My experiences with SIP

As anticipated I got a lot of comments and feedback on the previous post on SIP. In this day when everything is ruled by numbers, it will probably make sense for me to illustrate some of my assertions with numbers. Note that all of the below figures are from my own experiences with SIP. I have tried to cover different market situations, so that one can see how the SIP investment has performed over these situations. Fortunately, all of these investments are still my assets so it is possible to see how these have grown over the years.

Birla Sunlife Frontline Equity – @ 5000 Rs, November 2009 to November 2011

  • NAV in November 2009 was 77 Rs, it went up to 93.5 Rs by October 2010 and dropped to 75.7 Rs by November 2011.
  • Corresponding Nifty figures were 5201, 6029 and 4802 respectively. As the fund in question is mainly a large cap fund the correlation of Nifty levels with NAV is fairly strong.
  • Average NAV was 81 Rs and present NAV is 168 Rs.
  • The investment has given an IRR of 17 % between November 2009 and now.
  • In this case, the SIP route worked out well as the market fluctuated quite a bit during the SIP period.

Dsp Blackrock Micro cap fund – @ 5000 Rs, November 2010 to November 2013

  • NAV in November 2010 was 16.7 Rs and it did not really change significantly over the period.
  • Correlation with the small cap index was reasonably strong.
  • Average NAV was 15.22 Rs and present NAV is 42.26 Rs.
  • The investment has given an IRR of 36.33 % between November 2010 and now.
  • In this case, the SIP route could have been improved upon in a sideways market. It would have been a better idea to increase the SIP amount as the prolonged sideways market indicated a possible strong up move.

HDFC Mid-cap opportunities fund – @5000 Rs, November 2011 to November 2013

  • NAV fluctuated between 15 through 19 Rs in this period.
  • Correlation with the mid cap index was reasonably strong.
  • Average NAV was 16.75 Rs and present NAV is 38.45 Rs.
  • The investment has given an IRR of 36.91 % in this duration.
  • Fluctuations were reasonable so a plain vanilla SIP would not have been the best bet in this case.

Dsp Blackrock Micro cap fund ( Direct) – @ 5000 Rs, November 2013 onward

  • NAV in November 2013 was 17.6 Rs and it has gone up to 42.35 Rs in July 2015.
  • Correlation with the small cap index is reasonably strong.
  • Average NAV was 28.35 Rs and present NAV is 42.26 Rs.
  • The investment has given an IRR of nearly 45 % between November 2013 and now.
  • In this case, the SIP route could have been improved upon greatly in a strongly rising market. It would have been a better idea to decrease the SIP amount and use the money for other investments.

.ICICI Value Discovery fund ( Direct ) – @ 5000 Rs , November 2013 onward

  • NAV in November 2013 was 58.59 Rs and it has gone up to 117 Rs in July 2015.
  • NAV has practically remained stagnant in the last 6 months.
  • Average NAV was 87.22 Rs and present NAV is 120 Rs.
  • The investment has given an IRR of nearly 42.5 % between November 2013 and now.
  • In this case, the SIP route could have been improved upon greatly in a strongly rising market. It would have been a better idea to decrease the SIP amount and use the money for other investments. When the NAV was seen to stagnate the amount of investment should have been increased.

I can give more examples but I think the above gives a good idea that plain Vanilla SIP is probably not the best way to go ahead with your investments. I will write in the next post of some strategies that can be adopted in different situations.

Will be keen to receive comments and feedback from my readers on this post.

Interested readers may pls follow my blog on email by clicking on the relevant button on the right hand panel. I will shortly be stopping the practice of posting the links in different Facebook groups. Following the blog will ensure you get intimated whenever there is a new post.

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10 thoughts on “My experiences with SIP

  1. Right on with the ICICI value discovery fund. The NAV is pretty much the same over the last 6 months, and that’s why, in continuation of my comment on your previous post, I dumped a small lump-sum of 10K (I don’t need this amount for quite a while) hoping for a reasonable uptick in the near future, even though it can be argued that the market is still very high right now. But my point is, since I don’t need this 10K now, what could be better than letting it grow in a proven fund, and I don’t care much for the market value right now as in the long run it’s bound to go up further.

    Also, please note that I’m making these lump-sum investments from another perspective. I’m redeeming some of my below-par funds, with the understanding that this is the best value I’ll get from them right now if I redeem and put that amount in a better fund.

    Eg : the 10K for value discovery came from redeeming a very old Kotak Tax Saver folio that had recently run-up well and I figured the time is ripe for me to get that amount out and put it in a better fund more suited to my portfolio.

    Please feel free to comment if this overall approach sounds reasonable from a very long term perspective.

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  2. I also wanted to thank you for the suggestion to go for DSP BR Microcap fund, on one of the posts in the AIFW FB group. Did some good research on that and felt it was really well aligned with my long term requirements of a proven, aggressive fund in the small cap space. Already happy with my choice and hoping to continue with this fund for a long association.

    Thanks a lot, you’re really making a difference – especially to those willing to learn and make aggressive moves by not just relying on SIP automation alone.

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  3. The results would be more valid based on how many downturns have they been through. I am talking about major market corrections/crash – dot com bubble burst, Satyam scandal, etc. A rising market means that lump-sum would be better than an SIP.

    The objective here is to maximize your gains but to restrict the downside as well. SIP in a good fund is a no-brainer any day.

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  4. Sir, how do you arrive at the range. In one of the blog post you mention range of nifty. How can one decide the range for other benchmarks for example cnx mid cap

    Thanks

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  5. Hi Rajshekhar, the link to your post ‘modified way of doing SIP investments’ is broken and brings to the post ‘My experiences with SIP investments’.

    Could you please fix it?

    Thanks and Regards
    Nishant

    Like

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