Building a substantial corpus of 6 crores via mutual funds is an ambitious yet attainable financial goal that necessitates strategic planning, consistent investment, and careful fund selection. Explore effective strategies and diverse mutual fund options to help you achieve this objective within a 10-15-year timeframe.
- Evaluating investment amount and time horizon
Let’s begin by considering an individual’s investment scenario. A person desires to amass a corpus of 5-6 crore over 10-15 years with a monthly investment of 40,000 to 50,000 INR. While these investments might appear significant, it’s essential to recognize that achieving such a substantial corpus requires a higher monthly investment.
Based on financial experts’ advice, to accumulate around 6 crores over 15 years, an investor would need to almost double the current monthly investment amount, assuming an annualized return of 12% from equity or hybrid aggressive funds. Thus, it becomes crucial to consider increasing the monthly Systematic Investment Plan (SIP) contributions to meet the desired financial goal.
- Choosing funds for balanced risk exposure
For individuals with a moderate risk appetite, opting for large cap funds or hybrid aggressive funds could be a prudent choice. These fund categories offer a balanced trade-off between risk and potential returns, making them suitable for long-term wealth creation.
These funds invest in established and stable companies, providing stability and the potential for steady growth. Several consistent-performing large cap funds exist in the market.
Hybrid aggressive funds
This category involves a mix of equities and debt instruments, offering a diversified approach to risk management and wealth creation.
- Exploring tax-efficient investment options
Additionally, equity-linked savings schemes (ELSS) can provide tax benefits along with growth opportunities. Some ELSS fund options include funds that focus on long-term capital appreciation and consistent performance.
- A different approach
For aggressive investors, a diversified portfolio could consist of funds that span various categories and risk profiles, aligning with their investment style.
It’s important to acknowledge that achieving a consistent 12% annual return on investments is not guaranteed. As a result, it’s advisable to remain adaptable and adjust strategies based on market dynamics and fund performance.
- Key factors for successful wealth accumulation
Accumulating a significant corpus through mutual funds involves several key factors:
Diversifying investments across different asset classes, such as equity, debt, and gold, aids in managing risk and optimizing returns.
Consider inflation and taxes
Incorporate the impact of inflation and taxes while setting investment goals to ensure the target corpus retains its value over time.
Regular portfolio review
Periodically assessing and rebalancing the portfolio ensures it remains aligned with financial objectives.
Increase SIP amount
Gradually increasing SIP contributions as income grows can expedite wealth accumulation.
Constructing a corpus of 6 crores through mutual fund investment plans is feasible with a strategic approach, consistent investment, and prudent fund selection. The strategies mentioned above are applicable to individuals seeking to attain their financial goals. While past performance provides insights, it’s important to consult financial advisors and periodically reassess the investment strategy to ensure progress toward the desired financial target.