Can I invest in these schemes for 25 years?

I am a 32-year-old private sector employee. I am planning to invest Rs 2,000 every month (total Rs 10,000) in five mutual funds. My investment horizon is 25 years. I have chosen the following schemes: SBI Bluechip Fund, Mirae Asset Emerging Bluechip Fund, ICICI Prudential Value Discovery Fund, Axis Long Term Equity Fund, and Reliance Smallcap Fund. Please suggest if these are the best schemes for 25-year investment. Are any alternatives?
--Rajesh Kumar Jena

You have not mentioned your goals or risk profile. So, it is not possible to say exactly whether these schemes are ideal for you. However, you have chosen schemes with good performance record. You have chosen a tax saving scheme, largecap, midcap, smallcap and mutlicap scheme:

SBI Bluechip Fund (Largecap)
Mirae Asset Emerging Bluechip Fund (Midcap)
ICICI Prudential Value Discovery Fund (Multicap)
Axis Long Term Equity Fund (ELSS - Multicap)
Reliance Smallcap Fund (Smallcap)

It is not clear why you have chosen these schemes. Are they in line with your risk appetite? For example, you have chosen a midcap and smallcap schemes that are risky investments with a potential to offer higher returns. However, if you cannot stomach risk, you would not be happy with the volatility in them. Take an online quiz and find out your risk profile to ensure that the schemes match your risk profile. It is not necessary to spread your investments across every available investment options. The basic idea behind diversification is to spread out your investments across the best investment options for you.

Since you are investing with a 25-year horizon, keep a track of your investments. Review the performance of every scheme once or twice a year. Compare their performance with their respective benchmark, category and peers. If any scheme is lagging for a year, try to find out the reason behind the underperformance. Give it another year at the most and if it doesn't show signs of improvement, sell your investments in it and shift the money to a better performing schemes in the same category.

Lastly, do not add more schemes to your mutual fund portfolio as it will be difficult for you to monitor them regularly.



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