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I would like to invest 2,000 in a mutual fund growth option for the next 10 years. What are my options?

—Name withheld on request

 

When you are investing in one fund using a relatively low monthly systematic investment plan amount, it is important that you choose a fund that gives a ‘broad’ exposure. Now, this term ‘broad’ could mean two things, and your fund choice will depend on which meaning you choose. One, you could seek breadth in terms of asset classes—that is, seek a fund that invests in both the equity market as well as the debt market (and/or gold). In that case, you would choose a hybrid fund or a multi-asset fund. A fund such as DSP Equity and bond fund would fit the bill if you are seeking a moderate risk profile for your long-term investment.

On the other hand, if you choose to go aggressive, you would want to have coverage in terms of breadth of equity markets—both domestic and overseas. That is, you would want a fund that invests freely in both Indian stock market and overseas stock market. If you are taking this route, a fund such as Parag Parikh Flexi-cap Fund would be a good choice.

Srikanth Meenakshi is founder, Primeinvestor.in.

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