Mutual Funds

Fund Query: SIP options for seniors and juniors

Parvatha Vardhini C BL Research Bureau | Updated on October 09, 2021

I am 67, retired, and intend to start SIP of ₹2,500 per month in funds having medium to high risk. Kindly advise on the right fund. Is there any date/week in the month more congenial for SIPs? I had read that any date after the 20th in a month is beneficial.

M Yunus

Since you are a senior citizen and retired, it is not clear what purpose a SIP of ₹2,500 in a fund entailing medium to high risk will serve you. Your time horizon for this new SIP is not known. Your other investments are also unknown. We hope you have enough savings/pension income to comfortably provide for your regular needs. If you want to start a SIP because markets are on a purple patch and you fear missing out on making money, it is not the right approach as the risk to a downside in the market from here on is quite high. You must invest only if this ₹2,500 per month is a surplus in your hands after meeting monthly expenses and you have enough buffer for emergencies such as medical expenses. In the near term, you must be prepared for your investments to decline in value first before going up.

Though you are willing to take medium to high risk, a lower time horizon pegs up the risk of underperformance or capital loss considerably in market-linked products. If willing to stay invested for 7-10 years you can consider SIPs in flexi-cap funds such as DSP Flexicap or Kotak Flexicap. The very idea of SIPs is to benefit from cost averaging by investing regularly rather than trying to time the market. Hence, choosing a particular date for SIPs thinking it could be more beneficial is alien to the concept of SIP itself.

I am 23 and earn ₹30,000 per month. Please suggest monthly SIPs. I have shortlisted Mirae Asset Emerging Bluechip, ICICI Prudential Value Discovery and Franklin Focused Equity. Also suggest equity shares to invest for the long term.

Vinod Kumar

You have not mentioned your investible surplus and how much you plan to invest in each of these funds. All three funds are rated 5-star by BL Portfolio Star Track Ratings and are suitable for someone with a high risk appetite. Assuming you are investing for long-term goals and can take high risk, you can go ahead with your fund choices. Note that there is a cap of ₹2,500 per month for SIPs in Mirae Asset Emerging Bluechip.

For equity shares, to invest for the long term, follow the ‘Taking Stock’ page in the print edition of BL Portfolio on Sundays or the ‘Stock Fundamentals’ section in our website.

I do the following SIPs: ₹2,000 each in Mirae Emerging Bluechip, Nippon Small Cap, Axis Midcap, Parag Parikh Flexicap and Tata Digital India and ₹3,000 in Canara Robeco Emerging Bluechip. I can invest ₹4,000 more. I also want to invest a lump sum of ₹1.3 lakh. I am a public sector bank employee under NPS. Kindly review my portfolio.

Jagdeep Gupta

Your choice of funds shows a high risk appetite. Most funds you are investing in are rated either 4-star or 5-star by BL Portfolio Star Track Ratings. Tata Digital India, which is a sectoral/thematic fund, is not rated by us. Sectoral/thematic funds also don’t suit long-term goals as they require timing and entry of exit. Besides, between Mirae and Canara Robeco Emerging Bluechip, which are both large and mid-cap funds, it is enough to invest in one of them. Overall, you can divide the ₹17,000 you want to invest (including additional ₹4,000) as follows: ₹5,000 in SBI Bluechip, ₹4,000 each in Parag Parikh Flexicap and Canara Robeco Emerging Bluechip, ₹2,000 each in Axis Midcap and Nippon Small Cap.

It may not be a great idea to invest a lump sum now when the market is at a peak. You can divide this into three or four instalments and invest on corrections. Until then, hold the funds in a flexi FD.

Send your queries to mf@thehindu.co.in

Published on October 09, 2021

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