for an amount of your choice (minimum of Rs. 500 and
in multiples of Rs. 100 thereof*) and well invest the money every month in a fund of your
choice. The plans are completely flexible. You can invest for a minimum of six months, orfor as long as you want. You can also decide to invest quarterly and will need to invest for a
minimum of two quarters.
All you have to do after that is sit back and watch your investments accumulate.
Please refer to the SIP Enrolment Form for terms and conditions before enrolment. *Minimum amounts may differ for each Scheme.