Best SIP for Long Term Financial Goals

When looking to nurture wealth for long-term financial goals, mutual funds (MFs) offer a wide range of schemes catering to your diverse needs. Whether you're a first-time investor with an average risk appetite, a sophisticated investor, or a high-risk taker with goal-based investing, you can have the right amount of funds at the right time for meeting specific financial goals.

You have two options to park funds in an MF scheme, through lump-sum investment or finding the best sip for long term wealth creation.

Here, a Systematic Investment Plan or SIP helps you build wealth over time by investing small sums of money monthly in an MF scheme. With SIPs, you enjoy three advantages - a disciplined approach to investing, power of compounding, and rupee cost averaging.

So, here's a list of the best mutual fund for long term SIP.

Equity funds

Equity mutual funds aim to generate solid returns by investing your funds in the stocks of companies across varying market capitalizations. While equity funds are riskier, they can also offer higher returns.

Equity mutual funds park at least 60% of your money in equity shares of various companies in defined proportions. The assets are allocated aligning with the MF scheme's investment objective. And after putting funds in stocks of large-cap, mid-cap, or small-cap companies, the remaining amount goes into debt and money market instruments to bring down the risk level.

Before investing, you can use Tata Capital Moneyfy app’s SIP calculator to determine how much money you need to accomplish your goal.

Additional Read – Which Mutual funds to Invest in For Long Term Growth?

Debt funds

Companies looking to raise funds issue debt instruments and 'borrow' from their investors. In return, they promise a decent yet consistent interest. When you invest in a debt instrument, you essentially lend money to the entity issuing the instrument.

Debt funds typically invest in fixed-interest-generating securities, including treasury bills, commercial papers, corporate bonds, government securities, and other money market instruments. Before deciding on the best SIP plan for long term, you must consider picking the debt funds depending on the credit quality of the bonds. You should invest in debt funds with AAA-rated bonds.

You must also factor in the expense ratio, which shouldn’t be high. Moreover, the debt funds should have a strong performance track record over three to five tears.

Hybrid funds

Hybrid mutual funds are schemes investing in more than one asset class. Typically, they accommodate equity assets, debt assets, gold, or even real estate. Hybrid funds nurture your wealth through three key philosophies- asset allocation, diversification, and correlation.

Hybrid MF schemes minimize investment risk by diversifying within multiple asset classes to achieve maximum returns.

Additional Read – Smart Retirement Planning with Long Term Investments in Mutual Funds

Summing up

Having the right mix of debt instruments, equities, and hybrid MF schemes in your investment portfolio is pivotal in helping you achieve your long-term financial goals. Where equities serve the potential of high market-linked returns, debt funds bring stability, and hybrid schemes shield you against high market volatility exposure.

Start investing to fulfil your long-term wealth creation goals with Tata Capital’s Moneyfy app. Indulge in goal-based investing today!