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Mutual Fund Corner. Q: 29-year-old Nikhil Jain writes to us from Mumbai. Below are my goals, please suggest funds and SIP amount? 1. Rs 20 lakh in 16 years for child's education. 2. Rs 50 lakh in 20 years for child's higher education. 3. Rs 1 crore in 26 years for child's marriage. 4. Rs 4. 7 crore in the next 30 years for retirement.
A: So, you have clearly stated your investment objective.
1. So for child education where you need Rs 20 lakh in 16 years, the SIP amount could be around Rs 3,500 per month.
2. For the child’s higher education, where you require Rs 50 lakh in 20 years, the SIP amount could be roughly Rs 5,000 per month.
3. For your child’s marriage for which you want to accumulate Rs 1 crore in 26 years, the SIP amount could be 5,000 per month
4. For a retirement corpus of Rs 7 crore in 30 years, the SIP amount should be Rs 20,000 per month.
While you have clearly defined your investment objective, there are other important parameters that need to be looked into before making investments. Parameters such as your financial strength, your income, expenditure, liabilities and current investments if any among others help decide your risk appetite and the right asset allocation mix.
However, given these information’s are not available with me, I will try to give suggestions based on some assumptions. Ideally, investments should be diversified across asset classes and market segments. It’s important to have the right asset allocation. So for moderate risk-taking investor equity is 50-60 percent and the balance in debt funds.While investing in the core portion of the portfolio should comprise of large-cap stocks as they provide stability to the fund during testing times. Some of the funds which you can consider investing from the large, mid and small cap categories are –
Group/Investment Morningstar Analyst Rating Morningstar Rating Overall Return (in %) 1-Yr 3-Yr 5-Yr India OE Large-Cap Franklin India Bluechip Gr Gold ÙÙÙ -2.21 12.52 12.80 HDFC Top 100 Gr Gold ÙÙÙÙ 1.09 19.16 14.60 Aditya BSL Frontline Equity Gr Silver ÙÙÙÙ -2.56 14.35 14.35 ICICI Pru Bluechip Gr Silver ÙÙÙÙÙ -0.63 16.87 14.42 Reliance Large Cap Gr Silver ÙÙÙÙ -0.17 17.82 16.53 SBI Bluechip Reg Gr Bronze ÙÙÙÙ -4.34 12.70 14.88 UTI Mastershare Unit Reg Gr Bronze ÙÙÙ -0.09 14.31 13.68 India OE Small-Cap DSP Small Cap Reg Gr Silver ÙÙÙÙ -23.85 12.03 21.97 Franklin India Smaller Companies Gr Silver ÙÙÙÙ -17.81 13.19 20.64 HDFC Small Cap Gr Bronze ÙÙÙÙ -10.93 22.20 19.36 India OE Mid-Cap Franklin India Prima Gr Gold ÙÙÙÙ -8.18 15.31 20.59 HDFC Mid-Cap Opportunities Gr Gold ÙÙÙÙ -10.69 16.23 19.33 DSP Midcap Reg Gr Silver ÙÙÙ -9.31 17.95 20.38 Aditya BSL Mid Cap Gr Bronze ÙÙÙ -15.57 13.21 17.60 ICICI Pru Midcap Gr Bronze ÙÙÙ -13.57 14.51 18.63 SBI Magnum Midcap Reg Gr Bronze ÙÙ -15.44 9.34 16.01 Sundaram Mid Cap Gr Bronze ÙÙÙ -15.62 14.58 20.01 On the fixed income side, you can consider investing in funds from the ultrashort, low duration, corporate bond and short term bond categories. However, you should check whether the fund takes credit bets or not and invest only after understanding their investment proposition.
Group/Investment Morningstar Analyst Rating Morningstar Rating Overall Return (in %) 1-Yr 3-Yr 5-Yr India OE Ultra Short Duration Franklin India US/T Bd Retl Gr Gold ÙÙÙÙÙ 8.71 8.43 8.72 Kotak Savings Fund Reg Gr Bronze ÙÙÙÙ 7.79 7.51 8.05 India OE Low Duration Franklin India Low Duration Gr Silver ÙÙÙÙÙ 8.93 9.08 9.27 ICICI Pru Savings Gr Silver ÙÙÙÙÙ 7.56 7.85 8.31 Reliance Low Duration Gr Bronze ÙÙÙÙÙ 7.80 7.60 8.00 Reliance Low Duration Retl Gr Bronze ÙÙÙÙ 7.29 7.12 7.57 India OE Short Duration Franklin India S/T Income Gr Silver ÙÙÙÙÙ 8.87 9.28 9.22 ICICI Pru Short Term Gr Bronze ÙÙÙÙÙ 6.45 7.76 8.49 Kotak Bond S/T Reg Gr Bronze ÙÙÙÙ 7.04 7.27 7.95 Reliance Short Term Gr Bronze ÙÙÙÙ 6.25 7.06 8.04 India OE Corporate Bond Aditya BSL Corporate Bond Reg Gr Silver ÙÙÙÙ 7.66 7.93 8.70 HDFC Corporate Bond Gr Bronze ÙÙÙÙ 7.25 7.97 8.63 Reliance Prime Debt Gr Bronze ÙÙÙÙÙ 7.38 7.65 8.14
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