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Edelweiss Insights I am SIP and here are my many avatars!

I am SIP and here are my many avatars!

Get acquainted with the many variants of SIP
Team Cafemutual Jul 2, 2018

You know me; I am systematic investment plan more popularly known as SIP. I am the torchbearer of regular and disciplined investing. I encourage investors to maximise their wealth by becoming an integral part of their financial plan. 

While most of you know about me and the benefits I bring, you may not be aware of my avatars. I spoke to Cafemutual to help you know my avatars.

Avatar 1: SIP top-up

Let me start with SIP top-up. As the name suggests, SIP top-up refers to topping up or adding a small amount to your clients' existing SIPs. Through SIP top-up, your clients can increase their SIP allocation by a fixed or variable amount at a predefined frequency. Your clients can activate the SIP top-up for a period of their choice or cap it after reaching a desired amount. If no upper limit is set then the SIP top-up upper limit will be the maximum permissible transaction amount as per the client’s bank mandate.

SIP top-up is a handy tool to increase your client’s investments in tandem with his/her increasing income.

SIP top-up example

SIP Tenure:      


01 Jan 2017 to

31 Dec 2018

Monthly SIP instalment: 


Top up amount:  


Top up frequency:      

6 months

Instalment No(s)

From Date

To Date

Monthly SIP Instalment

SIP Top-up

Increased Monthly SIP


Amount (Rs.)

Amount (Rs.)

Amount (Rs.)

1 to 6






7 to 12






13 to 18






19 to 24







Avatar 2: Variable/flexible SIP 

You must have told your clients so many times that market corrections are investment opportunities. Variable/flexible SIP is built on just that idea. Here your client will invest an amount higher than the monthly SIP instalment during low markets and invest less when markets rise.

This will help your clients benefit from market movement. However, a key risk is that your client will not know in advance the instalment amount. This will prevent him/her from budgeting for it. Moreover, it inculcates a habit of timing the market, which is contrary to my core philosophy. If your clients opt for variable/flexible SIP do not forget to advise them to set a minimum and maximum investment cap so that they don’t get a shock after looking at the instalment amount. At present, only a few AMCs offer this facility.

Avatar 3: Portfolio SIP

In portfolio SIP (PSIP) investors can allocate their SIP amount to multiple schemes based on their risk profile. Only a few fund houses offer portfolio SIP. You need to assess your client’s risk profile to guide them on which schemes to invest in and the amount of investments. However, you can only help your clients invest in multiple schemes of a single fund house.

Avatar 4: Perpetual SIP

Traditionally, I was for a fixed period such as 3 years, 5 years and so on. This meant that at the end of the SIP tenure you had to approach your clients again for renewal. Perpetual SIPs were introduced to lessen your burden and make investing truly long-term. Perpetual SIPs are ongoing SIPs, which remain active till the investor decides to discontinue it.

Avatar 5: Customisable SIP

I know we all love customisation, tweaking things to make them our own. Customised SIP is a step in that direction. Here investors can name the SIP, start it on a day of your choice, pause it temporarily, change the amount and have flexible instalments. Currently, only a few fund houses offer customised SIPs. Also, different mutual funds offer different combinations of features in their version of customised SIPs. You can recommend these SIPs to your clients to give them more flexibility in terms of their investments.

How did you like my avatars? You agree now that there is more to me than you ever realised, right?

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