I am a 37-year-old professional. I started my MF investments 4 years ago. Currently, my portfolio has Rs 3,000 in the UTI Nifty 50 Index fund and 2K in the Mirae Asset emerging blue chip fund.
The goal is wealth creation in another 7 years. Other than this I have been investing Rs 17,000 per month into LIC Jeevan Umang.
Now, is it okay to continue my investments? Should I add a small-cap MF to my portfolio? Is it the right time to start an SIP into a small cap? Which small-cap do you recommend?
Reply by Mayank Bhatnagar, Co-founder and COO, FinEdge
With a 7-year time frame, you have ample time to build an investment corpus and hence, to begin with, you could replace the UTI Nifty 50 Index fund with a more aggressive mid- or small-cap fund.
Some funds in this category that could be considered are Franklin India Smaller Companies Fund, Kotak Emerging Equity Fund and Invesco Mid Cap Fund.
You could also complement your investment in the Mirae Asset Emerging Blue-Chip fund, which is a Large and Mid-Cap Fund with a Flexicap fund. Flexicap funds, with holdings in various categories, are ideal to invest in for your longer-term goals.
Your long-term investments should also have the capacity to beat inflation by at least two times; unfortunately, this is an aspect where most insurance products fall short. Therefore, it might be advisable to explore purchasing a Term policy specifically for risk coverage rather than investing in your current insurance policy.
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Remember that a process focusing on investing discipline and decision-making based on informed risks remains key to investing success. Finally, I suggest that you engage with an investment expert who can create a personalised investment plan that is unique to your goals and aspirations.
(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.)