I have been investing 30,000 per month through 1. SBI smallcap fund 10k, 2. Nippon multicap fund 10k and SBI large and mid cap fund 10K. Please advise if I should continue with the same. How much time will these take to generate 1 Cr corpus

Ans: These funds are fine; please continue

Ans: To achieve a 1 Cr corpus with a 30k monthly SIP, it typically takes around 20-25 years, assuming an average annual return of 10% to 12% from equity investments. However, market conditions and fund performance can impact the actual time frame. Regular review and adjustment of investments are essential for staying on track towards your goal.

Ans: Reviewing Your Current Investments
Rakesh, you have been diligently investing Rs. 3,000 monthly in each of the following funds for the past year. Let's assess them.

Fund Categories and Assessment
Technology and Pharma Sector Funds
High Growth Potential: These sectors can offer high returns.
Volatility: They can be highly volatile.
Blue Chip and Midcap Funds
Stability and Growth: Blue chip funds provide stability, while midcap funds offer growth potential.
Balanced Risk: These funds balance risk and reward.
Small Cap and Energy Opportunities Funds
High Returns: Small cap funds can provide high returns.
Higher Risk: They come with higher risks.
Sector-Specific Risks: Energy sector funds are subject to market and sector-specific risks.
PSU and Defence Funds
Niche Investments: These funds focus on specific sectors.
Cyclic Performance: Their performance can be cyclical and subject to government policies.
Gold and International Funds
Diversification: Gold provides a hedge against inflation. International funds offer global exposure.
Currency Risk: International funds come with currency risk.
Disadvantages of Direct Funds
Direct funds might seem cost-effective but have certain drawbacks:

Lack of Guidance: Investors might miss expert advice.
Higher Risk: Without a certified financial planner, risks might be higher.
Benefits of Regular Funds
Investing through a certified financial planner provides these benefits:

Expert Advice: Ensures informed decisions.
Risk Management: Helps in balancing risk.
Personalized Strategy: Tailors investments to your needs.
Creating a Corpus of Rs. 1 Crore
To create a corpus of Rs. 1 crore, consistent investments and a well-diversified portfolio are essential. Here’s how you can approach it:

Step 1: Review and Rebalance
Assess Performance: Review the performance of each fund.
Rebalance Portfolio: Ensure a balanced mix of large-cap, mid-cap, and sector funds.
Step 2: Increase SIP Amount
Annual Step-Up: Increase your SIP amount annually to accelerate growth.
Focus on Growth Funds: Allocate more to high-growth potential funds.
Step 3: Stay Consistent
Long-Term Commitment: Stay invested for the long term to benefit from compounding.
Regular Monitoring: Monitor your portfolio with your certified financial planner.
Step 4: Diversify Further
Avoid Over-Concentration: Ensure your portfolio is not overly concentrated in one sector.
Include Hybrid Funds: Consider hybrid funds for a balanced risk-reward ratio.
Estimating the Investment Duration
Assuming an average annual return of 12%, you can achieve your goal with consistent investments. Here's a rough estimate of the duration required:

Initial Investment: Rs. 30,000 per month.
Estimated Duration: Approximately 15-20 years, considering market fluctuations and consistent returns.
Final Insights
Creating a corpus of Rs. 1 crore requires a well-planned and disciplined approach. Regularly review and rebalance your portfolio with the help of a certified financial planner. Ensure you diversify your investments and stay committed for the long term.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: To achieve a corpus of Rs 4 crore in 18 years, you'll need to assess whether your current SIPs and fund selection are adequate.

Current Investments:
Your total monthly SIP is Rs 68,000. Over 18 years, assuming an average return of 12 per cent per annum (which is reasonable for a well-diversified equity portfolio), here's a rough estimate:

Future Value of SIPs:

Using the SIP formula, the corpus generated by Rs 68,000 monthly SIPs over 18 years at a 12 per cent annual return would be approximately Rs 3.8 to 4 crore.

Analysis:

Fund Selection:

• Equity Funds: Most of your funds are equity-oriented, which is good for long-term growth.
• Sectoral Funds: You have multiple sectoral/thematic funds (like technology, energy, digital, etc.). These can be volatile, and while they offer higher growth potential, they also carry higher risk. It's essential to ensure you're comfortable with this level of risk.
• Debt Fund: HDFC Hybrid Debt Fund and Nifty G-Sec Index Fund add a bit of stability to your portfolio, but they're relatively conservative compared to pure equity funds.

Diversification:

Your portfolio is well-diversified across sectors and asset classes. However, it's important to periodically review and rebalance your portfolio to align with market conditions and your risk tolerance.

Additional Investments:

If you want to be more certain of achieving or even exceeding the Rs 4 crore target, you could consider increasing your SIPs gradually as your income increases.

Another approach is to invest any bonuses or lump sums you receive into these funds or consider adding new funds to further diversify.

Conclusion:

You're on track to achieve your target based on current contributions. However, it's always good to review your portfolio annually, consider increasing SIPs as your financial situation improves, and consult with a financial advisor to ensure your investments are aligned with your goals and risk tolerance.