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A cumulative monthly investment of Rs 35,000 via SIP into three different mutual fund schemes is adequate enough to reach the target of Rs 11.50 crore at an estimated annual return of at least 12%.
- HDFC Nifty 50 Index Fund - 10,000
- Motilal Oswal Midcap Fund - 13,000
- Nippon Small Cap Funds - 12,000
Is the above selection of funds and SIP amount enough to achieve my long term goal? Please analyse the portfolio and advise accordingly.
Reply by Raj Khosla Founder and MD MyMoneyMantra.com
Assuming 6% as an average rate of inflation, the inflation-adjusted retirement corpus of Rs 2 crore after 30 years escalates to Rs 11.50 crore. A cumulative monthly investment of Rs 35,000 via SIP into three different mutual fund schemes is adequate enough to reach the target of Rs 11.50 crore at an estimated annual return of at least 12%.
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You’ll be investing a total of Rs 1.26 crore, provided you keep the yearly outflows constant during the 30-year-long period. The gross proceeds stands at Rs 12.35 crore with a pre-tax return of Rs 11.09 crore.
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The 10-year annualised returns for HDFC Nifty 50 Index Fund, Motilal Oswal Midcap Fund and Nippon Small Cap Fund are 12.76%, 21.23% and 23.40%, respectively.
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Given your moderate-to-high risk-taking capacity, you can modify the proportions after a review period of every 3 years as per the performance of the funds and your risk appetite.
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(Views expressed by the investment expert are his/her own. E-mail us your investment queries at askmoneytoday@intoday.com. We will get your queries answered by our panel of experts.)
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