Good Mutual fund SIP suggestions

Hi

I want to invest 1000/2000 Rs per month as a SIP. Suggest me good SIP plan. Is there any good SIP schemes offered by SBI/Reliance or birla as i have online a/c of these fund houses. Also i want to know what is the minimum period to invest in SIP. say for 6 month or 1 year. and is entry load deduct every month. One more question. is it automatically deduct the money from my bank a/c for SIP for a pre-defined date, or i have a option to transact manually each month.

Uncle ji.

I will not recommend any specific fund but I will try to answer to the best of my abilities.

a) You don't need to have an account with an MF house. In fact that has no advantage or disadvantage. All you need is a bank account with a direct debit/ECS facility. After enrolling in the MF, your bank account will be linked to the MF. SIPs amounts will be directly debited from bank account and sale proceeds will be credited to the same account automatically.

b) With an SIP, 6 months to 1 year is very short period. You may not make more than 15% in this period and that too if the bourses are rising continuously. You could even make a loss.

c) SEBI has directed all MFs to stop entry and exit load. But till it is completely implemented, entry load is deducted at the time of entry itself. Typical entry load is 2.5% and it is deducted immediately. The rest is used to purchase units.

d) As I said before, ECS mandate can be made with the bank. You can ask the MF to present a debit note to the bank on specific day of the month. It will be done automatically and you do not have to do any paperwork/manual work.

e) If you can, increase the SIP limit to Rs. 5000 and invest Rs. 1000 in five funds instead of a single fund.

f) Use websites such as MoneyControl.com, PersonalFn.com, rediff.com to analyze the best MFs. Do not look at current returns alone - rather look for performance for the past three years.

g) STAY AWAY from new fund offers (NFOs). Also avoid thematic funds like "xxx Infrastructure Fund", "yyy Power and Utilities Fund", "zzz IT/Pharma fund", etc. Invest in diversified fund.

Thanks for this informative reply.