I want to accumulate Rs 3 crore in next 10 years for my early retirement. Am I on the right track?

I am 40 and have been investing Rs 20,000 in six equity funds for the past five years. The schemes are ICICI Prudential Bluechip, ICICI Value Discovery, HDFC Midcap Opportunities, HDFC Hybrid Equity, ABSL Frontline Equity and ABSL Equity Fund. The portfolio is worth around Rs 1.2 crore right now. Of late, ICICI Value Discovery, HDFC Midcap and ABSL Frontline Equity Fund have slipped to 3-star ratings. Should I discontinue SIPs in these funds and start SIPs in Mirae Asset Large Cap and Mirae Asset Emerging Bluechip Fund? I will continue SIPs only for the next two years and then stop as I plan to start my own CA practice. I will keep this corpus for the next 10 years for my early planned retirement at 52. I want to accumulate Rs 3 crore in the next 10 years.

Vidya Bala, Co-Founder, PrimeInvestor.in replies: "It is true that some of your funds are underperforming. But funds like ICICI Pru Value Discovery’s performance is due to the ‘value’ theme not taking off for long. Stop SIPs in all the funds except HDFC Midcap Opportunities. Hold them until such time you are comfortable switching them incurring lower taxes. Start SIPs in UTI Nifty 50, Motilal Oswal Nifty 500 and continue in HDFC Midcap Opportunities. Mirae Asset Emerging Bluechip is fine but will have restriction on SIP amount. Add debt component through a fund like ABSL Floating Rate Fund. Assess performance of the mid-cap fund next year. Else move to a mid-cap index fund."

I am 25. I started SIPs of Rs 2,500 each in Kotak Standard Multi-Cap Fund and Franklin Templeton Mutual Fund two years ago. I want to continue the SIPs till I retire at the age of 60. However, I have to buy a house for which I might have to liquidate all my investments. I intend restarting the SIPs after that and continuing till retirement. Will this help accumulate a healthy corpus?


Raj Khosla, Founder and Managing Director, MyMoneyMantra.com replies: "You have taken the right decision by starting SIPs at an early age. SIPs offer extreme liquidity —you can easily withdraw funds as per your requirements, and there is minimal exit load. Since you enjoy the luxury of a long-term perspective, you should ensure investment consistency. Do not scale down existing investments and do hike SIP contributions on a regular basis, depending upon your income and life goals. Review and rebalance your portfolio once in three years. Also, opt for health cover and term plan for protection against unforeseen contingencies."