Instruments in SIP


I am thinking of investing Rs 5000 monthly in mutual funds through SIP. I have a high stable income and want to invest for 20 years for the purpose of my daughter marriage. I am confused whether i invest 30 percent in debt and 70 percent in equity or invest 10 percent in debt and 90 percent in equity. What should be the ideal distribution of investment for me


It depends on how conservative you are. If you have the stomach to see negative returns of upto 10-20% in the middle of the 20 year journey then 100% equity would the best option. If not then 10% debt or 20% or 30% will depend on how much conservative you are. Also when considering debt in your portfolio please consider the taxes involved in time to time rebalancing of your portfolio. The most cost efficient way to allow debt in your portfolio would be opting for aggressive hybrid funds which can have 20-35 % debt allocation at any time depending upon the market.
Other approache can be to start with 90-10 allocation and go on increasing the debt allocation as you approach the goal 20 years away.


One should look at Mutual fund investments only if they can afford to give their investment necessary time it deserves. Volatility is the inherent nature of any stock market investment, one needs to develop the ability to stomach this. The antidote to volatility is ‘time’, which in your case is 20 years, which is fantastic. When you give investments time, the volatility becomes your friend and works in your favor.

Given this, I’d suggest you split your money into two equal parts and invest in -

  1. A midcap fund - this is to ensure you have a higher growth
  2. A large-cap fund - to maintain the stability of the corpus.

Please note, both the funds are equity growth funds. No debt or any other instrument. I think this is fair considering that you have a really long term investment horizon.

Good luck and keep SIPing :slight_smile:

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I would suggest you to go with 60 percent of your corpus with smallcase “All weather Investing”, 25 percent in smallcase “Low risk Smart Beta” and 15 percent in smallcase “Bargain buys”.