I want to invest in mutual funds via SIP. My target is ₹2 crore in next 20 years. I want to start with ₹4,000, per month, which can later on be increased. Please suggest a suitable portfolio.
You can start with investing ₹4,000 a month. However, if you just keep investing this same amount year on year, it would be tough to reach the target. You should consider increasing your systematic investment plan (SIP) amount every year so that you can effectively build your corpus. For example, if you’re able to increase your SIP amount by ₹3,000 each year, you should comfortably be able to accumulate your targeted corpus. You can start off with a more conservative portfolio and step up the risk and funds as you increase your SIP amount. For now, invest ₹3,000 in Franklin India Equity, a quality multicap fund and ₹1,000 in HDFC Short Term Debt. Later, you can consider adding more aggressive mid-cap funds such as L&T Midcap.
I’m investing ₹11,000 through SIP in these schemes: Axis Blue Chip fund ( ₹1,500), Axis Focus 25 fund ( ₹1,500), L&T Midcap fund ( ₹2,000), Mirae Asset Emerging Blue Chip fund ( ₹2,000), HDFC Small Cap Fund ( ₹1,000), L&T Emerging Businesses fund ( ₹1,000) and Axis Long Term Equity fund ( ₹2,000). I want to add an index fund via ₹1,000 SIP also. My goal is wealth creation. My time horizon is 10-12 years with moderately aggressive profile.
You have an aggressive portfolio with about half in mid-cap and small-cap oriented funds. For a moderately aggressive risk profile, this is on the higher side. For your time frame and risk, keep midcap and smallcap exposure to 25-30%. You also have duplicity in your Axis AMC funds. Axis Bluechip, Axis Focused 25, and Axis Long Term Equity share high portfolio similarities. Consider diverting the SIP in Axis Focus 25 into the index fund that you’re choosing to add now. You will thus be investing ₹2,500 in total here. Go for ICICI Prudential Nifty Next 50 for the index fund. You can hold all investments made in Axis Focus 25 so far. Ideally, you need to include a debt fund. You can consider HDFC Short Term Debt for this, up to 20% of your total SIP amount.
Srikanth Meenakshi is co-founder and chief operating officer, FundsIndia.com.