I’m a 28-year-old professional in the IT sector. Recently married
Investment duration: 20+ years
Risk profile: Moderately Aggressive
Investment -
GOLD - ₹ 80,769.00
MUTUAL FUNDS - ₹ 8,49,957.00
SAVINGS BANK BALANCE - ₹ 4,41,498.00
EPF/VPF - ₹ 3,70,100.00
PUBLIC PROVIDENT FUND - ₹ 1,50,000.00
Mutual Funds -
ICICI Prudential Nifty 50 Index Fund - ₹ 1.62 L
Motilal Oswal nifty Midcap 150 Index Fund - ₹ 2.08 L
Parag Parikh Flexi Cap Fund - ₹ 1.9 L
Quant Active Fund - ₹ 2.0 L
Quant Small Cap Fund - ₹ 89.99 K
Recently, I got a promotion due to which there is hike in my in hand salary. Right now I can invest around 1.3 Lakh per month as SIP.
Note - I don’t want to continue with Quant(too much volatile) even though I have done my SIP in this correction even in March & April & mid cap (overvalued). I can handle fall but Quant is too much.
Of course I am not going to withdraw my money from any of these funds right now the loss is in app if I liquidate it would be real. I want suggestion for new one.
Please suggest me new SIP distribution along with MF name, in which I would invest for next 20+years with 10% step-up.
One other product which I forgot to mention NPS - Read about it. It is a asset allocation by itself. Funds invested cannot be take out until 60 years and hence you have a good time for the money to churn. Earlier we had tax benefits as well.
Investing in mutual funds through a systematic investment plan (SIP) can be an effective way to create potential long-term wealth. For an investor planning to invest Rs. 1.3 lakh per month, it is important to carefully evaluate options based on risk profile, investment horizon, and growth potential rather than chasing returns.
Understanding SIP investments
An SIP allows you to invest a fixed amount regularly in mutual funds. This approach benefits from rupee cost averaging, where investments are made at different market levels, potentially reducing the impact of short-term volatility. SIPs are flexible, allowing adjustments in contribution amounts or pausing the plan as per financial circumstances.
Determining investment allocation
For a substantial monthly SIP of Rs. 1.3 lakh, diversification across multiple categories of mutual funds can help manage risk and optimise potential growth. Common categories to consider include:
Equity funds: These invest primarily in stocks and have potential for high growth over the long term, though they may experience short-term volatility.
Debt funds: These invest in fixed income instruments and have lower volatility, potentially offering steady growth over time.
Hybrid funds: These funds combine equity and debt, providing a balance between growth potential and risk mitigation.
Evaluating mutual fund metrics
While selecting funds for a large SIP, pay attention to the following metrics:
Fund performance: Review performance across multiple time periods. However, keep in mind that any historical information or past data should not be taken as an indication or guarantee of any future performance.
Expense ratio: Lower expense ratios can help retain more potential returns over time.
Risk measures: Standard deviation and beta provide insight into volatility and market sensitivity.
Portfolio composition: Assess the diversification of assets to align with risk appetite.
Strategic approach
Investing Rs. 1.3 lakh per month in mutual funds may benefit from spreading the SIP across a mix of equity, debt, and hybrid funds based on personal financial goals. Before finalising the allocation, it is advisable to consult a financial planner or investment advisor to align investments with your risk tolerance, financial objectives, and investment horizon.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.