Most of us only think of SIP as monthly investment in MF schemes. But lately , I think that we can beat volatility little better by investing in MF SIP albeit differently i.e. daily/weekly instead of monthly. Since weekly SIP in equity MF is not allowed currently, we can follow another strategy – Start SIP of 5k in one of HDFC liquid fund (you can do it by using HDFCMF online account) and then started weekly STP of 1k from the liquid MF to any equity MF for e.g. HDFC Top 200 fund. Better option is to park a big lump sum amount in a liquid fund instead of parking it a SB account and register for weekly STP. You get a better return for your money in liquid fund (~8%) compared to your SB acc and also continue equity investment regularly. In the current volatile market, 5k invested as monthly SIP on 20th Apr would have been 4521 one month later but as it is invested as weekly SIP, the value is 4789.
If one wants to invest 5k/month better opt for a SIP of 1k/weekly. Point to note here is that weekly SIP performed approx. 6% better than monthly SIP during the same period. The % here is debatable if the market goes up one month later but this is the performance in a volatile market.
Would like to hear from the members about this strategy given the current volatile market.