This is a great time to invest in dynamic asset allocation funds, according to Mohit Gang, co-founder and chief executive officer at Moneyfront. It provides a well-rounded mix of various elements, including a combination of stocks, bonds, certain commodities, assets, and an element of arbitrage that influences and impacts stock taxation, he said.
Desai said that balanced advantage funds should have a minimum time horizon of 4-5 years. The best approach is to have a combination of pro-cyclical and counter-cyclical products. This type of product is suitable for those willing to take moderate risks, he said.
Desai's top picks: Edelweiss Balanced Advantage Fund and ICICI Prudential Fund.
Gang's top picks: HDFC Balanced Advantage and ICICI Pru Balanced Advantage Fund.
Watch the full discussion below
Query 1: I have SIPs in seven funds and can additionally divide and invest Rs 12,000 in them. Can I achieve my target (retirement corpus) through these funds, or do I need to make changes?
Name: Amit Sharma | Age: 41 years
Mohit Gang: Consider raising your target for retirement savings. By increasing your SIPs, you can achieve even better results. You may also want to raise the risk level in your investment portfolio and consider adding another mid-cap and small-cap fund.
You can choose from Edelweiss Midcap Fund, ICICI Pru Small Cap Fund for new SIPs. You can also go for a passive allocation with Momentum 30 Index Fund and ICICI Nifty 50 Index fund.
Rushabh Desai: Avoid multiple funds of the same AMC and diversify across different AMCs and styles.
I would suggest you stop the SIPs in Axis Bluechip, HDFC Retirement, HDFC Top 100, ICICI Pru Bluechip and ICICI Pru ELSS Funds.
Query 2: I want to invest Rs 2,000 per month in mutual funds for the next 1.5 years. Can you suggest a few funds?
Name: Shyam | Age: 20 years
Rushabh Desai: 1.5 years is a very short time horizon for SIPs in equity. (You) can go for an SIP in debt mutual funds. Look at equity if you have a six or seven–year time horizon.
Recommendation: Motilal Oswal Nifty 500 Index Fund.
Mohit Gang: Not an ideal time for equity. You need to have at least a five-year time horizon. It is difficult to make Rs 1.5 lakh corpus in this short time. You need to increase the time frame.
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