1. Advisorkhoj
  2. Post Your Queries
  3. Mutual Fund
  4. Whether to invest in SIP or lump sum

Whether to invest in SIP or lump sum

My age is 49 and I have a cash of Rs 10 lakhs, which I want to invest in MF for 5 - 7 years. I think 65 (equity) & 35 (debt) asset allocation will be better for me. In which MF, should I invest? Looking at market all time high, whether to invest lump sum or by SIP/STP? Please guide me?

Jun 12, 2017 by Anil Madhav Parate, Nashik  |   Mutual Fund

Since you do not know sufficient details of your total assets / liabilities and your risk appetite, we will not be able to comment on the asset allocation of your planned investment.

For the equity portion of investment, diversified equity (multicap) funds can be good investment options. Many investments experts are worried of midcap valuation premium versus large cap and are accordingly, recommending large cap funds. On the other hand, midcap funds have been outperforming large cap funds for 3 years in different market conditions and a few experts think that, there is a paradigm shift at how investors are looking at midcap stocks; these experts think that, midcap will continue to outperform. It is difficult to say at this stage, which view is more correct and therefore, diversified equity funds are a good choice, because they invest in both large cap and midcap stocks. For top most consistent diversified equity funds, please visit our tool, Top Consistent Diversified Equity Mutual Fund Performers. You can select one or two diversified equity funds from this tool.

For the debt portion of your investment, income funds are a good choice, because you have a long investment horizon and income funds perform better over an investment horizon of 3 years or so. Further, both the Government and the RBI are in favour of lower interest rates to accelerate economic growth in the country. Earlier this week, the RBI has indicated that, inflation will be lower in the coming months; hence the possibility of lower interest rates and higher income fund returns. For top most consistent income funds, please visit our tool, Top Consistent Income Fund Performers. You can select one or two income funds from this tool.

Alternatively, since you want a 65% equity / 35% debt asset allocation, you can invest in balanced funds, instead of investing in diversified equity and income funds. Balanced funds have about 65% equity and 35% debt. However, the asset allocation mix can change depending on market conditions. Sometimes, fund managers may increase the asset allocation in equities, if they expect higher equity returns in the medium term. For top most consistent income funds, please visit our tool, Top Consistent Balanced Mutual Fund Performers.

Thanks for writing to us.

comments powered by Disqus
Search
You haven't found the answer for your queries? Do post your queries to us.
POST A QUERY

© 2016 Advisorkhoj - A Gamechanger Business Services (I) Pvt. Ltd. Brand - All Rights Reserved

Feedback