Hi, I am looking for good mutual fund scheme which will help me accumulate funds for my kids post graduation. He is 14yr old so I would need this sum by 8th yr. Can u pls suggest good schemes and amount required to achieve this goal.

Ans: These are good funds and suitable for you.

Ans: Hello Norris. I understand your goal is for child education with the time horizon of minimum 4 years. Taking all factors into consideration, I would suggest you invest approximately 1 L monthly in the Large & Midcap, flexicap, Midcap and small cap categories in order to achieve your goal.

Ans: Hello Ravi and thanks for writing to me.

I only discuss mutual funds in this section. As I understand, you have Rs.15,000 to invest every month and you require a corpus in around 15 years to pay for their higher education. As your time horizon is long, you can consider starting monthly SIP's in:

1-UTI Small Cap Fund-Rs.5,000
2-Sundaram Small Cap Fund-Rs.5,000
3-DSP Midcap Fund-Rs.5,000

Mid and small cap schemes can be more volatile than large cap funds, but also offer the chance of generating higher returns over the long term. After some 9 or 10 years, you can consider pausing the SIPs in the small and mid cap funds and then consider investing in large cap and balanced advantage funds as they tend to be less volatile.

I do not find any goal or target amount. If you provide that information, then I may recommend other schemes.


Coming to the second part of your question, mutual funds offer 2 types of plans, one is called the regular plan and the other is called a direct plan. In a regular plan, there is a mutual fund distributor involved and the mutual fund company pays the agent a commission and hence the returns are a little lower than the direct plan. But mutual fund distributors provide valuable advice to clients on how to structure, rebalance and maintain a portfolio. So the excess 1%-2% returns should not be the only criterion to choose a direct plan.

I urge you to consult a financial advisor who can recommend schemes based on your own risk appetite and goals for your kids' education.

Ans: Given your investment horizon for retirement and your sons' education, you have a long-term horizon which allows you to consider equity-oriented mutual funds for potentially higher returns. Here are some suggestions tailored to your needs:

For Retirement (Long-Term):
Large Cap Funds: These funds invest in well-established companies, offering stability and growth potential. Given your longer investment horizon, consider allocating a portion to large-cap funds to provide stability to your portfolio.
Multi-Cap Funds: These funds offer diversification across market capitalizations and are suitable for long-term wealth creation. They can adapt to different market conditions, providing flexibility to the fund manager.
For Sons' Education (Medium to Long-Term):
Balanced Funds or Hybrid Funds: These funds invest in both equities and debt, offering a balance between growth and stability. They can be suitable for medium to long-term goals like your sons' education.
Children's Gift Funds or Children's Education Funds: Some mutual funds offer specific funds designed for children's future needs, providing a tailored solution for education expenses.
Considering your investment amount and goals, you can consider investing in a combination of the above-mentioned funds to achieve diversification and align with your financial goals. Here's a potential allocation:

Large Cap Funds: 40%
Multi-Cap Funds: 40%
Balanced or Hybrid Funds: 20%
Remember, it's essential to review your investments periodically and adjust your portfolio as needed based on performance, changing financial goals, and market conditions. Consult with a financial advisor to ensure your investment strategy aligns with your financial goals, risk tolerance, and investment horizon.

Ans: Given your goal of investing a lump sum of Rs. 1 lakh annually for your children's future over the next 15 years, with a planned 10% increase in the investment amount each year, let's devise an investment strategy tailored to your objectives.
Considering the long investment horizon and the goal of wealth accumulation for your children, a diversified portfolio of mutual funds with a focus on growth potential and risk management would be appropriate. Here's a suggested allocation:
1. Equity Funds: Allocate a significant portion of your investment towards equity funds to capitalize on the potential for higher returns over the long term. Opt for a mix of large-cap, mid-cap, and multi-cap funds to diversify across market segments and mitigate risk. These funds offer exposure to quality stocks with strong growth prospects and can help in wealth creation over time.
2. Debt Funds: Incorporate debt funds into your portfolio to provide stability and reduce overall volatility. Debt funds invest in fixed-income securities such as government bonds, corporate bonds, and money market instruments. They offer steady income streams and can act as a buffer during periods of market turbulence. Consider allocating a portion of your investment to debt funds to balance risk and optimize returns.
3. Balanced Funds: Balanced funds, also known as hybrid funds, combine equity and debt instruments in a single portfolio. These funds offer a balanced approach to investing, providing growth potential from equity exposure while offering downside protection through debt allocation. Including balanced funds in your portfolio can help in achieving stable returns while managing risk effectively.
4. Children's Funds: Some mutual funds are specifically designed for children's education or future needs. These funds typically have longer investment horizons and may offer unique features such as lock-in periods or dedicated investment strategies tailored to children's goals. Exploring children's funds can provide a focused approach to investing for your children's future needs.
Regularly review your investment portfolio and adjust your allocations as needed to stay aligned with your financial goals and risk tolerance. Additionally, consider seeking guidance from a Certified Financial Planner to customize your investment strategy based on your specific circumstances and objectives.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in