I am planning to do a yearly top up of 10%.
Also, I thought of doing a weekly SIP.
- Axis Growth opportunities Large and midcap – Rs 5,000
- Canara Robeco Emerging Equities Large and mid – Rs 5,000
- Kotak Emerging Equity Midcap – Rs 5,000
- Kotak Smallcap Fund – Rs 5,000
- UTI Flexi Cap Fund – Rs 5,000
- Axis Focussed 25 Fund – Rs 5,000
- Mirae Asset Banking and Financial Services Fund – Rs 5,000
Can you suggest if the above funds are equally diversified and are for the goal of achieving Rs 2 crore in 10 years?
Rushabh Desai, an Amfi-registered mutual fund distributor based in Mumbai, responds:
Assuming 12% CAGR returns in equities, if you invest Rs 40,000 per month with a 10% annual top up at the end of 10 years, your SIP value with top up will be around Rs 1.35 crore. For you to achieve your target amount of Rs 2 crore, you will either need to increase your monthly SIP amount to Rs 60,000 with an annual top up of 10% or increase your SIP time horizon from 10 years to around 12 years.
You can look at investing your SIP amount in equal proportions in the following mutual funds – Axis Focused 25 Fund, UTI Flexi Cap Fund, Canara Robeco Emerging Equities Large & Mid Cap Fund, DSP Mid Cap Fund (new), Kotak Small Cap Fund and Motilal Oswal S&P 500 Index Fund (new). Make sure to keep a buffer period at the end of your SIP tenure and try to redeem your corpus during favourable market conditions.