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New Indian Express
3 hours ago
- Business
- New Indian Express
How to create retirement corpus through mutual funds
Creating a retirement corpus of Rs 5 crore or even Rs 10 crore may seem like a daunting task for a middle-class salaried individual, but a systematic investment approach can make the journey more manageable. Starting early and maintaining consistent investment discipline are key factors in achieving this long-term financial goal. Mutual Funds: A simple and effective tool One can create such a corpus through mutual funds—a no-frills investment option that provides exposure to equity, debt, gold, and silver. A well-planned investment strategy involving long-term mutual funds, index funds, and a diversified portfolio can help build the required corpus over time. Step-Up Investment Strategy: A smarter way to invest A step-up investment strategy—gradually increasing the monthly SIP amount as income grows—can ease the pressure of retirement planning. Starting with a modest contribution and increasing it by a fixed percentage every year can deliver substantial long-term results. For instance, someone who begins investing at the age of 35 has a 25-year horizon to accumulate the target amount. Assuming an annual return of 12%, one can start with a monthly SIP of Rs 12,000 (with a 10% annual step-up) to reach Rs 5 crore in 25 years. A 10% step-up SIP means increasing the monthly SIP amount by 10% every year. If the investment horizon is longer—say 30 years—one can start with a SIP of just Rs 6,200 (with a 10% step-up) to reach a retirement corpus of Rs 5 crore at an average 12% return. Delaying retirement planning often leads to a heavier investment burden later in life, as catching up would require more aggressive contributions. Portfolio Allocation: Balancing Growth and Stability A suggested allocation mix could include large-cap, mid-cap, and small-cap equity mutual funds to maintain a balanced, growth-oriented portfolio. "Equity mutual funds—especially Flexi-cap funds—should be the foundation of long-term wealth creation," says Ajay Kumar Yadav, Group CEO and CIO at Wise Finserv (Private Wealth). "These funds empower fund managers to dynamically allocate across large-cap, mid-cap, and small-cap stocks based on valuations and macro fundamentals," he adds. Investors may also consider balanced or multi-cap funds, which offer automatic rebalancing and diversification. Balanced funds typically follow a 70:30 equity-to-debt allocation, offering stability along with growth potential. Multi-cap funds, while more volatile, can generate higher returns in a rising market. A slightly more aggressive portfolio might consist of two multi-cap funds—one with a mid-cap focus and another with a small-cap focus—offering higher returns over the long term. Even those who begin investing later can still aim for the Rs 5 crore mark by increasing monthly contributions. For example, a 15-year plan with a monthly investment of Rs 45,000, along with a 10% step-up option and 15% average return, can take you closer to a Rs 5 crore corpus. For those planning over 30 to 35 years, a diversified portfolio could include around 40% in index funds mirroring the Nifty 50 and Sensex, with the remaining 60% equally split between mid-cap and small-cap funds. "As you approach retirement, gradually shifting towards Hybrid, Multi-Asset Allocation, and Debt Funds is prudent to reduce volatility and preserve capital," Yadav advises.
Bloomberg
3 days ago
- Business
- Bloomberg
Blackstone's Solotar on Japan Private Wealth
Joan Solotar, Global Head of Private Wealth at Blackstone, discusses the company's strategy in Japan as she sets sights on an ambitious $1 trillion goal at the business. She speaks with Haidi Stroud-Watts and Paul Allen on "Bloomberg: The Asia Trade". (Source: Bloomberg)
CTV News
3 days ago
- Business
- CTV News
U.S. appeals court reinstates Trump's tariffs. Live updates here.
Carol Schleif, chief market strategist at BMO Private Wealth, shares her outlook of the market and analysis on the setback Trump tariffs got in a U.S. court.
