DSP Tax Saver Fund: Rs 3,500
ICICI Prudential Bluechip Fund: 2,500
Nippon India Small Cap Fund: Rs 2,500
Mirae Asset Tax Saver Fund: Rs 3,500
SBI Flexicap Fund: 1,000
SBI Equity Hybrid Fund: Rs 2,000
SBI Focused Equity Fund: Rs 2,000
SBI Magnum Children Benefit Fund: Rs 4,000
I want to create Rs 1 crore after 15 years. Please tell me whether these funds are okay.
–Sonam Goyal.
You have not shared details like your risk profile and when you started to invest. Without complete details it is not possible to offer accurate advice. So, here are some pointers you may find helpful. One, you are investing in too many schemes. Two, investing a small amount in too many schemes is not going to offer the benefit of diversification and maximise returns. You are investing in four schemes of SBI Mutual Fund. This increases concentration risk.
We always ask investors to choose their mutual fund schemes based on their goals, investment horizon, and risk profile. For example, if you have a conservative risk profile, and you are looking to invest for a long time, you should invest in large cap mutual funds. If you have a moderate risk profile, you can invest in flexi cap funds. If you have an aggressive risk profile, you can invest in mid cap, small cap, sector schemes, depending on your risk appetite.
As said earlier, you don’t need to invest in every possible mutual fund category to achieve optimal diversification and maximise returns. The basic idea behind diversification is to spread your investments across different asset classes based on your goals and risk appetite. Investing in too many schemes often results in over diversification and it may also dilute your returns. An average investor needs only three or four schemes to achieve good diversification.
If you don’t understand much about mutual funds and investing, you should take the help of a mutual fund advisor. Gain knowledge and experience before taking care of your portfolio.
Assuming an annual return of 12%, you need to invest around Rs 19,818 every month to create a corpus of Rs 1 crore in 15 years. However, don’t bank on round figures like Rs 1 crore to take care of your goals. Always work with real numbers and inflation to calculate realistic targets and have an investment plan to reach the target.
