Q Hi iam 48 years old and started investing in nissan small cap fund-growth, canara robeco bluechip equity,uti nifty 50 index fund, kotak emerging equity fund and motilal oswal midcap fund @ 2000 in each fund for last one year. I would like to invest in other good funds for my children.
Ans: You have started disciplined investing for your children's future. That is commendable. You hold five mutual funds, including an index fund, with Rs?2,000 SIP in each. You now wish to invest more. Let’s refine your plan to build a smart, child-focused portfolio.
Assessing Your Current Mutual Fund Mix
You invest in small?cap, blue?chip, flexi?cap, and mid?cap categories.
You also hold an index fund.
Your SIP amount per fund is modest, given your age and goal horizon.
The index fund is passive. It cannot adapt to market cycles.
Active funds offer better downside risk control via manager decisions.
Direct plans offer no advice or rebalancing support.
Consider shifting to regular plans through a CFP?backed MFD.
This gives you professional reviews, asset allocation adjustment, and behavioural guidance.
Why Actively Managed Funds Beat Index Funds for Children’s Goals
Index funds only mimic the market—they don’t adapt in slowdown.
They lack dynamic allocation across sectors.
Actively managed funds can trim exposure in overheated markets.
They bring risk defence and strategic rebalancing.
This is critical when funding future education or marriage needs.
Categories to Add for a Balanced Children’s Portfolio
Goals for your children could be 10–15 years away. Here’s a well-rounded approach:
Aggressive Hybrid Fund
Offers equity growth + some debt cushion
Multi?cap Equity Fund
Covers large, mid, and small caps evenly
Debt Fund (Short/Medium Term)
Provides stability as milestones near
Gold or Commodity?Linker Fund
Acts as an inflation hedge
Solution?Oriented Children’s Fund
Hybrid plan with lock?in and discipline features
These categories add stability and align with long-term children's goals.
Why a Children’s Solution?Oriented Fund Works Well
Balanced equity–debt fund with smart mix
Lock?in prevents premature withdrawals
Good historical returns (12–20% CAGR)
Active manager ensures right allocation at each stage
Supports goal?based discipline and compounding
Structuring Your SIP Investments
Let’s restructure your SIP plan based on Rs?2,000 per fund:
Maintain existing investments (Rs?10,000 total SIP)
Add new SIPs:
Aggressive hybrid fund: Rs?2,500
Multi?cap fund: Rs?2,500
Debt fund: Rs?2,000
Gold?linker fund: Rs?1,500
Children’s solution?oriented fund: Rs?1,500
Total new SIP: Rs?10,000
Total SIP becomes Rs?20,000 monthly
This builds a strong, diversified base for future goals.
Lump?Sum Additions at Milestone Milestones
Besides SIP, plan lump?sum additions such as:
Birthday/anniversary gifts
Bonuses
Surplus savings annually
These help fast-track corpus growth and balance your portfolio.
Periodic Rebalancing and Goal Tracking
Every year, review portfolio under CFP?MFD guidance:
Check allocation drift between equity, debt, gold
Adjust SIPs if equity or gaps misalign with goals
Move part of equity to debt as goal nears
Monitor fund performances vs peers and benchmarks
Such discipline ensures alignment with your timeline and objectives.
Tax Awareness on Mutual Fund Gains
Remember taxes as you plan withdrawals:
Equity LTCG above Rs 1.25 lakh taxed at 12.5%
Equity STCG taxed at 20%
Debt fund gains taxed per your slab
Plan redemptions across years. Keep gains within exempt limit where possible.
Keeping it 360?Degree: Safety Nets Too
Emergency Fund: Maintain 6 months’ household expenses in liquid fund
Term Insurance: Ensure adequate cover for your family
Health Insurance: Cover both children and parents
These help avoid disrupting children’s goals due to emergencies
Finally
Your existing SIPs are a good start. Now expand wisely.
Use active, goal?aligned funds for stability and growth.
Allocate across equity, debt, gold, hybrid, and children’s funds.
Increase SIP to Rs 20,000 monthly, plus annual lumpsums.
Shift to regular?plan funds under CFP?led MFD for expert monitoring.
Review portfolio yearly, rebalance to stay on track.
Keep emergency funds and insurance in place.
With this multi-pronged, 360-degree approach, you can build a strong financial base for your children’s future milestones. If you’d like, I can help craft specific allocation and review schedule.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment