Systematic investment plans (SIPs) have been gaining popularity among Indian investors, as it allows investors to invest in mutual funds without worrying about market uncertainty and risks associated with it.
It is one of the best options for investors who are looking for long-term investment and for that it is beneficial if the investment process starts as early as possible for better return in the future.
At the same time, investors today have the option to take advantage of innovative features such as Booster SIP. This advanced feature is offered by ICICI Prudential Mutual Fund as a means to help investors to make out of volatile market conditions.
Booster SIP invests in Equity and Debt based on dynamic instalment. It allows investors to invest in a disciplined manner to the source scheme and transfer a variable amount to the target scheme in the range of 0.1X-10X of base instalment amount depending on EVI model at regular intervals.
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Through this feature, a smaller amount of the base instalment is invested when equity valuation is considered expensive. Conversely, when the valuation is considered cheap, the investment will be relatively higher, according to a press release.
Let us understand with an example, suppose an investor chooses a SIP amount of ₹10,000, then this amount gets deducted every month and is invested in a debt fund. Thereafter, based on the equity valuation index, an amount ranging from Rs1,000 (0.1x) to Rs1 lakh (10x) could be invested into equities.
"The disciplinary approach of regular investments is of big advantage to the investor as he/she doesn't need to actively track the market,” says Viral Bhatt, Founder of Money Mantra.