I am 25 years old. I am an IT professional and I earn around Rs 56,000 per month. I have already started SIPs in two mutual fund schemes and one ELSS fund. I started them this year.
1.India Value Fund (G): Rs 4,500 per month
2.ICICI Prudential Value Discovery Fund: Rs 3,500 per month
3.DSP Tax Saver Fund: Rs 4,000 per month
Also I have a surplus corpus of Rs 4 lakh, which I would like to invest for a short term growth (5-year horizon).
1. I would like to buy a home in Pune, five years down the line (Rs 60-70 lakh) and would like to pay around 60 per cent as down payment.
2. Also, I am planning to start investing in Public Provident Fund, starting with Rs 30,000 per year with an increment of 10 per cent every year. Will it be sufficient to have a good corpus post my retirement (Apart from NPS + PF saving, which I generally do)
You have selected good schemes to invest. You may continue with your investments.
You can invest Rs 4 lakh in a good equity-oriented hybrid scheme like HDFC Balanced Fund with an investment horizon of five years. Stagger your investments over a few months.
You have unrealistic goals. You are currently investing Rs 12,000 per month. It may not be possible to make Rs 30-35 lakh for your down payment within five years. If your investments fetch 12 per cent annual returns, it would be worth only around Rs 9.9 lakh at the end of five years. If you invest Rs 4 lakh in an equity-oriented hybrid scheme and if it offers 12 per cent per annum, you would have another Rs 7.04 lakh at the end of five years. You should invest more money or postpone your goal.
Government-backed safe investments like PPF would give you only modest returns. That means your retirement corpus would also be modest if you are going to use only PPF to build the corpus. You may consider investing a part of the money in equity mutual funds. Equity mutual funds have the potential to offer superior returns than other asset classes over a long period. That is why they are considered ideal to achieve long term goals like retirement.
Here is our recommended SIP equity mutual fund portfolios. You can choose a portfolio based on your risk profile and SIP amount.