My grandson will turn a year old in April and I want to invest Rs 25,000 every year for the next 15 years. What is the best risk free investment option available to me?
- Sripad Nadkarni
Equity is the best asset class for long-term investments. However, equity investments come with varying degrees of risks. When you invest in equity mutual funds, you are right away exposed to market risk which is a multidimensional concept that manifests itself in various ways and is reflected in the volatility of the market indicators.
Systematic investment plans from mutual funds are a way to ride market volatility over long periods and you can consider investing in a large-cap fund such as DSPBR Top 100 Equity or Franklin India Bluechip and invest regularly in them for the long-term. You can opt for a monthly or quarterly SIP in these funds to increase the frequency of investments to average out investments in the long run.
However, if you wish to stay away from risk completely; consider PPF as an option to invest in for the 15-year tenure that this product carries to invest at fixed rate of return for your grandson.
This article was originally published on March 18, 2011.
Ask Value Research 
New episodes every Friday 
New Process Alert 
Seems like you've uploaded a wrong QR code. Please upload the QR code downloaded from MF Central platform.
