Best SIPs For 5 Years Investment 2023

A Systematic Investment Plan (SIP) is a sustainable way to save money, create wealth, and become a disciplined investor. We’re assuming you already know all about SIPs so let’s help you decide which ones you should invest in.

In this story, we'll get right down to business by revealing a snippet of the best SIPs for 5 years in equity, debt, and international funds currently being recommended on the Cube Wealth App. You may also consult a Cube Wealth Coach before investing in any such vehicle. 

Best SIPs For 5 Years In Equity Funds

Equity funds primarily in shares of companies to generate long term wealth. This approach presents a potential opportunity to long term investors who want to benefit from the Indian stock market's growth.

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Key Details Of Best SIPs For 5 Years In Equity Funds

1. Axis Focused 25 Fund

Axis Focused 25 Fund is an open-ended equity scheme that invests in up to 25 stocks. It falls under the 'Flexi-cap' category which means the fund manager has the freedom to invest across categories like:

• Large-cap companies
• Mid-cap companies
• Small-cap companies 
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This flexibility and versatility of Axis Focused 25 fund may be suitable for long term investors who are looking to invest in SIP plans for 5 years or more. 

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2. Mirae Asset Large Cap Fund
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Mirae Asset Large Cap Fund is an open-ended equity scheme that primarily invests in stocks of large-cap companies. A large-cap company is generally stable, consistent, and reliable.  
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Mirae Asset Large Cap Fund looks to leverage these benefits to generate returns for its investors. Thus, the fund may be suitable for patient investors who want to stay locked-in for 5+ years. 

3. Motilal Oswal Midcap 30 Fund

Motilal Oswal Midcap 30 Fund is an open-ended equity scheme that invests in up to 30 of the best mid-cap stocks. Mid-cap companies are not nascent companies or industry leaders, they're in the middle. 

Because of this, mid-cap stocks have the potential to generate better returns than large-cap stocks while being less volatile than small-cap stocks. 

Thus, the fund may be suitable for investors who are ready to deal with short term fluctuations for potential long term gains over 5+ years.

4. HDFC Flexi Cap Fund

As the name suggests, HDFC Flexi Cap Fund has the flexibility or freedom to invest in stocks from across market caps. This fund has been operating since January 1995.

Best SIPs For 5 Years In Debt Funds

Debt funds invest in high grade bonds and other debt securities in order to generate solid, predictable returns over the long term. This offers investors the potential to generate better returns than the average bank FD for long term wealth creation goals.

Key Details Of Best SIPs For 5 Years In Debt Funds

1. IDFC Banking & PSU Debt Fund

The IDFC Banking & PSU Debt Fund is an open-ended debt scheme that invests in the money market and debt assets from the banking and PSU sector. 

Banking & PSU debt funds invest in the high-quality bonds of companies with a high credit rating (AAA). This implies that the fund carries low volatility but can be prone to interest rate fluctuations.

Thus, the IDFC Banking & PSU Debt Fund may be suitable for investors who want to leverage the benefits of the banking & PSU sector for generating wealth over 5+ years. 

2. ICICI Prudential Corporate Bond Fund

ICICI Prudential Corporate Bond Fund is an open-ended debt scheme that primarily invests in corporate bonds with a high credit rating (AA+). Corporate bonds pay a fixed interest that these funds look to leverage. 

Corporate bond funds carry a low risk of default and generate better returns than your average bank fixed deposit. Thus, the fund may be suitable for conservative investors looking for long term wealth creation with a SIP plan for 5 years.

3. HDFC Money Market Fund

HDFC Money Market Fund is an open-ended debt scheme. It primarily invests in top-quality money market instruments that mature in approximately a year. 

Money market funds carry a low interest rate risk and volatility due to the average maturity duration of their portfolio. Thus, the fund may be suitable for investors looking to add debt funds to their portfolio for the long run. 

4. IDFC Dynamic Bond Fund

Dynamic bond funds like IDFC Dynamic Bond Fund can adjust their investment strategy based on interest rate fluctuations. This simply means that the fund manager can buy bonds that they deem fit - for the long or short term - based on RBI's interest rate changes.

Best SIPs For 5 Years In International Funds

International funds fall under the equity funds category and invest in either foreign shares of companies like Apple, Amazon, Google, etc. or other off-shore mutual funds. International markets grow at different paces over the long term, a potential that these funds allow investors to access.

Key Details Of Best SIPs For 5 Years In International Funds

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1. Franklin India Feeder - Franklin U.S. Opportunities Fund

Franklin India Feeder - Franklin U.S. Opportunities Fund is an open-ended equity scheme. It is a feeder fund which means it invests its capital in an offshore fund - Franklin U.S. Opportunities Fund.

Franklin U.S. Opportunities Fund uses the capital to invest in high growth US stocks with the potential to generate long term wealth for its investors. There are two benefits to this:

1. You get the benefits of US stocks without having to pick them on your own
2. You don't have to pay taxes in the US
   

Thus the fund can be beneficial for investors looking to geographically diversify their portfolio with a SIP plan for 5+ years. 

2. Edelweiss Greater China Equity Off-shore Fund

Edelweiss Greater China Equity Off-shore Fund is an open-ended 'fund of funds' scheme. Fund of funds don't invest in stocks or bonds, they invest in other mutual funds. 

Edelweiss Greater China Equity Off-shore Fund invests in JPMorgan Fund’s - Greater China Fund which invests in stocks of high growth companies in the Greater China region.

This fund may be suitable for investors with a long term outlook (5+ years) and the patience to bear short term fluctuations. 

3. PGIM India Global Equity Opportunities Fund

This international fund is a fund of funds (FoFs) scheme that invests in the units of PGIM Jennison Global Equity Opportunities Fund.

Note: All facts and figures in the tables above are updated as of 16/07/2021 and are taken from publicly available sources.

How To Invest In The Best SIPs for 5 years?

The fundamental idea behind SIP investing in mutual funds is to make long-term investments in fixed amounts at regular intervals. With this investment strategy, you can gain from the power of compounding.

Investing in the right SIPs can be one of the best ways to pay your future self. But here’s the catch, nobody really tells you what's right for you.

That is why most investors struggle to find the right SIP mutual funds based on their goals and risk profile. But there's a solution - Cube Wealth! 

Cube gives you access to curated mutual fund advice from Wealth First, Cube's mutual fund advisory partner. WF handpicks the best SIP mutual funds for Cube users. 

You can take the detailed risk analysis quiz on Cube Wealth and start a mutual fund SIP based on your investment goals and risk appetite with the QuickSIP feature for as low as ₹1000.

Cube's SuperSIP feature goes on to simplify the SIP process by letting you snooze your SIP payments in case you don't have capital. 

Watch this video to know more about handpicked mutual funds on Cube Wealth

[Updated on September 16th 2021]

FAQs Around SIP Investment

Q. Which SIP is best for 5 years?

Ans. The answer is to build a perfect portfolio of SIP mutual funds for 5+ years based on your investment goals and risk appetite. Cube's perfect portfolio philosophy sets you up for the short term, medium term, and long term with diversified investments within and across mutual fund categories.

This could include SIPs in liquid funds for emergencies, debt mutual funds for the short and medium term along with conservative, moderate, aggressive, and international SIP mutual funds for 5+ years. You may download the Cube Wealth App to begin your investment journey.

Q. Why Should You Make A Long-Term SIP Investment?

Ans. A long-term SIP investment is investing regularly in smaller amounts. This helps you save a larger amount over the long term with small investments at regular intervals. It has the power to compound and accumulate into a large corpus. This consistency can transform your future financial health.

Q. What Is The Power Of Compounding?

Ans. Compounding is reinvesting your returns. You also gain returns on your investments with the principal amount invested. This very effect is called the compounding effect. It is often compared to the snowball effect; small actions over time can lead to big gains.

Q. What is the minimum SIP amount?

Ans. The minimum investment amount on the Cube Wealth app is ₹1000

Q. Which SIP is best for long term investment?

Ans. Equity funds, international funds, and ELSS funds are known to be suitable for long term SIP investments. The reason behind this lies in the nature of their investment portfolio.

Conclusion 

Selecting the best Systematic Investment Plans (SIPs) for a 5-year investment horizon involves a careful consideration of one's financial goals, risk tolerance, and market conditions. The SIPs you choose should align with your objectives, whether they're for wealth creation, achieving a specific financial milestone, or capital preservation. It's important to conduct thorough research, diversify your investments, and periodically review your SIPs to ensure they remain in line with your goals and the evolving market landscape. While historical performance can provide insights, it's vital to remember that past performance is not indicative of future results. Consulting with a financial advisor can offer valuable guidance in selecting the best SIPs for your 5-year investment plan, enhancing your chances of achieving financial success.

These funds invest in shares of companies in the Indian stock market that may experience volatilty in the short term but has historically been observed to grow over 5+ years. Read more about long term SIP investments here

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