My daughter now 20 year old i want to start sip 25 k p.m. for 25 years please suggest best fund for best return in long term
Ans: When selecting mutual funds for your daughter's SIP investment of 25k per month for 25 years, it's essential to consider various factors to maximize returns over the long term:
Investment Horizon: Since you have a 25-year investment horizon, you can afford to take higher risks and invest in equity-oriented funds that have the potential to deliver superior returns over the long term.
Diversification: Opt for well-diversified equity funds that invest across different sectors and market capitalizations to spread risk. Diversification helps mitigate the impact of volatility and specific sectoral risks.
Fund Performance: Evaluate the historical performance of mutual funds by analyzing their long-term returns relative to their benchmark indices and peers. Choose funds with a consistent track record of outperformance across market cycles.
Fund Manager Expertise: Assess the expertise and experience of the fund managers managing the schemes. A skilled and experienced fund management team is crucial for making informed investment decisions and navigating market volatility effectively.
Expense Ratio: Consider the expense ratio of mutual funds, which directly impacts your overall returns. Lower expense ratio funds tend to provide better net returns to investors over the long term.
Risk Profile: Align the mutual fund selection with your daughter's risk tolerance and investment objectives. Since she is young and has a long investment horizon, you can consider investing in equity funds with a higher risk-return potential.
Regular Review: Periodically review the performance of the selected mutual funds and make necessary adjustments to the portfolio based on changing market conditions, fund performance, and investment goals.
By carefully considering these factors and selecting well-managed, diversified equity funds with a track record of consistent performance, you can potentially maximize returns and achieve your long-term investment objectives for your daughter's future financial goals. It's advisable to consult with a financial advisor to tailor the investment strategy to your specific requirements and risk appetite.