22.8 C
New York

How much should you invest for ₹1 cr education corpus?


I am 31 years old and have started investing in mutual funds in the last two years. I want to create a 2 crore corpus in 15 years, besides 1 crore for the education of my daughter who is 2 years old. So far, I have invested 4 lakh in mutual funds. I am investing 30,000 towards SIP in the following funds —Quant Active Fund, Nippon India Small Cap Fund, Tata Digital India Fund and Nippon India Pharma Fund. Please tell me how much I should invest in SIP every month?

— Name withheld on request

If we map your existing portfolio of 4 lakhs to your daughter’s education, then you will have to invest 18,000 every month for the next 16 years to create the corpus of 1 crore at a 10% p.a.

If we assume a return of 12% p.a., then you will have to invest 14,000 per month. Similarly, for your wealth creation, you will have to do SIPs of 50,000 if the portfolio return is 10% p.a. and 42,000 if the return is 12% p.a., assuming a horizon of 15 years. You will have to invest 56,000 to 68,000 every month to achieve both objectives.

This may look difficult at present as you are investing 30,000 every month. However, if you increase this SIP amount every year by 12% then you will also be able to achieve both these goals.

You can try to create a better blend of funds in your portfolio. Since you started investing in the last couple of years when the markets have been doing well, the fund selection appears to be based on near-term performance, which is not the best way of investing in mutual funds.

You are investing in thematic and sectoral funds like digital and pharma which can be avoided at this stage as these funds carry higher risk and are more volatile. You may consider the following funds to diversify across market capitalization and sectors as well. UTI Nifty Index Fund (20%), Mirae Asset Large Cap (20%), Parag Parikh Flexi Cap (20%), Canara Robeco Emerging Equities (20%), Nippon India Small Cap Fund (10%), Quant Active Fund (10%).

Harshad Chetanwala is co-founder at MyWealthGrowth.com.

Subscribe to Mint Newsletters

* Enter a valid email

* Thank you for subscribing to our newsletter.

Denial of responsibility! - If you are a regular visitor then ignore this...
Read Full Details

“If you have any Query Related This Post then here is the Source Link


Please enter your comment!
Please enter your name here

Related articles

Recent articles

How to whitelist website on AdBlocker?

How to whitelist website on AdBlocker?

  1. 1 Click on the AdBlock Plus icon on the top right corner of your browser
  2. 2 Click on "Enabled on this site" from the AdBlock Plus option
  3. 3 Refresh the page and start browsing the site