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Will these mutual funds help my wife to create Rs 1.5 crore?

If you have any mutual fund queries, message on ET Mutual Funds on Facebook. We will get it answered by our panel of experts.

ET Online|
Dec 02, 2019, 04.24 PM IST
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I am writing about my wife's portfolio. She has a moderate-high risk profile. Here are the mutual funds she has been investing:
Mirae Asset Tax Saver Fund: Rs 5,000 per month (Started last financial year)
Axis Bluechip Fund: Rs 1,000 per month (Started this financial year)
Mirae Asset Emerging Bluechip Fund: Rs 1,000 pm (Started in Nov'19)
Motilal Oswal Large and Midcap Fund: Rs 500 pm (Started in Nov'19)
SBI Small Cap Fund: Rs 500 per month (Started Jul'19)

This is for her retirement fund. We have a target of Rs 1.5 crore in the next 28 years. Also, we would like to start investing in the below fund Motilal Oswal Nasdaq 100 FOF: Rs 500 per month.

Please review whether the portfolio is on track to meet the target.
--Nanjunda Ambekar

Assuming an annual return of 12%, you wife needs to invest Rs 5,500 every month to create Rs 1.5 crore at the end of 28 years. However, a word of caution: you have to include annual inflation to reach a realistic target. With the impact of annual inflation, your targets could become very large after a long period. For example, a goal of Rs 1 lakh today would be worth around Rs 5.11 lakh, after accounting for annual inflation of 6%, after 28 years. If you include the capital gains tax on equity mutual funds, it will climb even further. For more, view:

Why Rs 1 crore will not ensure a rich retired life?

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A big round figure is no guarantee

2 May, 2019
Rs 1 crore, Rs 2 crore, or Rs 5 crore will not guarantee a cushy retired life to you. Why? The basic idea behind creating a target corpus is to ensure that returns or interest from it would be enough to take care of your expenses after retirement. Have you done the math to find out whether the big round figure would do that?

You need to sharply define your risk profile. We are a bit apprehensive about such conservative to moderate, moderate to high definitions. Try to take an online quiz to define your risk profile and then realign your portfolio with it.
(If you have any mutual fund queries, message us on ET Mutual Funds on Facebook. We will get it answered by our panel of experts.)

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