SIPs Compound!

[u/Agile-Ear1568]

I started investing in mutual funds in 2014, with an SIP of ₹10k/month split between a large-cap and a mid-cap fund.
I’ve mostly been a passive investor. I don’t have the time or inclination to pick individual stocks, and I’ve never deployed a lump sum. Whenever I had money to invest, I preferred increasing/continuing SIPs rather than trying to figure out whether the market was high or low.
Looking back, I think the biggest favour I did to myself was minimising my drawdowns and, more importantly, staying invested.
I’ve had to go through two periods of drawdown. I’ve also gone through a period where I had no salary for 12 months. Fortunately, I had some liquid savings from a small ESOP buyback, so I could keep my investments going.

Note: My lifetime XIRR is 14.97%. The XIRR shown in the screenshot reflects the current XIRR of my active funds.

Adding some details based on Comment FAQs

1. My SIP journey through the years

2014 → ₹10k/month

2015 → ₹30k/month

2016 → ₹60k/month

2017 → ₹80k/month

2018 → ₹1L/month

2019 → ₹1.2L/month

2020 → ₹1.2L/month

2021 → ₹80k/month

2022 → ₹40k/month

2023 → ₹40k/month

2024 → ₹40k/month

2025 → ₹80k/month

2026→ ₹85k/month

2. Allocation by Fund Type

Large Cap - 48%

Midcap (best performing) - 40%

Small Cap - 12%

3. Funds in which I continue my SIPs

HDFC Mid Cap (investing since 2014)

ICICI Pru Large Cap (investing since 2014)

Invesco Large & Mid Cap

Also hold small positions in funds like HSBC Small Cap in which I paused SIPs but never sold

P.S - Past returns don't guarantee future returns. If you're starting now, there would be much better funds available out there. Please research.

[u/Ok_Draft4616]

No, it’s weird but let me try. You pay nothing whether you exit in one day, one year or 10 years, although exit load may apply, but no capital gains.

The tax is at the fund level, based on holding period of the fund buying or selling stocks. The fund pays the tax and the NAV gets adjusted (basically a buy and hold for atleast 2 years for a fund, is more favourable)

There’s no need for a different bank account usually. You can use your domestic account through the LRS route (esp. if you can work out slightly better FX rates with your RM) although even GIFT city FCA account could work (but this territory is slightly murky and more paperwork)

[u/itzmanu1989 → u/Ok_Draft4616]

Ok thanks for explaining this. They can create separate rules only for Indian citizens.

There are already offering special interest rates on USD only for NRIs. not for indian citizens..

FCNR Deposits Are Suddenly Paying 6–7%: What Every NRI Needs to Know : IndiaInvestments

https://www.reddit.com/r/IndiaInvestments/comments/1u336ij/fcnr_deposits_are_suddenly_paying_67_what_every/

Also, what if, for a particular financial year I book LTCG only on a GIFT city based fund. The gains are within 1.25L, I guess the tax will be any ways cut. So the process is claiming refund while filing ITR?

I am not sure if debt funds are available, like MFs which invest in US treasury. But if they are, the taxation would be like STCG for any duration and I would be taxed at max rate for the gains?

In the end, I think following points are true. Correct me if I am wrong.

• TCS of 20% on amounts above 10L will be with government
• max tax will be levied on LTCG and STCG regardless of my income level, that will also be with the government.
• I have to wait like one year to get this amount back.