I have 10 lakh rupees in FD which I want to move in MF. Please suggest some fund for lump sum amount to invest for 5-7 years.

Ans: Our investment decisions should be matched with our risk appetite and investment horizon.

You can invest in a good Mid or Small Cap Fund if you have a time period of 10 years and a matching risk profile. PGIM India Mid Cap Opportunities Fund/Nippon India Small Cap Fund would be good options for you. In the initial 3 years, you might face negative returns as equity oriented funds are very volatile in the short term but you can expect the returns ranges between 12% to 15% in 10 years of investment horizon.

Ans: Hello Murali and thank you for writing to me.

Generally, you can diversify your investment of Rs. 10 lakhs in 5 different schemes equally, such as:

1-DSP Quant Fund
2-Samco Flexicap Fund
3-Nippon India Multi Asset Fund
4-UTI MNC Fund
5-Axis ESG Fund

If you could state your risk appetite, specific goals, time horizon, etc., I may recommend other schemes to you.

Ans: FD is a Risk Free Asset. But will not beat inflation. Also it is not tax efficient.
Debt Mutual Funds have low risk. Again, this also will not beat inflation. Tax deferment is possible.
Equity funds have high risk. This will surely beat inflation in the long run. Tax efficient.
Instead of Lumpsum, you may consider STP in Actively managed diversifed equity funds, if you have a right financial planner / a professional mutual fund distributor. If you want to do it yourself, then you can settle for conservative index funds.

Ans: Dear Friend,
Thank you for your query. 1.5 Years is a very short time for getting high returns. Investing Rs 10 lakhs in mutual funds for a short-term horizon of 1.5 years requires a cautious approach. For such small period, you should look for low to moderate-risk funds that offer stability with reasonable returns, as investing in high-risk equity funds might be too volatile for a short time frame. Since your investment horizon is just 1.5 years, avoid high-risk equity mutual funds as they can be volatile in the short term. Check for exit loads and tax implications before investing. Most short-term capital gains (if you withdraw before 3 years) from debt funds are taxed according to your income tax slab.
You have to evaluate your risk Appetite , Short-Term Debt Funds are invested in government securities, corporate bonds, and other debt instruments with short maturities, offering stability and moderate returns. For a 1.5-year investment, these are ideal as they are less volatile. you can expect 5-7% per annum Returns. You can think of
• ICICI Prudential Short Term Fund
• HDFC Short Term Debt Fund
• Axis Short Term Fund
• ICICI Prudential Corporate Bond Fund
• HDFC Corporate Bond Fund
• Aditya Birla Sun Life Corporate Bond Fund.
Best regards,
Nitin Narkhede
Founder & MD, Prosperity Lifestyle Hub https://Nitinnarkhede.com
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