I am 32 years old, and my goal is to build a retirement corpus and fund my child's education. I have been investing Rs 20,000 each month through SIP in the following funds from the past three years. I have high risk tolerance.
HDFC Top 100 Fund - Rs 5,000, SBI Focused Equity Fund - Rs 1,000, SBI Small Cap Fund - Rs 3,000, Edelweiss Mid cap Fund - Rs 3,000, Axis Bluechip Fund - Rs 5,000, ABSL Tax Relief Fund - Rs 3,000
Kindly advise if these funds are suitable for me to achieve my goals or do I need to make any changes? How much will I accumulate with my current investment?
-Sandeep
By Anup Bansal, Chief Investment Officer, Scripbox
I am happy to see that you started saving regularly at an early age. Since you've got time by your side, if you continue investing the same amount of money, you can expect a corpus of around Rs 7 crore with a 12 per cent annual return by the time you become 60. Remember that the actual corpus will be a function of savings, withdrawals, market performance and time horizon. Either way, it is advisable that you save at least 30 per cent of your salary.
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It is unclear from your question if you already have a financial plan in place to determine the savings potential and corpus requirement for your aforementioned financial goals. Currently, you are investing 65 per cent in large cap, 20 per cent in mid cap and 15 per cent in small cap funds. Based on your high risk tolerance, I would recommend increasing your contribution to mid cap and small cap in the range of 20 per cent and 25 per cent. Large cap allocation can be adjusted accordingly as well. A thumb rule is that you should stick to two to three funds in each category. Your current selection of funds is good, and on a five year basis, the performance is above average.
Finally, it is crucial that you monitor your portfolio regularly. You may seek help from a qualified financial advisor for an in-depth and customised analysis.
(Views expressed by the investment expert are his/her own. E-mail us your investment queries at askmoneytoday@intoday.com. We will get your queries answered by our panel of experts.)
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