I am a 43-year advertising consultant and want to build a corpus of ₹2 crore through investments in the next 10-12 years. My current investment comprises ₹1.52 lakh in stocks and some investment in mutual funds through the systematic investment plan (SIP) route.
My mutual fund portfolio includes SIPs of ₹10,000 in SBI Small Cap Fund and ₹7,500 each in Axis Mid Cap Fund and UTI Nifty Next 50 Index Fund.
How much should I invest every month to achieve my goal? Also, are there any specific products and plans that I should opt for over the next 10 years?
—Name withheld on request
To reach an investment corpus of ₹2 crore in 12 years, assuming an annual portfolio return of 12%, you would need to save and invest close to ₹63,000 per month during this period. You are investing ₹25,000 per month at present. Hence, you would need to steadily increase your monthly investment to get as close as possible to your target amount. In terms of funds, you are currently investing in a large-cap fund (Nifty index fund), and two small and mid-cap funds. The fund choices are reasonable.
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As you increase the amount in yo
your monthly Systematic investment plan (SIP), you can add a flexi-cap fund such as Parag Parikh Flexi Cap Fund to the mix in your portfolio. Such funds allow a fund manager to move across market segments depending on their analysis of where it is profitable to invest, and the fund suggested also invests in overseas stocks.
You do not need many more funds in your portfolio apart from these and you can add to your existing allocation as you keep adding funds to your SIP.
As you get closer to your target date, you would want to secure your investment by moving or switching periodically to safer debt funds so that the risk of your portfolio gets toned down gradually.
Srikanth Meenakshi is a co-founder at PrimeInvestor.