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Long-term Investor

Have a portfolio of core funds that offer stability and satellite funds that will offer the necessary upside

I am 32 and have no exposure to equity market as of now. I plan to invest up to Rs 10,000 a month, but wish to start with half that amount for 6 months, before increasing my investment. I have an average to high risk appetite. I need this investment to build a corpus for my 2-year old daughter's education and my own retirement. Please suggest if HDFC Top 200, Religare PSU Equity, HDFC Equity Growth, HDFC Prudence, Fidelity Equity, HSBC Equity and DSP Blackrock Top 100 Fund are good for wealth creation? Also, please let me know the funds to start with -
Akhilesh Singh

It is too bad that for a 32-year old you have no equity exposure. Equity is the one asset class that appreciates over the long-term and helps in wealth creation. It is encouraging to see that you wish to catch up on the lost time and are considering equity investment through mutual funds. However, you should be looking at a portfolio of few funds and not too many. The funds that you have short-listed are good, but they all have different investment objectives. Your financial goals are some distance away; your daughter is only two and your retirement is easily another 25 years to go unless you decide to take an early retirement. Your investment in long-term equity will help you achieve these goals. Investing for the long-term means you are allocating funds that you do not need in the foreseeable future.

As you seem to be a bit reluctant to plunge into investing, which is understandable for a first time investor, we suggest you start with a balanced fund. Balanced funds are those that have 65-70 per cent equity exposure with the rest in debt. You need to try this for six months to experience mutual fund investing and also get the necessary confidence to further invest. Once you have tracked this investment, you can consider investing additional amounts into a combination of multi-cap funds such as ICICI Prudential Dynamic and funds that have a large and mid-cap exposure such as HDFC Top 200. This way you will benefit from the stable returns that the multi-cap funds achieve and get the necessary spike to boost your fund portfolio through large and madcap funds.



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