HDFC Mutual Fund's Flex SIP for Smart Investors

Posted by Dishika Baheti on August 24th, 2018

With the growing popularity of mutual funds in the Indian market, investors have become more and more attentive regarding various asset management companies that have been launching eye-catchy schemes that yield attractive returns. Among the list of many AMCs, it is hard to ignore HDFC Mutual Fund, a trust formed under Indian Trusts Act, 1882. This was formed as a result of trust deed with HDFC and Standard Life Investments Limited as sponsors/settlers and HDFC Trustee Company Ltd. as the trustee dated June 08th, 2000. The funds of HDFC MF are managed by HDFC Asset Management Company.

There are number of HDFC Mutual Funds that have been launched under different categories:

  1. Equity Funds
  2. Debt Funds
  3. Liquid Funds
  4. ETFs/FOFs
  5. Solution-Oriented Funds

Investment Modes

You may invest in its schemes through different modes of investment such as Lump Sum and SIP. SIP or Systematic Investment Plan is a medium of investment which allows you to invest by submitting small amount on a regular basis such as monthly, weekly, or quarterly. This investment is usually beneficial as it leads to a disciplined investment and helps avail the compounding benefit. This fund house has a unique investment feature for its investors in the form of HDFC Flex SIP.

What Is HDFC Flex SIP?

This SIP is a facility in which the periodic investments may become higher when the market is low to purchase more units, thus leading to higher returns at the end of the investment tenure. This facility will help an investor form a saving habit over time through the disciplined procedure that is being followed. To invest through this mode, there are two things that an investor should decide. They are- the amount to be deposited in the form of installments and the tenure for which the investment will be done.

Tenure under HDFC Flex SIP

There are five tenure options that it provides: 3 years, 5 years, 10 years, 15 years, and 20 years. When we talk about three years investment tenure, if an investor has chosen monthly format, then he will have to pay 36 installments and in the case of quarterly system, he will have to pay 12 installments.

Amount under HDFC Flex SIP

The installment amount to be invested in this scheme should be higher of the fixed amount which is to be invested per installment or the amount which is determined by the formula: (fixed amount per installment * number of installments including current installment) - market value of the investments that has already been processed through this Flex SIP, two business days before the SIP date.

HDFC Flex SIP Features

Every product has features of its own, so does this Flex SIP. Below are some of its unique features:

  • This facility is only applicable on the open-ended equity schemes and the open-ended balanced scheme under growth option of HDFC Mutual Fund.
  • The maximum limit of the first installment payable is Rs. 1,00,000.
  • The subsequent months installment amount can be a maximum of twice the first installment amount which means it can be Rs. 1,99,999.
  • The total amount invested during the tenure should not be more than the total enrollment amount which is 1st installment amount multiplied by total number of installments.
  • It doesn’t provide the SIP top-up feature.
  • The first installment amount will be the amount as stated by the investor in the enrollment form, following which the subsequent installments will be calculated according to the formula stated above.

You may invest in HDFC Mutual Fund online as well as through offline mode. Investing through Flex SIP will help you yield better returns compared to the normal SIP. If you have any confusion, do not forget to consult a financial advisor.

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Dishika Baheti

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Dishika Baheti
Joined: February 14th, 2018
Articles Posted: 33

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