I am 31 years old and have started investing in mutual funds in the last two years. i want to make one 2 crore corpus in 15 years, moreover 1 crore for the education of my 2 year old daughter. So far, I have invested 4 lakhs in mutual funds. i am investing The SIPs towards the following funds include 30,000-Quant Active Fund, Nippon India Small Cap Fund, Tata Digital India Fund and Nippon India Pharma Fund. Please tell me how much should I invest in SIP every month?
– Name withheld on request
If we map your existing portfolio 4 lakhs for daughter’s education, then you have to invest 18,000 every month for the next 16 years to create a corpus of Rs. 1 crore at 10% p.a.
If we assume a return of 12% p.a., then you have to invest 14,000 per month. Similarly, for your wealth creation, you need to do SIP 50,000 if the portfolio return is 10% p.a. and 42,000 if the return is 12% p.a., assuming a horizon of 15 years. you have to invest from 56,000 68,000 every month to achieve both the objectives.
It may seem difficult at present because you are investing 30,000 every month. However, if you increase this SIP amount by 12% every year then you too will be able to achieve both these goals.
You can try to create a better mix of funds in your portfolio. Since you started investing in the last few years, when the market was performing well, the selection of funds appears to be based on near-term performance, which is not the best way to invest in mutual funds.
You are investing in thematic and sectoral funds like digital and pharma, which can be avoided at this stage as these funds carry more risk and are more volatile. You can consider the following funds to diversify across market capitalization and sectors as well. UTI Nifty Index Fund (20%), Mirae Asset Large Cap (20%), Parag Parikh Flexi Cap (20%), Canara Robeco Emerging Equity (20%), Nippon India Small Cap Fund (10%), Quant Active Fund ( 10%).
Harshad Chetanwala is the co-founder of MyWealthGrowth.com.