Mutual Fund Corner: Am I on the right track to create a corpus of Rs 1 crore in 16 years?

Want to invest in mutual funds but don’t know how to go about it?

Get all your mutual fund related queries answered by our expert, Himanshu Srivastava, senior research analyst, Morningstar Advisers India, on our show Mutual Fund Corner.

A: Let's take your target as Rs 1 crore in 15 years. For that, you have increase your SIP amount in mutual funds from the current Rs 16,000 to Rs 20, 000 per month. This should help you achieve your target considering an annual return of 12 percent. As far as your mutual fund portfolio is concerned, there is a need to rejig that.

Your portfolio is missing the basic category of mutual funds, which should form a part of any investor’s portfolio. Therefore, you should add large cap and mid-cap funds to your portfolio. The allocation can be 60 percent large cap and 40 percent mid and small cap.

You should also consider diverting the SIPs from Reliance Small Cap and Reliance Focused Equity Fund to some other funds, which are more apt for your portfolio. Both the funds have witnessed a change in manager and they don’t have a long-term track record under the new manager.

In place of Reliance Small Cap, you can consider investing in:

 

 

As far as focused funds are concerned, they are relatively aggressively run fund. Given the mandate is to invest maximum in 30 stocks, these funds have a concentrated portfolio and hence they offer a high-risk investment proposition. Therefore, you need to have a requisite risk-appetite for investing in them. If that’s not the case, then you should invest in a traditional diversified equity fund.

With regards to your investments in recurring deposit, I think you will be better of replacing them with fixed deposit. They also offer assured returns and will offer you better returns. Your investments in post office and NPS may continue.