I am a government employee covered by the NPS. I want to invest ₹15,000 every month in equity mutual funds through the SIP route for my four-year-old daughter’s higher education and marriage. I can take risks. Kindly suggest some good mutual funds.

Chandra Sekhar

It is good to note that you are saving for your daughter’s education and marriage pretty early. There are a couple of things you can do to save for your daughter. Before taking the plunge into equity funds, you could consider putting in a lumpsum or monthly instalments in the Sukanya Samriddhi scheme. This is a government-run scheme for girl children and offers a handsome interest rate (over 9 per cent) and tax deductions. Withdrawals are allowed when the child turns 18 (up to 50 per cent) and later on at 21.

This investment can help fund a portion of the goals and/or bridge any shortfall you may have from your equity portfolio.

You could consider setting aside ₹5,000 every month in it and invest the rest of your earmarked amount in mutual funds. Split this ₹10,000 as follows: invest ₹3,000 each in ICICI Pru Focused Bluechip and UTI Equity. Park ₹2,000 each in Franklin India Smaller Companies and HDFC Midcap Opportunities. This portfolio would give you a blend of large- and mid-cap stocks. In case you want to invest the entire ₹15,000 in mutual funds alone, split the additional ₹5,000 proportionately among the schemes mentioned earlier.

Meanwhile, please note that NPS alone may not suffice for your retirement, given its low equity component.

Try to also add some schemes for yourself later when your surplus improves.

I am 26 and work for a public sector undertaking. I want to save ₹50 lakh to buy a house after 10-15 years. I can save up to ₹20,000 a month and have a high risk appetite. Please suggest some equity schemes in which I can invest.

Padmini Vaithianathan

There seems to be some disconnect between your risk appetite and return expectation. If you invest ₹20,000 every month for 15 years, at a fairly conservative 10 per cent annual return, you will be able to accumulate more than ₹83 lakh.

If you need only ₹50 lakh, you can get there by simply investing the ₹20,000 in a recurring deposit.

So, you can either opt to take lower risks or go for higher returns in line with your appetite and have a target that’s a bit more ambitious. Answering this question is important as only then can the most suitable portfolio be suggested.

The other important points you need to note are that, one, inflation needs to be factored into your calculations on the cost of housing.

You may wind up requiring a lot more than ₹50 lakh, 15 years down the line. Two, given that you are young, it is also desirable to take a loan to fund a portion of the cost of the house, as it would give you tax benefits and would also free up cash flows.

Now, split ₹20,000 as follows: invest ₹5,000 each in Franklin India Bluechip and Birla Sun Life Frontline Equity, which are established large-cap names. Park ₹3,500 each in Mirae Asset India Opportunities and Franklin India High Growth Companies, which are high-quality multi-cap schemes.

The balance ₹3,000 can be invested in ICICI Pru Value Discovery, a mid-cap fund with a proven record.

The portfolio suggested involves taking only reasonable levels of risk, especially given the timeline, your risk appetite, and return expectations. But it may still be enough to enable you to reach your target.

You must also try to diversify into debt (PPF, NSC) and gold later on.

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