Increase your SIPs as income grows2 min read . Updated: 10 Feb 2020, 12:50 PM IST
- Having one fund is good enough
- It is good to consider long-term investment and take risk for them
I am 30 years old, married and expecting a child. I invest ₹20,000 in mutual funds and ₹10,000 in Public Provident Fund. I invest ₹4,000 each in Mirae Asset Emerging Blue Chip, SBI Bluechip and ABSL Focused Equity; ₹2,000 each in Frontline Equity, ABSL Tax Relief 96 and HDFC Hybrid Equity; and ₹1,000 each in DSP Tax Saver and Axis LT Equity. My goals are buying a car in five years ( ₹15 lakh), buying a flat in 10 years by adding a corpus of ₹20 lakh to a loan of ₹50 lakh, and to build a corpus of ₹15 lakh after 15 years for my child’s education. Are my goals on track?
Your current investments in mutual funds are spread across eight schemes, of which two are large-caps and both are underperformers. Having one fund is good enough; you can opt for Axis Blue Chip Fund. You have a large-and-mid-cap fund, which can be continued. One scheme is in the focused category; this can be stopped and you can instead consider SBI Focused Equity. There are three schemes in tax-saving funds; continue only Axis Long Term among the three. One hybrid equity fund can also be held. This way you will have five funds in your portfolio.
You will be able to achieve your financial goals but for that you need to be consistent and disciplined in your investments. Also, increase your annual investments as your income grows.
I’m a 20-year-old IT employee with monthly savings of ₹8,000-10,000. I want to invest ₹5,000-6,000 per month, keeping some amount for emergency. I don’t need the money for at least five years. Can you suggest ways to earn high returns? I can take high risk as I have a time frame of five years.
It is good that you are considering long-term investment and are willing to take risk for your investments. Investing a monthly amount of ₹6,000 for, say, five years (though you should be investing for as long as you are working) will make you accumulate a principal of ₹3.6 lakh. At an earnings rate of 12%, this will grow to ₹4.9 lakh. As your saving pattern is fixed, you can start SIPs in equity-based mutual funds where you can spread exposure in large-cap (Axis Large Cap is a good option), large-and-mid-cap (where you can pick Mirae Asset Emerging Blue Chip), multi-cap (DSP Equity has been a consistent performer) and mid-cap (Kotak Emerging Equity Fund has done well).
Surya Bhatia is managing partner of Asset Managers