I'm an investor with a moderate risk appetite. I have two financial goals—a short-term goal to create ₹2 lakh in 2.5 years and a mid-term goal to create ₹25 lakh in five years. I have been investing for the past one year in the following funds recommended by my friend. This is the current value of these funds—Edelweiss Mid Cap fund ( ₹30,000), SBI Equity Hybrid fund ( ₹30,000), IDFC Tax Saver fund ( ₹30,000) and Aditya Birla Tax Relief ‘96 ( ₹1 lakh). SIP of ₹10,000 is equally split between all the above four mutual funds. Do you think it is appropriate for my goals?
At present, you have ₹1.9 lakh as invested corpus and additionally, you also have a ₹10,000 SIP running every month. For your short-term needs of ₹2 lakh, the growth of your current corpus would suffice. It would grow to about ₹2.20 lakh to ₹2.30 lakh by then, hopefully, and you can take ₹2 lakh out of that. For your longer term goal in five years, you will fall short of your corpus with the level of your current monthly investment. To get to a ₹25 lakh goal in five years, assuming (rather generously given the short time frame) a 12% annual return, you would need to save and invest ₹30,000 a month.
Regarding your portfolio, it is a very aggressive portfolio considering the relatively short time frame that you are investing for. If you are going to be adding funds to your SIP, I would suggest that you bring in an ultra short-term bond fund or a savings (debt) fund into the mix to the extent of 20-30% of the allocation. About the funds themselves, they are a reasonably fine mix. There are better options in the mid-cap segment such as L&T Midcap fund and DSP Midcap fund. You may also want to bring in a diversified fund such as Kotak Standard Multicap to provide more diversity to your holdings.
Srikanth Meenakshi is co-founder, PrimeInvestor.in. Queries and views at email@example.com