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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