Benefits of Investing in Reliance SIP
February 25, 2019 (Investorideas.com Newswire) Reliance Industries Limited is one of the most trusted corporate conglomerates in India. Their asset management company (AMC), the Reliance Mutual Fund, is investors' preferred choice. Its popularity is because of the availability of a wide range of plans, for investors from all walks of life. One such noted plan is the Reliance Systematic Investment Plan (SIP).
It is preferred by a large number of investors, because it facilitates investments in a variety of schemes, run by various fund houses, simultaneously.
Reliance SIP provides suitable plans to the investors, based on their financial health and investment needs. Reliance SIP investment benefits are as follows:
Reaching Financial Goals
Reliance SIP investment caters investors meaning to build wealth, for future financial goals. The plan involves multiple components working in tandem, to generate wealth for the investors progressively. Whether the funds are needed for unexpected expenses, children's education, marriage, the dream house or a comfortable life after retirement, Reliance SIP plan delivers.
Inculcating Financial Discipline
Reliance SIP investment instils financial discipline in the investors because they are required to make fixed investments regularly. This financial discipline ensures regular savings and accumulation of wealth, over a long period.
The Power of Compounding
Reliance SIP investment is designed to reward long-term investors because returns on investments are reinvested to generate more income, a concept known as compounding. Thus, income is generated on investments and returns alike.
Rupee Cost Averaging
Another rewarding feature of Reliance SIP investment is SIP Investment. This in concept means, the same investment amount is used to buy fewer units when the market is rising and more units when the market is falling. This reduces the average cost per unit in the long run.
Freedom from Market Timing
People investing in market-linked funds are required to track the market trends and mobilize their investments accordingly, to avoid losses. This continual Market Timing consumes a lot of time and could potentially be very stressful. But for Reliance SIP, such Market Timing is unnecessary, since fixed amounts are paid on a scheduled timeline. This financially benefits the investors over a long-term period.
An investor-friendly feature of Reliance SIP investment is affordability. Reaping fair returns can begin with a small investment of INR 100 per month. Various Reliance SIP investment plans accommodate small regular investments like Rupees 500, 1000, 1500 etc.
Flexibility is provided with respect to the tenure of the plan. Though SIP rewards long-term investments, an option is provided after the lock-in period of 3 years, where investors can opt to redeem investment and returns.
Flexibility is provided in the aspect of payment methods as well. Investors can choose suitable payments methods, from the given list, which includes national electronic funds transfer (NEFT), direct debit mandates, post-dated cheques etc.
Highly profitable flexibility is provided with respect to the amount of investment, which is known as the Reliance Smart STeP. This allows the investors to invest more than the fixed amount, when the market is down, for buying more units. This creates more wealth in the long run.
The Convenience of Online Operations
Reliance SIP investment can be operated easily online, due to its secure and user-friendly website. Investors can perform all operations, starting from selection of specific plans to redemption of investments, from the comfort of their homes. Fixed regular investments can be made by issuing standing instructions to the bank and arranging for auto-debit from the associated bank accounts.
Reliance SIP investment provides hassle-free renewal of the plans. Investors can keep their plans in force, and enjoy prolonged financial benefits by simply selecting the ‘perpetual' option while filling the enrolment form.
Customer-centric Design of Plans
Reliance SIP Mutual Fund is on a perpetual mission to optimise SIP investments in India. This is a herculean task because investors are largely heterogeneous. They are characterised by striking differences in scales of income, financial needs, financial discipline, awareness of investment plans and openness to calculated risks.
Reliance SIP investment is equipped with an ample number of plans to serve this diverse group of investors. The plans are broadly divided into two categories: A) Equity Fund and B) Liquid Fund. Equity Fund plans are more market-sensitive and potentially yield high returns. Liquid Fund plans are more market-immune and potentially yield steady returns.
Some of the popular Reliance SIP plans are:
Reliance Equity Fund
In the case of Equity Fund, investments are majorly made in Equity-related instruments. Returns are generally in the form of dividends or capital appreciation. The performance of these funds depends on the market conditions. Handsome profits can be made over a period of 3-5 years.
Equity Funds are further classified as follows to cater to investor preferences:
Reliance Small Cap Fund
In the case of Small Cap Fund, investments are predominantly made in Equity-related securities of upcoming small companies. Returns could potentially be very high, but they are highly vulnerable to market risks. They are suitable for investors willing to take calculated risks for big returns.
Reliance Tax Saver Fund
In the case of Tax Saver Fund, investments are made majorly in the Equity-related instruments of small-cap and mid-cap companies. An added advantage of this plan is that the investors enjoy tax benefits, up to a maximum investment of Rs 1.5 lakhs, under section 80C of the Income Tax Act, 1961. This plan is suitable for investors with a high-risk-high-gain mindset.
Reliance Equity Hybrid Fund
Equity Hybrid Fund or formerly Reliance Regular Saving Fund invests in both Equity-related and Fixed-income securities. This plan is suitable for investors with medium risk appetite and a vision to accumulate wealth over a long-term period. This is a popular plan with a fund size of Rs 11334 crores. Based on recent performance, it generated 12.71% returns on 3-year investments and 17.60% returns on 5-year investments.
Reliance Large Cap Fund
In the case of Large Cap Fund, investments are divided as 84.6% in large-cap securities and 15.4% in mid-cap securities. Since large companies employ proven methods for generating wealth and managing market risks, this plan yields steady returns over a long time and is suitable for investors preferring reduced market risks. For these benefits, this plan attracts NRI investors, making them an integral part of the nation's economy.
Reliance Liquid Fund
In the case of Liquid Fund, investments are made primarily in Debt Funds and Money Market Funds, which offer high liquidity and favourable returns in the long run. This is another popular plan, with a fund size of Rs 21747 crores. This has been performing well consistently in the market, with a low expense ratio of 0.15%. This is suitable for investors who are willing to deal with moderate market risks and prefer steady long-term returns.
The recent performance of the above-discussed plans is tabulated below.
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