How to build a diversified corpus with mutual funds?
—Name withheld on request With a moderate risk profile and a 7 plus year investment horizon, we suggest the following asset allocation: 60-80% in equity mutual funds, 10-20% in fixed income through mutual funds, bonds, and fixed deposits, and 10-15% in gold through sovereign gold bonds. Regarding equity mutual funds, we recommend emphasizing large-cap funds and hybrid funds, with a portion allocated to mid-cap funds.
Based on this, here are our suggested funds for investment: ICICI Prudential Balanced Advantage Fund HDFC Balanced Advantage Fund Parag Parikh Flexicap Fund Kotak Emerging Equity Fund ICICI Prudential Nifty 50 Index Fund Mirae Asset Large and Midcap Fund In the category of large-cap funds, we prefer index funds due to the consistent performance when compared to actively managed funds. Additionally, we strongly advise maintaining an emergency corpus equivalent to six months of your salary or income.
This fund can be held in liquid or ultra short mutual funds. Also, if not already in place, consider obtaining medical and life insurance to ensure financial protection for your family in case of unforeseen events.
These suggestions are based on the information provided and certain assumptions. For personalized advice, we recommend consulting a financial adviser.
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