Dhirendra Kumar highlights the essentials to keep in mind while saving for your retirement and talks about the fund size as a barrier
15-Nov-2019
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If I invest Rs 10,000 per month in Axis Bluechip Fund for the next 20 years, will I be able to accumulate a sufficient retirement corpus? Also, does a fund with high AUM, like Kotak Standard Multicap, provide satisfactory returns to build a sufficient retirement corpus?
- Dayson
Both these funds are good performers. One of them is a large-cap fund, while the other is a multicap fund, which invests heavily in large caps. Having said that, since these funds focus on the large-cap space, their size won't be a hindrance to giving returns. The size of a fund acts as a constraint in the case of small- as well as mid-cap funds. When it comes to a large-cap fund, a big investment universe is available, as the market is increasing rapidly on the back of the growing market cap of more companies. And the same goes with multicap funds.
Coming to your question about investing Rs 1.2 lakh per year and building a retirement corpus, it completely depends on future returns and inflation. If you earn about 8-10 per cent returns when inflation is about 3-4 per cent, I feel you can build a sufficient corpus. Just be mindful of a few things - choose a good fund and be regular with your investment. Second, aim to increase your SIP contribution in line with your rising income. Lastly, make sure to review your investment annually.
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