• Mutual Funds, one of the best and most commonly used forms of long term investment, have consistently proven to outperform in terms of returns.
Mutual Funds, one of the best and most commonly used forms of long-term investments, have consistently proven to outperform in terms of returns. Investing in mutual funds not only helps investors build long-term wealth but also provides them access to liquidity and portfolio diversification. One of the cheapest investment plans is Mutual Fund SIP, which allows investors to contribute on a regular basis with a minimum monthly contribution of ₹500. Most importantly, investing in mutual funds prevents you from putting all your eggs in one basket as investors can diversify their holdings across a wide variety of securities and asset classes including gold, debt and equity, depending on their risk tolerance and time frame. Can
As an example, let's say you are a conservative investor looking to create a wealth of ₹3 crore over 20 years. What should be your monthly SIP investment amount and which fund category should you choose?
Based on an exclusive interview with CA Manish P Hinger, Founder, Fintu, the spokesperson said that conservative investors prefer to invest their money in debt instruments mainly due to low risk tolerance. However, to build wealth over the long term of 20 or more years, conservative investors should consider investing in equity large-cap funds or equity index funds. Having equity exposure, these mutual fund schemes will give higher returns than traditional debt funds.
“For an individual with a conservative risk profile who plans to accumulate ₹3 crore over a period of 20 years, it is suggested to invest in Equity Large Cap Funds that invest their corpus in companies with large market capitalization or equity index invest a major part of. Fund where a portfolio of stocks designed to mimic the structure and performance of a financial market index. Suppose, if a person is planning to deposit ₹3 crore over a tenure of 20 years, assuming the fund generates an annual CAGR of 12%, the person should start an SIP of around ₹30,000 per month for 20 years need to start. Generate the required funds," said CA Manish P Hinger.
Also, it is a good idea to increase the SIP amount by 10% every year to achieve the target of accumulating the required corpus 3-4 years in advance. In another example, if you increase your monthly SIP by 10% every year, then instead of starting your investment with ₹30,000 monthly, you can start with as low as ₹16,000 per month. Please note that the Large Cap Mutual Fund category has given a CAGR of 13.15% in the last 10 years, and S&P BSE 100 TRI Index has given a CAGR of 13.28% during the same period, which is a good investment for such schemes for investors with a conservative risk appetite. Ideal for. CA Manish P Hinger said that profiles seeking to create wealth in the long term.
Fintoo's founder claims, "It is important to carefully research and compare different mutual funds within a category before making a decision to ensure that they are consistently outperforming their peers and benchmarks." Highly recommended."
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