Page 99 - BFSI CHRONICLE 10 th Issue (2nd Annual Issue ) .indd

BFSI Chronicle, 2 Annual Issue, 10 Edition July 2022
nd
th
upon the NAV on that day. For e.g., the NAV fewer units when the markets are up. Since
of SBI Blue Chip on 10ThJune 2022 goes to Rs. NAV of all mutual funds are updated on a daily
55.0128 then number units credited to your basis, the cost of purchase may vary from one
folio 181.7759 if next month on 1oth July NAV SIP instalment to another. Over time, the cost
goes to 51.0228 the number units credited to of purchase averages out and turns out to be
your folio will be 10000/56.0123=195.9908 and on the lower side. This is known as rupee cost
changes in NAV and UNITs accordingly are as averaging. due to this rupee cost averaging
shown below for one year. SIP investment for longer periods return
on investment is seen higher than one-time
SIP AMT NAV UNITS lump sum investment, since this benefit is not
available when you invest a lump sum.
10000 54.0739 184.9321
Various Advantages of SIP investment
10000 55.0128 181.7759
1)Investment with small amount:
10000 51.0228 195.9908
Investment can be started with small amount
(minimum of Rs.1000 per month) but there is
10000 50.0997 199.602
no limit for maximum amount monthly SIP as
10000 52.1237 191.8513 such one can start SIP with any amount suitable
to him. It is simple and most convenient way
10000 53.1458 188.1616 to start investment to meet our financial goals,
it also inculcates financial discipline. (Few
10000 48.9957 204.0995 mutual funds allow you start with minimum
Rs.500 only.)
10000 53.9969 185.1958
2)Rupee cost averaging:
10000 58.0455 172.2786
When the markets are down, you purchase
more fund units while you purchase fewer
10000 53.9984 185.1907
units when the markets are up. The averaging
10000 52.7746 189.4851 of unit price of equity mutual funds for long
term reduces the risk arising out of short-term
10000 60.6639 164.8427 volatility in the market.

120000 643.9537 2243.406
3)Higher returns than traditional investments:
Equity and hybrid mutual funds have potential
53.6628 53.4901
to give much better returns than traditional
From the above table it is clear that over a investments such as PPF/NSC/Bank FD/
period of one-year average NAV comes to Sukanya Samruddhi. Though returns are not
Rs.53.6628 whereas average cost per unit comes guaranteed however it is seen that returns
to Rs.53.4901, When the markets are down, you for longer period (more than 5 years) are in
purchase more fund units while you purchase the range of 12 to 15 % which are nearly or

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