Will I be able to generate 20 per cent CAGR?

I am 21 years old. I am investing in mutual funds for the first time. I have an investment horizon of more than seven years and a moderate-to-high risk appetite. My aim is to generate close to 20 per cent CAGR over the longer term. I am investing Rs 8,000 per month equally across four different mutual fund schemes.

Kotak Standard Multicap Fund
L&T Midcap Fund
Motilal Oswal Multicap 35 Fund
Aditya Birla Sun Life Small Cap Fund

All mutual fund schemes are under the direct, growth option. Please review my portfolio.

-- Darshan Kataria

Deepali Sen, founder, Srujan Financial Advisors, responds:

You have selected some good mutual fund schemes. However, you need to add largecap schemes to your mutual fund portfolio. You could invest 30-40 per cent in largecap schemes like Aditya Birla Sun Life Frontline Equity Fund, SBI Bluechip Fund, and ICICI Prudential Bluechip Fund.

Investing around 25 per cent of your corpus in smallcap schemes is highly risky. You should limit your exposure to the smallcap segment at 10-15 per cent. Also, you should invest in midcap and smallcap schemes with an investment horizon of 10 years. You should avoid investing in more than two to three mutual fund schemes from the same category.


I hope you are planning to invest in ultra short term schemes for your emergency needs and in debt schemes (corporate bond, medium duration or banking and PSU debt fund) for your medium-term goals.