Q1) I am new to mutual funds. I need ₹50 lakh in 8-10 years. Kindly tell me how much I should invest and where?
Name withheld on request
We suggest you build an equity-oriented portfolio post keeping 10% of the portfolio in money market funds to take care of contingencies. Equity as an asset class has the potential to deliver superior returns over a longer time frame. One may invest either through lumpsum or SIP mode in equity-oriented mutual fund schemes. To build a corpus of Rs.50 Lakhs in 10 years, one needs to make a monthly SIP amount of Rs.22000 (Assuming a CAGR return of 12%). You can think of building the portfolio with a healthy mix of funds from Large & Mid Cap, Flexi Cap, Mid Cap and Value categories of equity. It is advisable to divide the monthly SIP amount (Rs.22000) equally among Axis Growth Opportunity Fund, HDFC Large & Mid Cap Fund, Parag Parikh Flexi Cap Fund, UTI Flexi Cap Fund, Mirae Asset Mid Cap Fund and IDFC Sterling Value Fund. This way your portfolio will be diversified across the category, geography, and AMCs.
Q2) Hi, I need 15 lakh in 6 years, and for that I have started SIPs of ₹1,000 in Axis bluechip fund and Nippon India small-cap. Besides, I have started a SIP of ₹2000 in the Parag Parekh Flexi cap.
Name withheld on request
To build a corpus of ₹15 Lakhs in 6 years, one needs to make a monthly SIP amount of Rs.15000 (Assuming a CAGR return of 12%). So, you need to either increase your investment horizon or increase the monthly SIP amount (on the existing SIP amount of Rs.4000) to achieve your desired goal. Equity as an asset class has the potential to deliver a superior return in the long run. We suggest the additional SIP amount equally divided among the funds from Large & Mid Cap, Flexi Cap, Mid Cap and Value categories of equity. Suggested funds are Canara Robeco Emerging Equity Fund, Axis Growth Opportunity Fund, UTI Flexi Cap Fund, Kotak Emerging Equity Fund and IDFC Sterling Value Fund. It is also advisable to review your portfolio at least once a year.
Queries answered by Sanjiv Bajaj, joint chairman and MD, Bajaj Capital.
Queries and views at mintmoney@livemint.com
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Published: 21 Feb 2022, 09:33 AM IST