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Mutual fund portfolio for long-term wealth creation


I am 26 years old. I have no liabilities. Already built up an emergency corpus, have life insurance and health insurance plan. I am currently investing Rs 40,000 per month via monthly SIP route in mutual funds below:

Tata Index Fund: Rs 13,000
PGIM India Flexi Cap Fund: Rs 5,000
Mirae Asset Large Cap Fund: Rs 4,000
Axis Mid Cap Fund: Rs 4,000
Axis Small Cap Fund: Rs 3,000
Axis Bluechip Fund: Rs 3,000
Mirae Asset Tax Saver Fund: Rs 2,500
Axis Long Term Equity Fund: Rs 2,500
Canara Robeco Emerging Equities Fund: Rs 3,000

I am not investing for any specific financial goal. I seek to invest for long-term wealth creation. I also invest Rs 1.5 lakh per annum in PPF account (opened when I was 18 years). I want to invest additional Rs 10,000 per month.

–Vaibhav Gupta

One crucial factor is missing in your message: risk profile. We always ask investors to choose mutual funds based on their goals, investment horizon, and risk profile. For example, if you are investing for a short-term goal, you should invest in debt mutual funds. If you are investing for a long-term goal, you should invest in an equity mutual fund. Further, you should choose a category based on your risk profile. If you are a conservative equity investor, you may invest in large cap schemes. If you have a moderate risk profile, you may invest in flexi cap schemes. If you have a higher risk appetite, you may invest in mid cap, small cap, sector schemes.But you should remember that these schemes can be extremely risky and volatile. So you should invest in risky options only if you can stomach volatility and short-term losses.

You don’t need more than four schemes, including tax saving schemes, in your portfolio. Too many schemes often result in over-diversification and drags down the overall returns from the portfolio. Try to have focused portfolio that matches your goals and risk profile to maximise returns. If you are not sure about basics, seek the help of mutual fund advisor. You have age on your side. Try to create wealth without exposing yourself to unnecessary risks.



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