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I am 36 years old and am a moderate risk taker. I want to start investing in mutual funds through a systematic investment plan (SIP). I save 15,000 per month, of which I wish to invest 10,000 in an SIP for at least 10 years. Which would be the best SIP for me to invest in for a tenure of 10 to 15 years? Also, should I directly invest in an SIP or go through a financial planner for investment?

—Satnam Singh

 

You have a moderate risk appetite and hence you need to ensure that the investment to be done can generate returns that are inflation-adjusted. A pure debt structure cannot deliver this. Also, as your investment horizon is long, equity allocation, albeit on a lower side, can be considered. You can consider a balanced advantage fund, which can change the equity exposure based on market valuations. So, at times when the market valuation turns expensive, they will reduce the equity exposure, and vice-versa will also hold true.

And it is always good to have a financial planner by your side who can guide you through the up and down cycles of markets and can help you make a rational decision.

Only if you believe these decisions can be taken by yourself, should you consider investing all by yourself.

 

I recently closed my public provident fund (PPF) account, which had 60,000 including interest. Now, I want to save this amount for my two daughters. Where can I invest this amount? Should I open children’s accounts for them? I may also contribute some amount on a monthly basis to their accounts. Also, will investments made for children help me save taxes?

—Wasim Syed

 

There are some investments that will save you taxes. To start with, you can open PPF accounts in your daughters’ names. The annual contribution for PPF in a minor’s account is clubbed in the hands of major i.e., yourself in this case. The annual limit is capped at 1.5 lakh towards deposit of PPF. You can also consider Sukanya Samriddhi Yojana, which is available for girl children under 10 years of age. The scheme is locked in for 21 years, but the investment is to be made for 15 years from the date of opening of account. In this scheme also, the contribution is capped at 1.5 lakh per annum. You can also consider doing an equity linked savings scheme in your name, which has a lock-in of three years. But, you should consider holding the investment for longer as equity asset class carries inherent risk.

Surya Bhatia is managing partner of Asset Managers.

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