I want ₹ 50 lakh in 8-10 years. How much should I invest and where?

Name withheld on request

We suggest that you post an equity-oriented portfolio in which 10% of the portfolio is kept in money market funds to take care of contingencies. Equity as an asset class has the potential to deliver better returns in the long run. One can invest in equity-oriented mutual fund schemes either in lump sum or through SIP mode. To build a corpus of Rs 50 lakh in 10 years, one needs to make a monthly SIP amount of Rs 22000 (assuming a CAGR return of 12%). You can look at building a portfolio with a healthy mix of funds from large and mid cap, flexi cap, mid cap and value category equities. Advice to split the monthly SIP amount (Rs 22000) equally among Axis Growth Opportunity Fund, HDFC Large & Mid Cap Fund, Parag Parikh Flexi Cap Fund, UTI Flexi Cap Fund, Mirae Asset Mid Cap Fund and IDFC Sterling Value Fund Is given. This way your portfolio will be diversified across categories, geography and AMCs.

Q2) Hi, I need 15 lakhs in 6 years, and for that I have started SIP 1,000 in Axis Bluechip Fund and Nippon India Small-Cap. Also I have started a SIP 2000 in Parag Parekh Flexi Cap.

Name withheld on request

to create a fund of 15 lakhs in 6 years, one needs to make a monthly SIP amount of Rs 15000 (assuming CAGR return of 12%). Hence, you need to either increase your investment horizon or increase the monthly SIP amount (on the existing SIP amount of Rs.4000) to achieve your desired goal. Equity as an asset class has the potential to deliver better returns in the long run. We suggest that the additional SIP amount be divided equally among funds from Large & Mid Cap, Flexi Cap, Mid Cap and Value Category of Equity. Suggested funds are Canara Robeco Emerging Equity Fund, Axis Growth Opportunity Fund, UTI Flexi Cap Fund, Kotak Emerging Equity Fund and IDFC Sterling Value Fund. It is also advisable to review your portfolio at least once a year.

Sanjeev Bajaj, Joint Chairman and MD, Bajaj Capital answered the questions.

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