How can I generate wealth for kid

I would like to start an investment/create a good corpus for my 1 month old baby. Can you please help with the appropriate MF / Child gift fund for long term wealth creation. At present, I am thinking of contributing 1.5 to 3 K specifically for this. Apart form this I already have SIPS in different schemes amounting to about 25K. Request you to please suggest appropriate method by which I can generate wealth for my baby?

May 18, 2017 by MGD, Mumbai  |   Financial Planning

Heartening to note that you are targeting wealth creation for your 1 month old baby. You are planning about the right goal at the right time - Congratulations!

Please note that you should not consider any child mutual fund plan or insurance plan for creating wealth for your child. Child mutual funds are basically either hybrid debt funds or balanced funds. Why invest in hybrid debt funds or balanced funds when your investment horizon is very long. Moreover, being a mutual fund investor you already know the risk return ratios of different category of mutual funds. Our suggestion is that you should invest in diversified equity funds in your name and keep aside this investment for meeting the various life goals of your kid. With regards to protecting baby's financial future, in case something untoward happen to parent/s, you must take enough life cover through term life insurance plans

You can choose a diversified equity fund from this list - Birla Sun Life Equity Fund, ICICI Prudential Value Discovery Fund and SBI Magnum Multi-Cap Fund

Wishing you and your child a great financially rich life. Thanks for writing to Advisorkhoj.