I invest ₹2,000 each in systematic investment plans (SIPs) of HDFC Top 100, Kotak Standard Multicap, Mirae Asset Large Cap Fund Regular, Franklin India Equity, SBI Focused Equity, SBI Magnum Global, SBI Small Cap Fund, ICICI Prudential Value Discovery and Aditya Birla Sun Life Frontline Equity Fund Regular. All are growth options. I invest around ₹20,000 per month and can increase it to ₹25,000 per month. I want to build a corpus of ₹50 lakh in the next five years when I am due for retirement. Will SIPs of ₹25,000 per month be enough to build the required corpus? Are the funds I invest in good or would you like to suggest any changes? At present, the market value of my investment is around ₹3.30 lakh and I can take moderate risk. Also, how much return can one expect in the present context at the end of five years? I also invest ₹50,000 in National Pension Scheme (NPS) to avail of tax benefit. Will it be prudent to continue it?
Your SIP amount of ₹25,000 a month and annual NPS investment of ₹50,000 will not be enough to reach your goal of ₹50 lakh in five years. Assuming a moderate return of 12% annually, you will most likely reach around ₹28 lakh-30 lakh by the time you retire. In order to reach your goal, you will either have to increase your monthly investment to ₹45,000-48,000 or increase your horizon by another three years.
Continue with your investment in NPS if you are paying less tax in the old tax regime. If your tax implication is lower in the new tax regime, contribute only the minimum to NPS and shift the remaining to your SIP.
At present, you have too many funds, and no debt scheme. You should restructure your SIPs as follows. Stop SIPs in HDFC Top 100, Franklin India Equity, ICICI Prudential Value Discovery, Aditya Birla Sun Life Frontline Equity and SBI Magnum Global. Hold all investments made so far. Increase the SIP amount to ₹5,000 each in Kotak Standard Multicap and Mirae Asset Large Cap; to ₹4,000 in SBI Focused Equity; and ₹3,000 in SBI Small Cap. Start an SIP of ₹8,000 in Aditya Birla Sun Life Corporate Bond fund. This will give you an equity: debt ratio 68:32, which is prudent, given your time frame and risk appetite.
Should I invest via a direct or regular mutual fund SIP? Are there any websites through which I can invest directly in funds?
There are several websites for both direct and regular investing needs. Websites such as Kuvera, Groww and Zerodha Coin cater to direct investing, while sites such as FundsIndia and Scripbox facilitate regular investing.
If you invest in regular plans, make sure you get advice on portfolio planning and review the suggestions on a periodic basis. For direct investing, ensure you get help and guidance from a source such as a registered investment adviser or online research and recommendation websites. You can also follow the curated Mint50 list to make your fund choices. One way or another, you should make sure that you get some help and guidance with your investing and don’t just rely on self-research.
Srikanth Meenakshi is co-founder, PrimeInvestor.in. Queries and views at email@example.com