I am investing in the following mutual funds through SIPs:
Axis Long Term Equity Fund: Rs 6,000
Aditya Birla Sun Life Tax Relief 96 Fund: Rs 4,000
Kotak Standard Multicap Fund: Rs 10,000
ICICI Prudential Bluechip Fund: Rs 10,000
Principal Hybrid Equity Fund: Rs 10,000
Are these funds in line with my risk appetite which is moderate to high? The total fund value of my portfolio is Rs 9 lakh. How much will be the approximate value of my mutual fund portfolio by 2030?
-Teby Baaby
You are currently investing in two tax saving mutual funds (ELSS), multi cap scheme, large cap scheme, and aggressive hybrid scheme. You can treat your tax saving funds as multi cap schemes. That means, you have half of your portfolio in multi cap schemes that are suitable for investors with a moderate risk profile. Large cap and aggressive hybrid schemes are typically recommended to conservative or new investors. So, half of your portfolio is invested in schemes that are meant for investors with a conservative risk profile. In short, it is not line with your stated risk profile of moderate to aggressive.
However, this doesn’t mean you have hurry to recast your mutual fund portfolio. If you are okay with the portfolio and risk-return rewards, you can continue with your investments. However, if you want to change it to suit your stated risk profile, the first thing for you to do is to reassess your risk profile. You may take an online quiz to assess your risk profile and define is sharply. If the result allows you to take more risk and you are ready to take the extra risk for extra returns, you can consider investing in mid cap schemes.
Mutual funds do not guarantee any returns. You can assume an annual return of 12% over a long period of your equity mutual funds for the purpose of calculation. However, remember this assumption is based on historical long-term returns, and the actual return would depend on the performance of investments made by your schemes.
