Match Your Needs to Mutual Fund

25 Aug 2022

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  • Mutual funds help meet a broad range of needs, right from wealth preservation to wealth accumulation to tax-saving.
  • It is up to the investor to list down all that he wants to achieve with his money and pick mutual funds that are best positioned to help him meet his goals

Let’s see how this works in the real world with the three broad objectives that most investors hold dear:

  • Accumulating wealth for retirement planning / child's education - think Equity Funds or Hybrid Funds
  • Preserving wealth for contingencies – Debt & Debt Hybrid Funds
  • Saving tax – tax-saving Funds

Let’s take Virat who has these three objectives on his bucket list. He has Rs 15,000 that he wants to earmark towards the three goals monthly. For the sake of simplicity, he divides the sum equally in three parts towards each of these goals via a monthly SIP of Rs 5,000. This is how his money is likely to grow over time

Period Monthly SIP (Rs) Mutual Fund Category CAGR Market Value*
10 Years 5,000 Debt Hybrid Fund 8% 9,20,828
10 Years 5,000 Equity Hybrid Fund 10% 10,32,760
10 Years 5,000 Equity Fund 12% 11,61,695

*Value of Investment ( In Rs Lakhs)

Rate of Return is assumed as per historical performance of asset classes

Mutual Fund Investments are subject to market risks, read all scheme related documents carefully. The information provided is generic in nature and is for informational purpose only. Please consult your financial advisor before taking any decision

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    The contents of this article/infographic/picture/video are meant solely for information purposes and do not necessarily reflect the views of Bank of Baroda. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Bank of Baroda and/ or its Affiliates and its subsidiaries make no representation as to the accuracy; completeness or reliability of any information contained herein or otherwise provided and hereby disclaim any liability with regard to the same. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject Bank of Baroda or its affiliates to any licensing or registration requirements. Bank of Baroda shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.

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