Topic 2 of 9~5 min read

Trigger SIP

Definition

Trigger SIP is a conditional SIP where investments are made only when certain pre-set market conditions are met — such as a specific index level, NAV threshold, or percentage market movement. It combines the discipline of SIP with tactical market-awareness.

In Simple Words

Unlike regular SIP which invests on a fixed date regardless of market, Trigger SIP activates only when your conditions are met. For example: "Invest ₹10,000 whenever Nifty falls 3% from its recent high." This strategy can potentially improve entry points but requires more monitoring and market understanding.

Real-Life Scenario

Prakash sets up a Trigger SIP: "Invest ₹20,000 in a Nifty index fund whenever Nifty falls 5% from its 52-week high." Over a year, instead of 12 fixed monthly investments, his trigger activated 6 times during market dips. His average NAV was significantly lower than someone investing on a fixed date.

Key Points to Remember

Trigger SIP invests only when pre-set conditions are met

Conditions can be based on index level, NAV, or percentage movement

Potentially better entry points than regular SIP

Not available on all platforms — limited AMC support

Risk: If market keeps rising, no investments are made

Best used as supplement to regular SIP, not replacement

Requires understanding of market conditions and indicators

May result in irregular investment pattern and missed months

Frequently Asked Questions

Test Your Knowledge

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What is the main risk of relying solely on Trigger SIP?

Summary Notes

Trigger SIP adds tactical overlay to disciplined investing

Best used as supplement, not replacement for regular SIP

Risk of inaction during bull markets

Requires market understanding to set effective triggers