Kindly advice about good five star rated mutual funds. I want to invest Rs 20,000 per month in some well rated schemes which should give me a minimum of 15 per cent annual returns. I am 55 years old and have 10 more years of service left.
—Dr Ashok M.Patil
Expecting 15 per cent per annum from a well diversified fund is a realistic expectation. But as always, fund selection is the most important criteria. First, assess your risk appetite and decide on the ideal equity-debt allocation you would like to maintain. Next, check on the track record of the fund over the past 3-5 years. Star ratings would help you choose the right fund.
Since 10 years of your service are left, you can invest in well rated equity diversified funds which are large cap oriented. Large caps offer more stability when compared to mid and small caps. You can also include some balanced funds to have certain amount of debt in the portfolio. While initiating the SIPs, make sure you do not invest in more than four funds for a total amount of Rs 20,000 (Rs 5000 in each). To safeguard the corpus that would be created over time, you can slowly start shifting your assets from equity to debt, three years before the retirement (if you require the corpus after retirement).