FAQ Archive - Page 6 of 6 - fisdom

How is an SIP initiated / executed?

You can invest in an SIP through the fisdom app by clicking ‘build wealth’ or ‘save for a goal’ or ‘save tax’. In each case, you need to only specify the monthly amount you can invest. The system recommends the funds and once you accept, takes you to a payment gateway. Your net banking opens there and you make the first payment.

Thereafter, we contact you for getting your signature on a bank mandate (called ECS mandate). This authorises your bank to transfer the same fixed amount of money every month to the fund automatically on a pre-defined day. Thereafter no intervention is required from your side.

Can I invest variable amounts every month in an SIP?

No, you cannot.

We recommend that you start an SIP for the minimum amount you are confident of sustaining month-on-month. For any additional amount you end up with, you can always invest lump-sum through the app. However, starting the SIP (even if for the smaller amount) gives you the discipline and consistency of investing.

How is an SIP superior to investing one-time or lump-sum?

When you invest lump-sum, there is always a risk that you put money when the market was high. If the market goes down in the short term thereafter, you lose some capital.

In an SIP, you put in a fixed amount every month. In a particular month, if the market was high, you earn less units of the fund for your money. If the market was low, you earn more units. That way, you end up buying more units when things are cheap and less when they are expensive. Thus, you are shielded from short term fluctuations of the market and benefit from its growth in the longer term.

What is an SIP?

An SIP is a systematic investment of a fixed sum of money every month into a mutual fund. It is one of the simplest, yet most effective ways to save money regularly and grow it over time. Once initiated, the process happens every month automatically from the bank account.

How fisdom recommends?

We have a robust and tested research methodology to recommend the best set to you. We cover a range of factors:

1. Minimum 3-5 year track record
2. Performance and returns over multiple time horizons: 1yr, 3yr and 5yr (additionally 6m for debt)
3. Performance in bull and bear markets, and during upward and downward movement of interest rates
4. Performance of fund manager in other schemes, and over time
5. In case of equity, diversified portfolio with limited exposure to mid and small cap stocks (which are inherently more risky)
6. In case of debt, funds with limited or no exposure to private sector corporate debt (especially real estate and construction, but also other sectors like paper, logistics, FMCG, NBFC, etc). Other than sovereign debt, we usually only consider funds with banking and / or PSU debt in the portfolio
7. In case of debt, less or more exposure to the yield curve, based on the tenure of the investment