I am 32 years old and I started investing in mutual funds in 2017. I invest ₹2,500 each in ICICI Bluechip and Franklin India Focused Equity; ₹3,000 each in Axis Long-term ELSS, Mirae Asset India Equity (multicap) and IFDC tax advantage ELSS. I also invested lump sums of ₹25,000 in ICICI Pru Balanced and ₹32,000 in ICICI Value fund series 19. I also invest ₹15,000 in Public Provident Fund every year. I am planning to start a systematic investment plan (SIP) in Reliance Small Cap for ₹2,500. My target is to accumulate ₹10 crore by age 55. Please help me fine tune my investments.
To reach your target of ₹10 crore in 25 years (including the two years that have passed since you started investing), the main thing that needs to change is the amount of money you are investing. You are currently investing ₹14,000 and plan to add another ₹2,500. However to get to your target, assuming an aggressive 12% annual return over the 25-year period, you would need to invest close to ₹60,000 a month. So the sooner you can add substantially to your monthly investments, the better. Else, you could adjust your goal lower. If, for example, you invest ₹25,000 a month over this period, you would end up with close to ₹5 crore. Or, you could simply invest the most you can by adding to your SIP every year, and adjust your goal as you go along—which might be the most practical thing to do.
Regarding funds, you are investing mostly in multi-cap funds (ELSS funds are diversified multi-cap funds in terms of market coverage), which is not a bad for a long-term portfolio. You have one small-cap fund, one large-cap fund, and a focused fund (which also, in a way, is a diversified fund). So, there’s nothing wrong per se with your portfolio. Please avoid investing in closed-end funds, and divert your surplus to your SIP portfolio.
Srikanth Meenakshi is co-founder and chief operating officer, FundsIndia.com
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