Many investors plan to increase their monthly contributions to systematic investment plans (SIPs) at the start of the new year. This could be due to a salary hike, a rise in business income, or allocating more due to higher comfort with mutual funds.HOW CAN AN INVESTOR INCREASE THE MONTHLY SIP CONTRIBUTION?
Investors can increase their monthly SIP contribution by adding money to their existing scheme or choosing a new fund for their portfolio. They can opt for a scheme from any asset class—equity, fixed income, or precious metals. The additional SIP can begin on any date that is convenient for you. Choosing different dates helps spread the investments over the month.

THERE ARE SEVERAL NEW FUND OFFERS (NFOs) WHICH ARE ATTRACTIVELY POSITIONED. CAN THE HIGHER SIP GO INTO THEM?
While there are many well-marketed NFOs, investors should not get carried away since many of these are launched by fund houses to fulfil their product basket or cash in on exciting themes in the market. They should opt for an NFO only if such a product is not available with another fund house or if there is a compelling proposition for their portfolio. It is better to choose a new fund from the existing schemes that have a track record

DO YOU NEED TO ADD A NEW SCHEME WHILE INCREASING YOUR SIP AMOUNT?
Investors should build their long-term mutual fund portfolio based on age, risk-taking ability and long-term goals. This can be done by following an asset allocation approach and diversifying across assets like equity, gold, fixed income and REITs / InvITs. They could use a mix of active and passive funds to build their portfolio. While the core portfolio should be in long-term-oriented fund categories, they could have some thematic, sectoral funds in their satellite portfolios for alpha generation. Take the case of an investor who has a monthly SIP of Rs 10,000 SIP, of which Rs 7,000 is in flexi-cap, Rs 2,000 in fixed-income and Rs 1,000 in gold. If he wishes to raise the SIP by Rs 2,000 per month, he could opt for a thematic or sectoral fund, while if conservative he could opt for a hybrid fund that is low on equity. The other option is to divide the money among existing schemes.WHAT SHOULD INVESTORS FACTOR IN WHILE STARTING A NEW SIP?
Investors should remember the basic rules of investing when they start a new SIP. If it is in an equity scheme, have a time frame of at least 5-7 years and don’t be unnerved by interim volatility. They should not withdraw money from their equity corpus to fund new SIPs. Should they need money 1-2 years down the line, they should not start a new SIP in an equity mutual fund but opt for a fixed-income or hybrid fund.