Mutual Funds Investment

POSTED BY desaichinmay22 ON April 19, 2012 8:28 pm COMMENTS (5)

Friends my time horizon is of 5 years. I want a lump sum amount of Rs.15 lacs.
I have selected following funds with monthly contribution of Rs.4500 p.m. for next 5 years.
Assuming a CAGR of 15%, I sincerely hope I will reach my goal.
Kindly suggest the suitability of following funds :-

1. Franklin India Blue Chip – Large Cap.
2. IDFC Sterling Equity – Small Cap.
3. UTI Opportunities- Large & Mid Cap.
4. HDFC Prudence –Hybrid Equity Oriented

5 replies on this article “Mutual Funds Investment”

  1. says:

    Friends I have already posted the amount I want on redemption & my time horizon. I have selected the above funds while assuming a weighted CAGR of 15% over 5 years.But looking at above replies 15% seems to be unreasonable.But I dont understand why so? If it indeed seems unreasonable can anyone give idea as to how can I meet my target?

    1. Dear Chinmay, we are not saying that the 15% return is not possible, what we are merely adding is – to be a bit conservative & to add a word of caution. To reach your target in the given time frame, please calculate @ 10% growth rate & invest mly sums accordingly. In case, the goings are good, you have the option of locking the money in debt funds as & when the Eq. funds equal the target amount.



  2. says:

    Dear Ashal,

    I have computed 4500 p.m. for each fund.So my total monthly contribution would be of Rs.18000 (4500*4). If you have any other suggestion please let me know.

  3. Dear desaichinmay, May I know how did you reach to the calculation that 4500 Rs. mly @ 15% yly rate ‘ll yield you 15L Rs.? As per my calculation it’s not mere 4.04L Rs.

    Although I doubt that you ‘ll be able to earn that 15% yly rate, still the mly contribution comes out around 16800 Rs.

    I do agree here with dear TheZionView. Either prune down your return expectation or be ready for a set back in between.



  4. TheZionView says:

    15% assumption is on the higher side. Keep assumption at 12% which should make 19600 per month in SIP.

    Since the time period is 5 years you will have to be in there for 5 years and redeem at one shot at the end to achieve your target.

    But you might have to plan to redeem from start of 4th year and move the money to debt funds to protect from any market downside based on the value of your fund at that time you can take a call.

    5 years is actually short time to be on equities and it should be managed well to reap the benifits.

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