The Mutual Fund Show: How To Create Wealth For Your Children

Starting early and having more time for accumulation enables faster compounding of money, leading to the creation of wealth for your children's education, according to Kirtan Shah, managing director of Credence Family Office Pvt.

With solution-oriented funds which are focused on achieving a specific goal, it depends on what kind of investor you are, Shah said. "But, sophisticated investors may ignore this category."

He lists the following key features of solution-oriented funds:

• Most schemes are hybrid.

• Performance is not superior versus the flexi-cap.

• TER is higher vs flexi-cap.

• Track record is not very old.

Query 1: I am investing in a few funds and saving for 10 years. I would like to accumulate Rs 75 lakh for my child's education. Are these funds the right choice?

HDFC Balanced Advantage Fund: SIP Rs 5,000.

HDFC Multicap Fund: SIP Rs 5,000.

SBI Bluechip Fund: SIP Rs 10,000.

Parag Parikh Conservative Hybrid Fund: SIP Rs 10,000.

Name: Akshay | Age: 34 years.

Kirtan Shah: It would be fantastic if he could raise his SIP amount. Given that you have a 10-year target, you ought to boost the equity side amount. Continue with your HDFC Multicap Fund and SBI Bluechip Fund. Move your HDFC Balanced Advantage Fund and Parag Parikh Conservative Hybrid Fund into a large and a mid-cap fund.

Query 2: Planning to invest Rs 1 lakh in mutual funds for my son's education and wealth creation. Can you recommend me some schemes?

Name: Prachi | Age: 44 years.

Arnav Pandya: Consider investing in a few equity funds, such as HDFC Flexicap from the flexi-cap category and Canara Robeco Bluechip Fund from the large and mid-cap space. You may also want to explore a hybrid fund like a Balanced Advantage Fund.