Where should I invest Rs 5,000 every month for 20 years?

I want to invest Rs 5,000 per month for about 20 years to create a large corpus. Can you suggest some of the best mutual funds for the long term? - Ahmad Wani Given that you, Mr Wani, have a long enough investment horizon, equity funds would be your best bet. However, since equity markets can be volatile, choosing the right fund depends on your comfort with market ups and downs. For a first-time investor An aggressive hybrid fund would be a good starting point. These funds allocate about two-thirds of your money to equities and the rest to fixed income (debt). The small allocation to fixed income acts as a cushion during market downturns, helping to reduce the impact of market volatility compared to pure equity funds. Despite this, they have delivered reasonable long-term returns. A monthly investment of Rs 5,000 in an average aggressive hybrid fund over the last 20 years would have grown to approximately Rs 51.25 lakh, with a 20-year SIP return of 12.18 per cent as of March 12, 2025. This fixed-income allocation is crucial because many new investors panic during market corrections. Often, they panic-sell their investments at a loss. Which is where aggressive hybrid funds step in. These funds help control this anxiety by reducing the downside impact, more so than the Sensex and flexi-cap funds, as you can see in the table below. Worst 10 calendar month declines in the last two decades Date Sensex TRI Flexi-cap funds Aggressive hybrid funds Oct 2008 -23.8 -22.

This article was originally published on March 13, 2025.