I have systematic investment plans (SIPs) in Birla Sunlife Equity fund (Rs5,000; started in 2016) and Franklin India Prima Plus (Rs10,000; started in 2017). My goals are child’s higher education (10 years from now) and my retirement—which is at least 23 years away. I have some lump sum investments as well. I want to increase the SIP amount by Rs5,000 a month. Should I increase in the same schemes, or choose another one?
—Rashni Paul
You are presently investing systematically in two funds for a total of Rs15,000 a month. Both these funds are large-cap-oriented diversified funds, meaning they invest predominantly in the largest companies in the market, while taking some exposure (around 30-40%) to medium-sized companies. You are investing for two goals—education for your child in 10 years and your own retirement a good while after that. I would recommend that you invest for these goals separately and keep the fund allocations distinct. This would help manage these investments in a purpose-driven way. If you set aside your current investment as being for your child’s education, in another 10 years the corpus would grow to a nice Rs35 lakh (assuming a 12% annual return). This should hopefully suffice for the goal. Now, you can allocate the extra Rs5,000, which you are bringing in, for your own retirement. If you plan to add more money to your SIPs in future, you can simply add them to your retirement kitty.
