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Achieving Different Goals

For a short-term goal, invest in balanced funds. But for the long-term, go for diversified equity funds…

I am a 32-years-old bank employee, with an annual salary of Rs 4.8 lakh. I am planning to start an SIP in three mutual funds. My short-term goals require me to raise Rs 8-10 lakh within the next 5 years or so. My long-term goals require me to accumulate around Rs 30 lakh in the next 10-12 years. What type of funds would you recommend? What should the monthly SIP amount be?

For your first goal of building a corpus of Rs 8-10 lakh in 5 years, you should be investing whatever you can save between Rs 18,000 and Rs 25,000 every month. For this goal, you should invest in a balanced fund that will give you stable returns conservatively. Once your first goal is achieved, you can become slightly more aggressive. For a period of 10-15 years, 90 per cent of your assets should be invested in equities and the rest in fixed income. This allocation can be achieved by investing in 1 or 2 mainstream diversified equity funds, which have a broad mandate to invest across market caps and sectors. Some funds to choose from in this category are Franklin India Prima Plus, HDFC Equity, DSP BlackRock Equity and UTI Equity.

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