FundsIndia has always sought to do one thing— and that is to add value to our services, and not just be a distributor of products. We believe that there is a distinct opportunity for service providers to deliver services that are not possible for the individual fund companies to offer and too difficult for individual customers to create themselves. A current example of this is the trigger facility we offer across funds. 

We are happy to add to our stable of value-added services a new offering—Value-cost averaging investment plan (VIP), an investment protocol developed by a Harvard University professor. This is slightly different from SIP in that the monthly investments vary between a minimum and a maximum based on a formula which takes the performance of the fund into consideration. This method promises better returns than SIP at the same risk level. 

We back-tested this protocol across four different prominent equity funds over the past five years. What we found was that VIP outperformed SIP on an average by about 1.6% CAGR for an average holding period of three-years.  

The basic idea of the formula behind VIP is to invest more when the markets are low, and less when the markets are high. It does this by targeting a value for the portfolio, and hence the name. Signing up for VIP will be similar to signing up for SIP - just a couple of more inputs from you.  

To read our detailed article on VIP using Equity Funds, please click here:  http://www.fundsindia.com/documents/VIP-FundsIndia.pdf

For more information on VIP, please refer to http://www.investopedia.com/terms/v/value_averaging.asp 

Happy Investing!