Good after noon My Self Hemant Pal, age is 42 years. I am investing Rs 4000/M in DSP Small cap for last 8 years. I would like to invest more with horizon of 7 -15 years ( Two Kids, with the Daughter’s age 7 and son’s age 9 years). 8 years duration : for Son’s education purpose (approx. 50 lacs) 10 years: for Daughter’s education purpose (approx. 50 lacs) 14-15 years: for Marriage of both kids ( approx. 50 lacs each) Kindly advice for suitable MF.

Ans: No changes are required; however, please keep the expectation of returns between 12% and 15%.

Basic thumb rule is risk free returns (10 years govt bond returns) + inflation + equity risk premium.

Ans: Please find few top rated schemes for your consideration:

Equity - Multi Cap Fund:

1. UTI Equity Fund – Growth
2. Axis Multicap Fund – Growth

Equity - Large Cap Fund:

1. UTI Mastershare Unit Scheme - Growth Plan
2. LIC MF Large Cap Fund-growth

Equity - Mid Cap Fund:

1. MOSL Midcap 30 Fund – Growth
2. DSP midcap – growth

Equity - Small Cap Fund:

1. Kotak Small Cap Fund – Growth
2. Axis Small cap Fund - Growth

Equity Focused Fund:

1. Axis Focused 25 Fund Growth
2. MOSL Focused 25 Fund Growth

Ans: Hemant, it's commendable that you're planning ahead for your children's education and marriage. Given your investment horizon of 7 to 15 years, here's a tailored suggestion:

Equity Mutual Funds for Long-Term Growth: Since you already have experience investing in DSP Small Cap, you may consider continuing with it for your son's education goal. For your daughter's education and both kids' marriage goals, you can diversify into a mix of large-cap, multi-cap, and balanced funds for stability and growth potential.
Large-Cap Funds: These funds invest in established companies with a proven track record. They offer stability and are suitable for long-term goals like education and marriage. Consider allocating a portion of your investment to large-cap funds to balance risk.
Multi-Cap Funds: These funds invest across companies of different market capitalizations, offering diversification and potential for higher returns. They are suitable for longer investment horizons and can help you achieve your goals over time.
Balanced Funds: Also known as hybrid funds, these invest in a mix of equity and debt instruments, providing a balanced approach to risk and return. They can be ideal for medium to long-term goals like education and marriage.
Regular Review and Rebalancing: Periodically review your investment portfolio to ensure it remains aligned with your goals and risk tolerance. Rebalance your portfolio if necessary to maintain the desired asset allocation.
Remember to consider factors like risk tolerance, investment horizon, and financial goals when selecting mutual funds. It's also advisable to consult with a certified financial planner for personalized advice based on your specific circumstances.

Ans: Planning for Your Future: Retirement, Education & Growth
At 44, you're making a smart move by planning for your future goals: retirement, child's education, and long-term wealth creation. A single mutual fund might not be the best fit for all these needs, but let's explore some options:

Diversification is Key

Since your goals have different time horizons (retirement is farther away than your child's education), it's wise to diversify your investments. This means spreading your money across different asset classes to manage risk.

Actively Managed Funds for Growth

Given your long-term perspective and willingness to take on some risk, actively managed funds can be a good option. Here's why:

Outperforming the Market: Actively managed funds have fund managers who try to pick promising stocks and beat the market average. This has the potential for higher returns compared to passively managed options like index funds.
Matching Risk to Goals

Here's a possible approach to consider, but remember, this is general advice:

Retirement (Long Term): Invest a larger portion (say 60-70%) in aggressive actively managed funds like multi-cap funds. These invest in a mix of large, mid, and small-cap companies, offering growth potential along with diversification.

Child's Education (Mid Term): Allocate a mid-range portion (say 20-30%) to a balanced actively managed fund. These funds balance between equity and debt, offering some growth potential with a lower risk profile compared to aggressive funds.

Remember, your situation is unique. A Certified Financial Planner (CFP) can help you create a personalized asset allocation plan based on your risk tolerance and specific goals.

Rs. 1 Lakh Lump Sum Investment

A lump sum investment of Rs. 1 lakh can be a great way to jumpstart your investment journey. Consider investing across different actively managed funds based on your asset allocation plan.

Regular Investment (SIP) is Powerful

Don't stop with the lump sum! Regular investments (SIPs) can be a powerful tool for long-term wealth creation. Even a small amount invested regularly can benefit from rupee-cost averaging, where you purchase more units when the price is low and fewer units when the price is high.

A CFP Can Help You:

Choose the Right Funds: They can recommend actively managed funds with a good track record and experienced fund managers.

Asset Allocation: They can advise on the right mix of asset classes (multi-cap, balanced, etc.) for your goals.

Review and Rebalance: A CFP will monitor your progress and adjust your asset allocation as needed to stay on track.

Taking Charge of Your Tomorrow

By planning and investing for your future, you're taking control of your tomorrow. Actively managed funds within a diversified portfolio can be a powerful tool for growth, but remember, they also carry risk. A CFP can help you navigate your options and make informed investment decisions.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in