Principal Mutual Fund, a part of a US-based Principal Investment Group, has been doing business for nearly 2 decades. The noted fund house offers services to more than 5 lakh customers and is increasing the investor base by working in collaboration with 20,000 empaneled distributors across India. So, you can plan your financial goals keeping in mind the prowess of this fund house. The best way by which you can achieve your financial goals is by investing in the Principal Mutual Fund SIP. Let’s see through this post as to how SIP will help you achieve it.
Principal Mutual Fund SIP Benefits
The SIP investments come with a slew of benefits that you can check below.
Economy of Investment – The investments can start with as low as ₹500 monthly.
Brings Discipline into Your Overall Routine – The SIP investments happen periodically – monthly, quarterly, half-yearly or annually. Of which, experts vouch for monthly investments as they bring discipline into the overall routine of an investor. This will make you avoid unnecessary spends, thereby increasing your savings.
Rupee-cost Averaging – With SIP investments, you stand to benefit from the rupee-cost averaging principle. Yes, this helps you average the cost of investment by buying more units when Principal Mutual Fund NAV hits low and less units when the NAV rises. This is more like cushioning the investments in the face of constant market fluctuations.
Power of Compounding – The power of compounding feature can help you reap out the maximum from your invested capital. The longer you stay invested, the more the capital is likely to rise. The massive capital growth prospects make Principal Mutual SIP an apt solution to achieve your financial goals.
How Much Do You Need to Invest Monthly to Achieve Your Goal Corpus?
Achieving the goal corpus is a bi-product of the monthly investment you make via a Systematic Investment Plan (SIP). So, you need to figure out your monthly investment amount meticulously. Also, you need to factor in inflation, your income & expenses before arriving at the monthly investment amount. You can use the SIP calculator to get a realistic picture of your future investments. The calculator will help compute the estimated surplus amount based on the monthly investment amount, expected rate of return and the investment period. Although equity funds can generate returns well into the high double-digits, you can take a conservative 12% to figure out the corpus you are likely to generate on your investments.
Which Principal Equity Mutual Funds Should You Invest in?
The decision to choose equity funds rests purely on the kind of performance they must have delivered over the years. What’s also important is that Principal Equity Mutual Funds can come with different risk grades. The variation in the grades makes it vital for you to assess your risk appetite carefully. If you have a moderate risk appetite, you can choose large cap and multi-cap funds. Large cap funds invest in the top 100 companies according to market capitalization. These companies are financially sound and thus combat the tough market times much better. Investing in these company stocks can ensure stability. On the other hand, multi-cap funds invest across the market capitalizations and are thus diversified in scope. Whereas, both small-cap and mid-cap funds can shoot up the returns from nowhere. But they can decrease the returns faster too, in a weak market scenario.