I have savings of around Rs 15 lakh. I would like to start a SIP and also invest a lumpsum to park this amount. I am looking for distribution in all the categories of mutual funds— small, mid, multi and large cap mutual funds for 3 to 5 years. I expect to achieve Rs 25 lakhs. Which fund should I choose?
— Sujit Roy
Harshad Chetanwala, Co-Founder of MyWealthGrowth, a financial planning firm, Based out of Mumbai, responds:
When you are looking to invest in the stock market, you should have a long-term horizon i.e. minimum tenure of 5 to 7 years. If your minimum tenure is 3 years then you are expecting your one-time investment of Rs 15 lakhs to grow every year by nearly 19% to achieve the target of Rs 25 lakhs. To achieve this target in 3 years is quite an aggressive expectation from equities.
It would be good to keep the target of Rs 25 lakh for a 5 years horizon which can be achieved if the portfolio generates an average of around 11% every year.
For the time horizon of 5 years, you can look at investing in large, large & mid cap and flexi cap funds. Allocation in mid cap and small cap funds works well for longer investment horizons as they are more volatile in a shorter period compared to other funds. You may consider the following funds:
You may set up your SIPs in the above funds.
— Sujit Roy
Harshad Chetanwala, Co-Founder of MyWealthGrowth, a financial planning firm, Based out of Mumbai, responds:
When you are looking to invest in the stock market, you should have a long-term horizon i.e. minimum tenure of 5 to 7 years. If your minimum tenure is 3 years then you are expecting your one-time investment of Rs 15 lakhs to grow every year by nearly 19% to achieve the target of Rs 25 lakhs. To achieve this target in 3 years is quite an aggressive expectation from equities.
It would be good to keep the target of Rs 25 lakh for a 5 years horizon which can be achieved if the portfolio generates an average of around 11% every year.
For the time horizon of 5 years, you can look at investing in large, large & mid cap and flexi cap funds. Allocation in mid cap and small cap funds works well for longer investment horizons as they are more volatile in a shorter period compared to other funds. You may consider the following funds:
You may set up your SIPs in the above funds.
