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A Systematic Investment Plan (SIP) is generally known to be one of the best ways to invest in mutual funds. The reason? SIPs combine the power of compounding and time while being flexible and convenient.
Compounding means that the existing returns are reinvested to earn more returns. Add time to the mix, say 50 years, and you’ll notice that even a ₹10,000 SIP can compound into a profit of ₹16,59,15,044 at 10% returns.
However, the magic sauce lies in choosing the right SIPs even if you’re investing for 50 years. That’s why we’ve put together a list of the best SIP mutual funds that can generate lucrative returns over the long term. You can consult a Cube Wealth Coach or download the Cube Wealth App.
This list will answer the question of which SIP is best for 50 years. Broadly speaking, debt funds and liquid funds may not be the ideal investment for the long term because they’re generally recommended for 0-3 years.
That’s why this list of the best SIPs for 50 years will primarily consist of equity funds like large-cap funds, ELSS funds, and international funds, which are known to generate potentially high returns over the long term.
A large-cap mutual fund primarily invests in large-cap stocks like Reliance Industries, Infosys, HDFC Bank, and others. Large-cap companies are generally known for their stable and consistent performance.
Mid-cap stocks that their namesake mutual funds invest in are known to be relatively less stable than large-cap stocks. However, they have the potential to grow into industry leaders and move to the large-cap category.
Small-cap funds invest in small-cap stocks that are budding companies banking on future success. They are generally volatile but have the potential to generate better returns than midcap and large-cap stocks.
Hey! We’ve covered the reasons why small-cap and mid-cap funds have been soaring recently in this blog.
A flexi-cap mutual fund has the flexibility to invest in stocks from different market caps. These funds are known to generate returns that are on par with large-cap funds as they primarily invest in large-cap stocks.
International funds invest in foreign stocks of companies like Microsoft, Google, Tesla, and others. There’s no special process to invest in international funds. You can invest in them just like any other mutual fund.
An Equity Linked Saving Scheme (ELSS) fund carries a lock-in of 3 years and allows you to save up to ₹46,800 in tax under Section 80C. It primarily invests in large-cap stocks.
There are two ways to start a SIP in mutual funds online. The first way would include investment apps that make it easier for you to start a SIP with a quick onboarding flow. You’ll have to:
AMCs that handle mutual funds also allow you to start a SIP with them. That’s the second way. You’ll have to fill in the prerequisites like the KYC information and pick mutual funds offered by the AMC to start a SIP.
Want to know more about starting a SIP? Click here
Let's face it, a lot can change over the course of 50 years since it is, after all, a really long time. The fund house, fund manager, fund's stock holdings, and more can change. You can consult a Cube Wealth Coach or download the Cube Wealth App.
Thus, it is important to get your portfolio analysed at least once a year to ensure your funds are still top notch. You can check out how it works by clicking on the "Free Tools" section up above.
A SIP calculator like the one Cube gives you access to will make it easier for you to visualize how much wealth you can generate in 50 years. Follow these steps to get started with the SIP Calculator for 50 years:
It’s that simple. Test it out for yourself here:
Ans. There is no one-size-fits-all SIP for individuals of a specific age. The choice of SIP depends on various factors, including financial goals, risk tolerance, and investment horizon. A SIP for a 50-year-old should align with their specific financial needs and objectives.
Ans. When selecting a SIP, a 50-year-old should consider factors such as their retirement goals, risk tolerance, current financial situation, and the investment horizon. Diversification, asset allocation, and the choice of mutual funds are also essential considerations.
Ans. While there are no SIPs explicitly designed for retirement, there are mutual fund schemes suitable for long-term wealth accumulation and retirement planning. Investors can choose equity mutual funds or hybrid funds based on their retirement objectives.
Ans. It's never too late to start a SIP. While starting early has advantages, a SIP can still be a valuable tool for building wealth and achieving financial goals, including retirement, even if you begin at the age of 50.
Selecting the best SIP for a 50-year-old individual involves a thoughtful evaluation of their unique financial circumstances and objectives. There is no one-size-fits-all answer, as the choice of SIP should be personalized to align with the investor's goals and risk tolerance.
SIPs offer a systematic and disciplined way to invest, and they can be an effective tool for accumulating wealth and planning for retirement. While there are no SIPs explicitly designed for retirement, there are mutual fund schemes well-suited for long-term wealth creation, and investors can choose from a variety of options based on their financial needs.
Note:
Facts & figures are true as of 26-10-2021. The funds mentioned are suggestions based on funds handpicked by Cube's expert Mutual Fund Advisory partner. Before investing please take Cube's Portfolio Planner feature to ensure the funds you see are right for your goals, life stage, risk level and finances. None of the information shared here is to be construed as investment advice.
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