I earn about 70,000 each month and I have just one monthly EMI of 15,000. I am planning to invest some amount in systematic investment plans (SIPs). I want to invest in schemes that can give me good returns in the next five years. Could you suggest good schemes to invest in?

—Lokesh

SIPs are well-suited for long-term investments—especially those where one invests for seven to 10 years and waits for some more time before starting to withdraw, ideally using a systematic withdrawal plan (SWP).

When one puts a relatively short time frame such as five years for SIP investments and tries to withdraw the money once the tenure is over, it means that the last few instalments of the SIP would have had barely a few months of being invested in the market before getting withdrawn. Such tenures and expectations do not suit SIP investments well.

In your case, you have indicated that you would like to invest for five years and get good returns. If you continue your SIP for five years and then wait for some more time before taking your money out systematically, you can have a healthy mix of funds that would optimize your returns. For example, you can invest in equity funds such as Mirae Asset Emerging Bluechip fund, ICICI Prudential Bluechip fund, and hybrid funds such as Canara Robeco Equity hybrid fund for such a plan.

On the other hand, if you need your money back right after five years, you should invest in a lower risk portfolio of just hybrid funds such as ICICI Prudential equity and debt funds such as IDFC Regular Savings fund along with the aforementioned Canara Robeco hybrid fund.

Srikanth Meenakshi is co-founder and former chief operating officer, FundsIndia.com. Queries and views at mintmoney@livemint.com

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