Ask ET Mutual Funds: I want to invest Rs 25 lakh. Which schemes should I choose?

I am 34 years old. I will be getting Rs 25 lakh from asset sale and I want to invest this amount in mutual funds or debt instrument like PPF for a long term. Please strategise my investment.

-- Dibassish Sahoo

Harpreet Singh, Certified Financial Planner, responds:


You have given incomplete information. While you want to invest for a longer term, you have not specified what is your risk appetite and do you want to get into debt funds or equity funds. If you have a long term (seven years plus) view and are not bothered by short term market fluctuations, you can invest in two to three dynamic bond funds and start a systematic transfer plan in a mix of largecap and midcap equity funds with, say, 60:40 ratio. If you want to be more aggressive, you may increase the allocation to mid-cap funds and vice-versa. You can transfer in a manner that you exhaust your debt portfolio in three to four years and get completely invested in equity. On the conservative side, another option is to let 15-20 per cent of your original corpus stay in debt that can come handy if you need funds when it may not be advisable to exit equity. Since you must periodically review your portfolio and asset allocation, a detailed plan can be formed with the help of a qualified financial planner.


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