I am 35. I have been investing in mutual funds since 2009 and below is my current SIP portfolio (all direct plans with investment horizon of 3-5 years). I aspire to build a capital of ₹75 lakh to ₹1 crore in the next 15 years. First four plans as per BL Portfolio’s recommendation: Mirae Asset Emerging Bluechip – ₹2,500; Axis Focused 25 – ₹2,500; Franklin Templeton US Opportunities – ₹2,500; Kotak Flexicap – ₹2,500 and ICICI Prudential Technology – ₹3,000.

I have also invested a lump sum of ₹15,000 each in IDFC Bond Fund-Short Term plan and HDFC Short Term Debt.

I have FDs up to ₹1.5 lakh and RDs (₹5,000/month) running for instant cash needs; NPS Tier-1 account with ₹2,000 a month in ICICI plan with 70 per cent, 15 per cent and 15 per cent in Scheme E, C and G respectively.

My upcoming investment choices: To invest in SSY scheme for my 2-year old daughter; Invest in SGBs when they are released for purchase; Mutual funds SIPs: Axis Triple Advantage – ₹3,000; Mirae Asset FANG+ ETF – ₹3,000 and ICICI Prudential Nifty ETF – ₹,3500

Looking at my current portfolio and upcoming investment choices, may I request your advice on what additional MFs I can invest in? Do the current choices provide enough return to accumulate wealth of ₹75 lakh-₹1crore in the next 15 years? I would like to invest at least ₹20,000-₹25,000 a month in various MFs.

Krishna

It is appreciable that you started investing in MFs in your early 20s and are looking to build a corpus in 15 years’ time. While you have mentioned that you want a corpus of Rs ₹75 lakh to ₹1 crore 15 years hence and have also stated your current SIPs, you have not revealed the corpus you have accumulated so far since 2009. Hence it is difficult to pinpoint what could be the shortfall and what could be the ideal SIP amount to reach this goal, assuming a portfolio return (CAGR) of say, 12 per cent over this 15-year period. This is a reasonable long-term return assumption to work with for equity MFs.

However, this working will give you an idea: Assuming you invest ₹13,000 a month for the next 15 years beginning today, you will accumulate a corpus of ₹65.13 lakh over the next 15 years at a CAGR of 12 per cent. If you raise it to ₹25,000 a month, your corpus will grow to touch ₹1.25 crore in the same time period, assuming the same returns. When you consider this in the light of the corpus you have accumulated so far, you will be able to see where you stand. You can use online SIP/target amount calculators to simulate various scenarios.

That said, there are two observations about the way you are going about. One, in 15 years’ time, you will just be 50 years old. If you are planning for early retirement, the question arises whether this ₹75 lakh-₹1 crore plus your earlier corpus is enough for your retirement. Of course, you have some small lump sum investments in debt funds and in the NPS, where at ₹2,000 a month, you are not even utilising the full ₹50,000 a year eligible for additional tax deduction. If the saving is for your daughter’s higher education — she will be 17 in 15 years — you still will have to think of investing separately for your retirement.

Secondly, while you are investing for the long term, you have also mentioned an investment horizon of 3-5 years for existing funds. If the funds you are doing SIPs in are good performers, you can continue your SIPs beyond 3-5 years. In your current SIP portfolio, investments in the first four funds can be continued. ICICI Pru Technology is a sector fund where you may have to time your entry and exit for maximising gains and minimising losses. Hence it may not suit a long-term portfolio. Instead of a Nifty ETF, you can go for a Nifty Index fund. Limit your international fund exposure to about 10 per cent of your portfolio.

Thus you can spread the ₹22,500 (₹13,000 + ₹9,500 new investments) as follows: Invest ₹2,500 each in Mirae Asset Emerging Bluechip (maximum allowed) and Franklin US Opportunities. Of the remaining ₹17,500, invest ₹5,250 each in Kotak Flexicap and ICICI Pru Value Discovery; ₹3,500 each in SBI Nifty Index fund and Axis Focused 25.

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