Will these mutual funds help me to build a corpus of Rs 2 crore?
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ICICI Prudential Bluechip Fund: Rs 2,000
ICICI Prudential Equity & Debt Fund: Rs 1,000
Kotak Emerging Equity Scheme: Rs 1,000
L&T Emerging Businesses Fund: Rs 3,000
L&T India Value Fund: Rs 1,200
L&T Midcap Fund: Rs 1,000
SBI Magnum Multicap Fund: Rs 1,000
Mirae Asset Emerging Bluechip Fund Rs 4,000
Tata Digital India Fund: Rs 1,000
Mirae Asset Tax Saver Fund: Rs 1,000
Tata India Tax Savings Fund Rs 1,000
Aditya Birla Sun Life Tax Relief 96: Rs 1,000
I am looking to invest for the long term, say, 15 to 20 years. Also, I want to withdraw some amount after 5 to 6 years to buy a house. I want some investments in ELSS to save some taxes. I also want to build a corpus of Rs 2 crore after 15 years.
Is my mutual fund portfolio overdiversified? Or do I need to add a few more schemes? I am also investing 10% of my basic salary in NPS, and Rs 500 SIP in Reliance Liquid Fund, along with Rs 1,000 in recurring deposit.
Puneet Oberoi, Founder, Excellent Investment Advisors, responds:
You are investing Rs 18,700 per month: Rs 17,200 in equity schemes and Rs 1,500 in debt schemes.
You must invest Rs 40,000 per month in equity mutual funds to create a corpus of Rs 2 core in 15 years. I am assuming an annual return of 12 per cent.
You should either recheck your goals or increase your investment amount. You can also increase your investment horizon. Your financial goals should be SMART. That is, specific /measurable /achievable /relevant /time-bound.
As far as your portfolio is concerned, most of the schemes you have chosen might hold common stocks.
My suggestion to you would be to stop SIPs in all these funds. Let the money invested stay in them. Start new SIPs in these schemes:
Kotak Standard Multicap Fund: Rs 5,000
Axis Midcap Fund: Rs 5,000
Mirae Asset Emerging Bluechip Fund: Rs 4,000
Axis Long Term Equity Fund (for tax savings): Rs 3,000
If you are a conservative investor and cannot handle the volatility in the market, you can invest in balanced advantage funds. These schemes may give you 1-2 per cent less returns than equity mutual funds. You may consider investing in these balanced advantage schemes:
Kotak Balanced Advantage Fund
ICICI Prudential Asset Allocator Fund
Edelweiss Balanced Advantage Fund
You may continue with your tax-saving schemes.