Systematic investment plan (SIP) is considered to be the best option for investment in mutual funds, but now the smart SIP has pipped SIP to emerge as a better investment tool.
In fact, investments under smart SIP are made considering the market move, whereas investment in regular SIP are made in selected funds in every situation
Through smart SIP, you can invest in liquid funds during high risk, and increase your investment in equity when the risk is low. In this way, smart SIPs get higher returns.
Under smart SIP, parameters are set to determine the value of a scheme, and the risk status is measured through Net asset value (NAV).
If the margin of safety is low, then the fund will be invested in safe option. In such a situation
SIP is put in liquid funds, and if the safety margin is good, then the money will be invested in equity.