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Mutual funds to create Rs 2 crore in 12 years

for retirement
I am a 34-year-old woman with a five-year-old son. I wish to create a corpus of Rs 2 crore in the next 12 years. I am willing to invest Rs 25,000 per month. I want to ask whether this is a realistic goal with the kind of investment capacity that I have? If yes, can you please advise me on a few mutual funds which can help me to achieve my goal.
--Ankita Gupta

Subir Jha, Founder, BuckSpeak, responds:


While equity mutual fund schemes can be apt tools to achieve your long-term financial goals, your target corpus of Rs 2 crore is way too ambitious. Your investment needs to generate around 23.5% annual compounded return to reach the corpus of Rs 2 crore in 12 years. I expect equity funds to deliver 12-13% per annum (not guaranteed) over the long term (with all the usual disclaimers of risk). This way your corpus can grow to Rs 80-85 lakh. So, you either need to scale down your expectations or increase your contribution.

When it comes to fund selection, you should consider seeking advice from a professional financial advisor who would help you construct a portfolio based on your risk appetite . You could choose to invest in a mix of children’s fund, a multi cap and a mid cap fund.
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