MF GURU: 'Annual SIP of Rs 1.36 lakh can return 2 cr in 7 yrs'

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MF guru

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Nikunj Saraf, Vice President Choice Wealth, (external link), will answers your queries.

Meena Gupta: Dear Sir, I am 50 yrs old. I wish to invest in the following mutual funds:

1. Mirae Asset Tax Saver Regular Growth- 5000

2. PGIM Midcap Opportunities Regular Growth- 5000

3. Parag Parikh Flexicap Regular Growth- 5000

4. SBI Technology Regular Growth- 5000

5. BOI AXA- 5000

6. KOTAK SMALL CAP- 5000

7. PGIM SMALL CAP- 3000

8. Icici Value Fund Regular Growth- 3000

Lump sum:

1. DSP Natural Resources Regular Growth- 32000(2022)

2. Tata resources and energy fund-25000(2022)

3. SBI Magnum Regular Growth-125000(2009)

4. SBI Contra Regular Growth- 80000(2009)

I wish to build a corpus of 2 crores in 10 years.

Kindly guide if my selection of mutual funds is fine and kindly suggest If I should merge/discontinue some funds.

Nikunj Saraf: Hello Meena, Your selected portfolio is well diversified and looks good. If you wish to build corpus of 2 Cr in next 10 years, I would suggest to add-on with your current sip investments to 70 k to achieve your goal or you can add on some funds annually to reach to sip investments of 70 k.

Also, I would recommend to change some of the schemes like BOI AXA & PGIM SMALL CAP to other schemes in same category.

Varsha Hemrajani: I have rs 400000 in sbi technology which is not performing well. So shld I switch or wait?

Also rs 5 lakh I am getting. So where do I divert this money? For a range of 3 to 4 years with good returns.

Nikunj Saraf: Hi Varsha. There has been high volatility in the first half of this year, which has had a negative impact on various MF schemes. Also, SBI Technology Fund lies in sectoral-Technology. It's for the long term with a horizon of more than 8 yrs minimum.

Try to diversify your current portfolio. I suggest you invest via STP rather than lump sum in order to benefit from market volatility for future investments.

Kindly find below suggested schemes as per your requirement:

Kotak Bluechip Fund -- 150,000.00
Canara Robeco Emerging Equities Fund -- 200,000.00
SBI Hybrid Equity Fund -- 150,000.00
Total: 500,000.00

MADHUKAR ANAND: Dear sir, I am retiring in few months and after commutation of my pension I shall get a pension of Rs 60000/ pm. Apart from that I shall get PF + Gratuity + Commutation of pension of 1.25 crore. Where should I invest these amounts to get the interest at max rate or to invest in which SIP from where I can get interest to meet out other expenses. I am covered under CGHS (central govt. health scheme). Thanks with regards.

Nikunj Saraf: Hello MADHUKAR, One needs the funds for a number of expenses during retirement. Hence, I recommend diversifying your portfolio with different asset classes.

Considering your age, I would suggest investing 70% in debt funds and 20% in equity funds & 10% in hybrid fund with lower risks, such as large-cap funds. Moreover, you can invest around 10-20% of your pension in SIPs with hybrid asset classes.

Akshay Kolhar: Sir, I am a government employee, age 34 years, married. My current allocation of mutual fund is like this:

Canara robeccco blue chip- 3000
SBI flexi cap- 1500
Absl tax elss - 1500
ICICI prudential blue chip-1000
HDFC small cap regular -1000
Kotak small cap-2000
Axis blue chip-2000
Axis long term -1000
SBI large cap -1000
Ppf -2500

Blue chip funds and ppf for retirement.

Nikunj Saraf: Hi Akshay, Good to see that you have started to plan for your retirement. It is good to see that you have started planning. My recommendation, based on your age, would either be to reduce your allocation to large cap funds or to reduce the number of AMCs in the same category in which you invest.

There are times when over-diversification of a portfolio can have a negative effect on it. Try to incorporate more high-risk funds into your portfolio, such as mid-cap funds.

Amandeep Puri: I am 37 from Ghaziabad. I am an HR professional.I had liabilities due to some losses I faced during Covid that I had to pay in the next 3 years.

I am currently looking to invest some amount to create my portfolio. As of now my only SIP is running which is 1k in Axis Blue Chipfund - Direct Growth from the past 11 months.

I need to create wealth for my daughter's education / marriage / my retirement approx 3-4 crore minimum.

Please suggest what investments I can do and how much amount I should invest for now to create a good portfolio down the line 15 years I should not regret. Also please share the funds or invest plan names for long term with great benefits or returns and tax can also be saved in maturity amount.

Please let me know if any more information is required

Nikunj Saraf: Hello Amandeep. I understand you have multiple goals for the next decade. If you want to build a corpus of 3-4 Cr, it's advisable to start investing in sips more and more. Say a monthly sum of approximately Rs 44,000 sips.

You can add on some funds annually to reach to sip investments to 44 k. Kindly find below suggested schemes that may accomplish your future goals.

SBI Small Cap Fund
Nippon India Growth Fund
PGIM India Flexicap Fund
Canara Robeco Emerging Equities Fund
Mirae Asset Tax Saver Fund- contains lock in period

Pankaj: I am 39. I WANT 2 CRORE IN 7 YEARS TIME FRAME. KINDLY ADVISE HOW MUCH TO INVEST MONTHLY IN SIP MF AND IN WHICH SHALL I INVEST.

Nikunj Saraf: Hello Pankaj, Considering all factors, I suggest you start investing approx Rs 1.36 Lakh monthly sips to reach the target corpus.

If you wish, you can add some funds annually to reach Rs 1.36 lakh in sip investments. Listed below are some schemes you may find useful in achieving your future goals.

Nippon India Growth Fund
Quant Flexicap Fund
Canara Robeco Emerging Equities Fund
ICICI Pru Bluechip Fund

Abhinaya Dutta: Can you please guide me to choose between Index fund and Debt fund? I wish to build a corpus with 10% annual return without indulging in much risk. Can you also suggest some of the funds from above categories?

Nikunj Saraf: Hello Abhinaya, As regards your concern, both categories fall under different asset classes.

Indexes are equity assets and Debt Funds are asset classes themselves. Compared to Index Funds, which are low-risk equity funds, debt funds carry minimal or very little risk.

Listed below are some schemes for above categories:

HDFC Index Fund - S&P BSE Sensex Plan Quant Flexicap Fund
UTI Nifty 50 Index Fund
ICICI Pru Short Term Fund
Aditya Birla Sun Life Corporate Bond Fund

Amrit Pal Singh: Planning to start investment in following MFs from next month.

Time Horizon is 8-10 years.

Goal: To get 20% (or 33% more than Nifty 50) return overall in 8-10 years. Will pull out as soon as I see 20% (or 33%+ on nifty 50) in total at 8-10 years, otherwise will pull out individual MFs from 10-12years with best CAGRs achievable. Planning to buy a house next year with a loan of 70 lakh, will clear the home loan with that money. All are direct.

1. Quant Active: 10K

2. Nippon India Small Cap Nifty Index: 5k

3. Nippon India Mid cap Nifty Index: 5k

4. Quant Infrastructure Fund: 5k

5. Quant Tax Fund: 3k

6. SBI Consumption opportunities: 2.5k

7. ICICI prudential Bharat Consumption Fund :-2.5k

Will double as soon as I see a 13% drop in Nifty for the time horizon mentioned and keep on doing that till the time it reaches within 3% from the top. Let me know if I need to change the funds or the funds are okay. Would replacing small or mid cap index funds with smallcap funds like SBI Smallcap Fund or Canara Robeco Small Cap fund be a better thing?

Nikunj Saraf: Hi Amrit, In accordance with your goals and current MF selection. I could see you have selected multiple sectoral funds which are aggressive risk & allocated proportion is more than advisable. Therefore, I suggest you concise the schemes with the amount in sectoral funds.

Furthermore, you can replace the small-cap and mid-cap index funds with small-cap funds such as SBI Small Cap Fund or Canara Robeco Small Cap Fund in order to improve your portfolio.

Additionally, you can introduce Flexi cap & mid cap categories to your selection. Diversify your portfolio with different categories and AMCs.

Dipak KShah: I have below funds -- along with their current value -- having 1000 rs SIP for each fund. I can still continue for next 7 years so after 7 years how much corpus I can get.

Mirae asset bluechip fund - Regular plan growth -- 21500
Axis bluechip fund -- 20828
Canara robbeco flexicap fund regular growth -- 21518
Franklin india prima fund growth -- 88949
HDFC top 100 fund growth -- 87856
ICICI prudential value discovery fund - Regular plan - Growth -- 98444
Nippon india pharma fund - growth plan -- 85638
Nippon india small cap fund - growth plan -- 111640
HDFC balance advantage fund -- 76016

Nikunj Saraf: Hello Dipak. In response to your concern, I would like to first address one of your SIPs of HDFC top 100 fund growth that can be changed to mid-cap funds. This is because it may not perform as per market in the long run.

According to past performance, you may expect a corpus of Rs 20-25 Lakh based on 14% CAGR.

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