Good afternoon. Please inform what should be corpus fund available for following situation - Family of 2, age 55 Years, no loans, own house, current monthly expenses Rs. 60K, life expectancy say up to 80 years (if all goes well) and retirement in 4 years.

Ans: Planning for your daughters' education is a wise decision. To build a corpus of 1 - 2 crores over the next decade, you have various options for lump sum and SIP investments.

For a lump sum investment of 10 lakhs, you might consider allocating it across a mix of equity and debt funds to balance risk and return. Equity funds typically have higher potential returns but also higher volatility, while debt funds offer stability but lower returns.

Here's a potential allocation:

Equity Funds (70%): Invest 7 lakhs in a mix of large-cap, mid-cap, and multi-cap funds for long-term growth potential.
Debt Funds (30%): Allocate 3 lakhs to debt funds for stability and capital preservation.
For SIP investments of 20,000 per month for 5 years, you can diversify across various mutual funds to spread risk and optimize returns. Here's a suggested allocation:

Large-cap Funds: 40% of SIP amount
Mid-cap Funds: 20% of SIP amount
Multi-cap Funds: 20% of SIP amount
Debt Funds: 20% of SIP amount
Remember to review your portfolio periodically and adjust your investments based on changing market conditions and your daughters' education timelines. Consider consulting with a certified financial planner for personalized advice tailored to your specific goals and risk profile.

Ans: Your goal of creating a corpus fund for your daughters' education is admirable. With a well-planned strategy, you can achieve this target.

Current Investment Overview

You are investing Rs 10,000 per month in Canara Robeco Small Cap Fund and Rs 2,500 per month in Mirae Asset Emerging Bluechip Fund. These funds are strong performers in their categories, which is a good start.

Lump Sum Investment Strategy

Investing Rs 10 lakhs as a lump sum can provide a solid foundation. Consider allocating this amount across multiple funds to diversify and reduce risk. Choose funds with a mix of large-cap, mid-cap, and small-cap exposure.

Monthly SIP Investment Strategy

To build a corpus of Rs 1-2 crore, a disciplined SIP approach is crucial. You can invest Rs 20,000 per month across a diversified set of funds. This systematic approach allows you to benefit from rupee cost averaging and market volatility.

Optimising Fund Selection

Evaluate funds with consistent performance, lower expense ratios, and good historical returns. Diversify across equity, hybrid, and debt funds to balance growth and stability. This blend maximises potential returns while managing risk.

Advantages of Actively Managed Funds

Actively managed funds offer professional oversight, adapting to market changes. This flexibility can result in higher returns compared to index funds, which simply track market indices.

Disadvantages of Index Funds

Index funds lack the professional management that actively managed funds provide. They may not perform well during market downturns, limiting potential returns.

Benefits of Investing through a Certified Financial Planner

A Certified Financial Planner can provide personalised advice and select funds tailored to your goals. They offer expertise in creating a balanced and effective investment portfolio.

Risks of Direct Funds

Direct funds may seem appealing due to lower expense ratios, but they lack the professional guidance available through regular funds. Investing through a certified planner ensures informed decision-making and portfolio management.

Periodic Review and Rebalancing

Regularly reviewing and rebalancing your portfolio ensures it remains aligned with your financial goals. This approach helps optimise returns and manage risks effectively.

Creating a Comprehensive Financial Plan

In addition to mutual funds, consider other aspects like emergency funds, insurance, and tax planning. A holistic financial plan ensures a secure and well-rounded approach to your financial goals.

Monitoring Market Trends

Stay informed about market trends and economic factors. This knowledge helps you make timely adjustments to your investments, maximising returns and mitigating risks.

Conclusion

Your dedication to investing for your daughters' education is impressive. By strategically allocating your lump sum and SIP investments, and seeking professional guidance, you can achieve your goal of building a substantial corpus for their future education needs.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: Considering your goal of building a corpus fund of 1-2 crore in 10 years for your daughters' future, there are a few approaches we can consider. Here are some options:

Lump Sum Investment:
You can consider allocating your lump sum of INR 10 lakhs across a diversified portfolio of mutual funds. Here are some categories you may want to explore:

Large Cap Funds
Mid Cap Funds
Multi Cap Funds
Balanced Advantage Funds
It's important to diversify your investments across different asset classes and fund categories to mitigate risk. You can consult with a financial advisor to tailor the allocation based on your risk tolerance and investment objectives.

SIP Investments:
For SIP investments averaging between INR 40,000 to 50,000 per month for 5 years, you have a substantial amount that can be spread across different funds. Here's a suggested allocation:

Large Cap Funds: 40-50%
Mid Cap Funds: 20-30%
Small Cap Funds: 10-20%
Balanced Advantage Funds: 10-20%
By diversifying your SIP investments across these categories, you can benefit from the growth potential of different segments of the market while managing risk. Ensure you review and rebalance your portfolio periodically to align with your financial goals and market conditions.

Remember, it's crucial to conduct thorough research or seek advice from a financial advisor before making any investment decisions. Additionally, consider factors such as your risk appetite, investment horizon, and financial goals when selecting funds.

Ans: To achieve your financial goal for your daughters' future, you can consider a combination of equity mutual funds for long-term growth and debt investments for stability. For the lump sum investment of INR 10 lakhs, you can allocate a portion to diversified equity funds and the remainder to debt or balanced funds for stability. For the monthly SIP of INR 40,000 to 50,000, you can diversify across large-cap, mid-cap, and multi-cap equity funds, along with a portion in debt funds for balance. Ensure to review and adjust your portfolio regularly to align with your financial goals and risk tolerance.