February 18, 2011 10:28 am
Where to invest 1 Lacs except FD, PPF, Debt Fund. Is it nice to invest in good 5 Equity fund (20000 rs in each fund) in current market for Next 6-7 Year ?
Investing in Equity funds for 6-7 years is a good thing that you can do for your money. But its always good to have some cushion to the portfolio through mix of Equity & Debt.
Since you have a long-term horizon, you can consider investing in a mix of Equity Diversified & Balanced Funds which offer upto 15-20% exposure to Debt on a continuous basis. And you can start re-balancing your portfolio towards higher debt component beginning 5th or 6th year to secure your capital (since you have horizon for 6-7 years).
You can split this 1 lakh in following 5 funds over next 2-3 months. Not advisable to invest all together –
1. Rs. 25,000 in Birla Sun Life Dividend Yiled
2. Rs. 25,000 in ICICI Prudential Discovery Fund
3. Rs. 15,000 HDFC Equity Fund
4. Rs. 15,000 in Reliance Regular Savings Balanced
5. Rs. 20,000 in HDFC Children’s Gift Investment OR HDFC Balanced Fund
This portfolio would help you adequately diversify your equity part of portfolio in Large, Mid & Small-cap companies with upto 45% in Large-cap, 35% in mid-cap & around 20% in Small-cap companies.
This portfolio has given a very good return in the past (around 16% CAGR for last 3 years). Ofcourse, past performance is no guarantee but then there is not much available to rely on except the past performance & consistency of returns to decide 🙂
Note: This is just a suggestion. Its advisable to study all these funds in detail & take a decision.
Hope this helps.
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