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Returns from systematic investment plans (SIPs) over three and five years of 6-7% have disappointed investors. Critics of SIPs argue that the plan has a fundamental flaw because it invests the same amount of money every month irrespective of market valuations. Experts also blame a polarised market in the last three years – where few stocks participated in the rally – for lower returns in SIPs.
Some financial planners have come out with tools that will help investors get the best returns on systematic investment plans. Let us understand what they are.
Rank MF, owned by Mumbai-based Samco Securities, uses algorithms to arrive at an investment decision. The algorithm signals whether an investor should continue with the SIP in the same scheme, jump a SIP if valuations are high, or double his SIP in a month.
For example, as per Rank MF a smart SIP in Motilal Oswal Multicap 35 over the last one year would have generated 5.56% returns against a return of 4.67% using the traditional SIP method.
Online investment platform fundsindia.com offers a ‘Value SIP’. In this system, if you invest Rs 5,000 every month, and if the value of that investment appreciates to RS 5,500 the next month, the system would deduct only Rs 4,500 from your account. If it depreciates to Rs 4,900, you invest Rs 5,100. Such products are known to generate higher return than traditional SIPs over the long term.

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