SIP in MF or in direct equity? :: Business Line

�� -->

Nitin Shah is a 36-year-old investor who follows the stock market and has been an equity investor for over 8 years. He wishes to start monthly investments in systematic investment plan (SIP). He wants to know what would maximise returns — SIP in equity mutual fund or SIP in direct equity?

And the winner is…..

SIP investment in mutual fund is likely to give higher risk adjusted returns compared with investment in direct equity. Nitin may be better off making monthly investments in mutual funds and making opportunistic stock purchases alongside. While Nitin may be skilled in equity investments, he may not be able to invest enough time, thereby giving an edge to professional fund managers.