What is the difference between SIP and lump sum?
Table of Contents
What is the difference between SIP and lump sum?
Understanding SIP vs Lumpsum SIPs allow you to pump in money into a mutual fund scheme periodically, such as daily, weekly, monthly, quarterly or half-yearly etc. On the other hand, lump-sum investments are a one-time bulk investment in a particular scheme. The minimum investment amount also varies.
What are three advantages of mutual funds?
The top benefits of mutual funds.
- Diversification at every dollar level.
- Sharing of investment expenses.
- Economies of scale and operational efficiencies.
- Easier to invest in specialized market sectors.
- Easy to access and track.
- Simplified portfolio management.
- Access to professional money managers.
- Low trading costs.
What is lumpsum investment?
Definition: A lump sum amount is defined as a single complete sum of money. For example, if an investor is willing to invest the entire amount available with him in a mutual fund, it will refer to as lump sum mutual fund investment.
Which funds are good for lumpsum investment?
5 Best Mutual Funds for Lumpsum Investment for Long Term
| Fund | NAV | 1 Year Trailing Return |
|---|---|---|
| Canara Robeco Bluechip | 41.24 | 53.82\% |
| Edelweiss Fund | 52.89 | 52.99\% |
| BNP Paribas Large-cap Fund | 137.8 | 47.03\% |
| Axis Bluechip | 46.07. | 48.47\% |
What are the advantages and disadvantages of SIP?
One-time investment vs SIP: Which is better?
| SIP investment | |
|---|---|
| Earnings | Earns better during market lows. Investment yields higher returns because of the power of compounding. |
| Protection from market volatility | SIP can protect your investment from any potential market crash. |
What are the advantages of systematic investment plan?
Systematic Investment Plan offers the benefit of rupee cost averaging. In simple language, rupee cost averaging means when the NAV is higher, your SIP investment will purchase lesser units of the mutual fund. Similarly, when the NAV is lower, the same instalment of SIP will buy more mutual funds.
What are some of the advantages of investing in mutual funds?