Invest for Success: Match Your Goals with the Right Mutual Funds
29 Feb 2024
Match Your Goals to Mutual Funds
Embarking on a journey toward financial success requires not just a compass but a well-crafted financial map that aligns with your unique aspirations. Mutual funds, known for their diversification and professional management, cater to a diverse set of financial goals, spanning from safeguarding wealth to accumulating assets and facilitating tax savings.
Investors must outline their financial goals and select mutual funds that are well-suited to assist them in achieving those objectives.
Let’s see how this works in the real world with the three broad goals that most investors aspire for:
- Retirement planning / Child's Education - Equity Funds or Hybrid Funds
- Emergency Corpus – Debt & Debt Hybrid Funds
Consider Rahul, who has set three distinct goals on his bucket list. With a monthly allocation of Rs 15,000 earmarked for these aspirations, he opts for a straightforward approach. For simplicity's sake, he divides this sum equally, allocating Rs 5,000 through a monthly SIP towards each of these goals. Let's explore how his wealth is poised to evolve over time with this strategy.
| 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.
Past performance is not indicative of future performance. 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.
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.
