I am investing Rs 7,000 through monthly SIPs in HDFC Top 200, BSL Small & Mid-Cap and ICICI Prudential Discovery fund. I can invest additional Rs 3,000 per month and want to have Rs 1 crore when I retire in 12 year from now?
- Om Sharma
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To build Rs 1 crore corpus in the next 12 years you will need a monthly investment of Rs 31,100 earning an annualised 12 per cent return or Rs 25,000 if it earns an annualised 15 per cent return. Your current investments of Rs 7,000, which you plan to increase to Rs 10,000 is not sufficient and you have to increase your allocation to investments. Your portfolio of three funds is high on risk because of the high allocation to mid- and small-cap funds, which you should be aware of. Moreover, when you increase your investment to achieve your goal, you should build your portfolio based on the core and satellite approach allocating up to 70 per cent investments to large- and large- and mid-cap funds and include DSPBR Top 100 or ICICI Prudential Focused Bluechip Equity which are highly rated large-cap funds and Fidelity Equity in addition to HDFC Top 200. Likewise for the satellite component you should add a multi cap fund such as HDFC Equity or Quantum Long Term Equity. Make sure you track the performance of the funds that you have invested in regularly and evaluate its progress towards your financial goal.
This article was originally published on November 09, 2011.
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