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Mutual Fund Corner. Q: 35-year-old Meshach John writes us from Bengaluru. For my retirement, I am investing Rs 7,000 per month in Reliance Small Cap Fund Growth (Rs 3,000 per month), HDFC Small Cap Fund Regular Growth (Rs 2,000 per month) and L&T Large Cap Fund Growth (Rs 2,000 per month) for nine months, with a goal of Rs 3 crore in 25 years. Will I be able to achieve my goal with this portfolio? If no, what are the changes to be done to the existing portfolio or what additional investment to be done? I have a child of five months old and for education, I would need Rs 2 lakh in two years, Rs 5 lakh in five years and Rs 50 lakh in 18 years. How much investment to be done and what funds to invest?
A: You will need to increase your SIP amounts every year by 15 percent in order to comfortably achieve your goal of Rs 3 crore in 25 years with adequate buffers.Existing Portfolio:
Fund Morningstar Category Morningstar Rating Overall 1 year 3 years 5 yea rs HDFC Small Cap Small-Cap ÙÙÙ -7.84 18.00 20.17 Reliance Small Cap Gr Small-Cap ÙÙÙÙ -17.05 15.16 26.04 L&T India Large Cap Fund Gr Large-Cap ÙÙÙ -1.66 10.90 13.96
Currently, skewed towards small cap stocks, we recommend increasing allocation towards large and multi-cap funds as you increase your SIP amounts.Here are some good options:
Fund Morningstar Category Morningstar Rating Overall 1 year 3 years 5 years Aditya BSL Frontline Equity Large-Cap ÙÙÙÙ -3.69 12.12 15.37 HDFC Top 100 Large-Cap ÙÙÙÙ -0.72 16.57 15.79 ICICI Pru Bluechip Large-Cap ÙÙÙÙ -2.17 13.84 15.27 Franklin India Equity Multi-Cap ÙÙÙÙ -4.77 10.69 16.95 Kotak Standard Multicap Multi-Cap ÙÙÙÙ 0.18 15.63 19.60 Mirae Asset India Equity Multi-Cap ÙÙÙÙÙ 0.93 17.25 19.49
Good to know you have broken up your goals individually and planning for each separately.Here is how you can achieve these goals individually:
Goal Investment Type Amount Funds Goal 1 2 lacs in 2 years Lumpsum 1.75 lakhs Short Duration Funds/Corporate Bond Funds Goal 2 5 lacs in 5 years SIP 8000/pm Short Duration Funds/Corporate Bond Funds (40%) & Large Cap Equity Funds (60%) Goal 3 50 lacs in 18 years SIP 9000/pm Short Duration Funds/Corporate Bond Funds (20%) & Large Cap Equity Funds + Mid Cap Funds (60%) Debt fund recommendations:
Fund Morningstar Category Morningstar Rating Overall 6 months 1 year 3 years ICICI Pru Short Term Short Duration ÙÙÙÙ 3.41 6.12 7.59 Kotak Bond S/T Short Duration ÙÙÙÙ 3.70 6.68 7.17 Kotak Banking and PSU Debt Banking & PSU Debt ÙÙÙÙ 4.00 6.85 7.60 SBI Banking and PSU Banking & PSU Debt ÙÙÙÙ 3.40 7.01 7.22 Aditya BSL Corporate Bond Corporate Bond ÙÙÙÙ 4.22 7.37 7.86 HDFC Corporate Bond Corporate Bond ÙÙÙÙ 3.88 6.78 7.83 Click here to watch the full episode of Mutual Fund Corner
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