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I invest in monthly systematic investment plans (SIPs) of Mirae Asset Emerging Bluechip ( ₹5,000), Axis Small Cap ( ₹2,000), Mirae Asset Mid Cap ( ₹5,500) and Axis Multi Cap ( ₹2,500). I plan to stay invested for over two decades. Does my portfolio need any changes?
You are investing ₹15,000 a month with a third of it going to a large-cap fund, a sixth going to a multi-cap, and the remaining 50% going to mid- and small-cap segments. For a long-term portfolio, this is appropriately aggressive with 100% equity allocation. In terms of funds, you can do with more diversity in terms of mutual fund houses. Mirae Asset Mid Cap is less than a year old. There are more established mid-caps in the market such as DSP Midcap and L&T Midcap, that you could consider. Similarly, for multi-caps, you can consider Aditya Birla Sun Life Equity or Kotak Standard Multi-cap fund.
I started investing three months ago. I’m investing in Mirae Asset Emerging Bluechip ( ₹3,000) and Aditya Birla Sun Life Floating Rate Fund ( ₹1,000) via SIPs. I also made a one-time investment of ₹5,000 in UTI Nifty Index Fund. My goal is to raise ₹60 lakh for education, and my risk appetite is moderate. Am I on the right track?
Your investment amount of ₹4,000 a month will take an impractically long time to translate into the goal amount. If your goal is to have ₹60 lakh in, say, 10 years, and assuming an aggressive annual return of 12%, you would still need to save and invest around ₹25,000 every month during this period. So my advice would be to recalibrate either your goal, time frame, or your investment amount to make the growth arithmetic work. For example, you could adjust your goal to, say, ₹25 lakh in 10 years, and increase your SIP investment to ₹10,000. In that case, a good four or five fund portfolio, including the funds you are holding, will enable you to accumulate your target corpus. Investment arithmetic trumps fund choices when it comes to goal-oriented financial planning.
Srikanth Meenakshi is co-founder, PrimeInvestor.in.