How to Get the Best Return in SIP Mutual Fund

However, to get the best return in SIP mutual funds, it’s crucial to choose the right funds that align with your future goals. 
In this guide, we’ve curated a list of top SIP plans that you can think about investing in. Also, we have included pro tips to make an informed investment decision and maximize your returns.

What is SIP Investment? 

A Systematic Investment Plan (SIP) is a mode of investment in mutual funds where a fixed sum of money is deducted periodically (e.g., monthly, quarterly, or annually) from your bank account and invested into a mutual fund scheme. 

This offers significant benefits to investors as it enables them to average out the cost of units and benefit from the power of compounding. Furthermore, it helps you attain long-term financial goals, such as funding children’s education, buying a home, and more. 

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5 Best SIP Plans with High Returns in the UAE

Here are the top five SIP mutual funds that can offer you significant returns: 

1. Quant Large and Mid Cap Fund

This is an equity fund under Quant Mutual Fund that mostly invests in high- and mid-cap firms. Since its inception, the fund has provided good returns and demonstrated reliability. 

Overview

• Market entry: January 2013
• Delivered the highest return among Large & MidCap funds over the past 10 years
• Risk level: High risk 
• Top Holdings- Larsen & Toubro Ltd., Reliance Industries Ltd., Aurobindo Pharma Ltd., ITC Ltd., and Lloyds Metals & Energy Ltd
• AUM- ₹3,658 crore
• Minimum SIP amount- ₹1000
• Expense ratio- 0.63%
• Exit load- 1.0%

2. IDBI Small Cap Fund Direct-Growth

This small-cap equity fund primarily invests in capital goods, chemicals, metals mining, construction, and more. Since its inception, it has delivered an impressive 22.90% return annually. It’s ideal for those seeking high growth with a high-risk appetite. 

Overview: 

• Market entry: June 2017
• Holdings: 97.5% holding in equity and 2.5% in cash investments
• Risk level: High risk 
• Top Holdings: Elgi Equipments, Kei Industries, Tube Investments of India Ltd., Grindwell Norton Ltd., Timken India Ltd., and more
• AUM- ₹464.52 crore
• Minimum SIP amount- Not supported
• Expense ratio- 0.97%

3. Parag Parikh Flexi Cap Fund

Amongst flexi cap funds, this performed very well in the past 10 years. It primarily invests in equity and equity-related securities and focuses on the financial, technology, services, energy, and automobile sectors. 

Overview: 

• Market Entry: May 2013
• Holdings: 78.67% of equity and 20.1% of cash
• Risk level: High
• Top Holdings- HDFC Bank Ltd., Bajaj Holdings & Investment Ltd., Power Grid Corporation of India Ltd., Coal India Ltd., and so on
• AUM- ₹87,539 crore
• Minimum SIP amount- ₹1000
• Expense ratio- 0.63%
• Exit load- 2.0%

4. SBI PSU Direct Plan-Growth

This is another highest return sip mutual fund offered by SBI Mutual Fund and contains a high level of risk. It's an equity-based plan that primarily invests in public sector undertakings and is ideal for those who are looking for steady returns. 

Overview: 

• Market entry: January 2013
• This SIP mutual fund has invested 94.8% in equity and 5.1% in cash
• Risk level: Ideal for investors with a very high risk appetite
• Top Holdings- State Bank of India, Power Grid Corporation of India Ltd., GAIL (India) Ltd., and more
• AUM- ₹4,572.13 crore
• Minimum SIP amount- ₹500
• Expense ratio- 0.78%
• Exit load- 0.50%

5. Edelweiss Large & Mid Cap Fund

This is another best SIP plan with high returns among Large & MidCap funds. It exposes investors to diversified industries, including financial, technology, healthcare, and more. 

Overview: 

• Market entry: January 2013
• 97.55% of the money has been invested in equity, while 2.63% is held as cash
• Risk level: Very high risk 
• Top Holdings- HDFC Bank Ltd., ICICI Bank Ltd., Dixon Technologies (India) Ltd., Persistent Systems Ltd., and more
• AUM- ₹3,796 crore
• Minimum SIP amount- ₹500
• Expense ratio- 0.42%
• Exit load- 1.0% (if redeemed within 90 days)

How to Choose the Best SIP Plans with High Returns in the UAE?

We have mentioned some simple tips to help you select the highest-return SIP mutual fund in the UAE: 

1. Know Your Investment Goal

Before making any kind of investment in your life, it is crucial to define your goals. Whether you are saving for retirement, education, or a large purchase, being clear about your investment objectives ensures the right fund choice.

2. Assess Risk Tolerance

Assess your ability to handle market fluctuations. Equity funds suit high-risk investors, while debt funds are better for low-risk preferences. However, the risk does not only depend upon the preferences of your funds; your age, income, and financial responsibilities are other factors that are considerable. 

3. Evaluate Fund Performance

To get the best SIP return, you need to be aware of the variety of funds available in the market and how they are performing. Look for consistent performance of funds over a minimum of five years and evaluate their resilience. 

4. Expense Ratio 

The expense ratio can impact your overall SIP mutual funds return. You should keep in mind that lower expense ratios result in higher net returns and vice versa. So, avoid funds with disproportionately high costs.

4. Check Fund Management Quality

It's another factor that you should consider while choosing the best SIP plans. You must understand the fund manager's background and the process they use to manage funds. However, a skilled fund manager ensures optimal returns. So, it’s important to review the fund house's reputation and management experience.

5. Diversify Investments

Don't put all your eggs in a single basket while investing in SIP mutual funds. It’s crucial to diversify your portfolio—spread investments across equity, debt, and hybrid funds to balance risk and returns. 

Common Mistakes to Avoid for Maximum Return in SIP

Avoid the following mistakes to avail better returns from your SIP mutual funds: 

• Investing in funds unsuitable for your financial goals can hinder returns
• Investing too much or too little without evaluating your finances
• Skipping SIP installments can adversely impact your wealth accumulation
• Avoid withdrawing prematurely to realize the full compounding effect
• Not reviewing your portfolio regularly
• Not considering diversification in your portfolio
• Use advanced tools, such as the SIP return calculator, to get an estimated return
• Not increasing SIP amount over time

Frequently Asked Questions