8/6/2019 Systematic Investment Plan A

1/4

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

8/6/2019 Systematic Investment Plan A

2/4

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.

8/6/2019 Systematic Investment Plan A

3/4

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.

8/6/2019 Systematic Investment Plan A

4/4

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.