I am 49years old. I have a lump sum of Rs.8 lakhs which I wish to invest through SIP in my son’s name. He is 22years old and still a student. We have enough means to fund his studies and other expenses. He may not need this money for the next 20years. I am planning to continue the SIP even after the corpus of Rs.8 lakhs is over.
Funds for a monthly SIP that I have picked.
All funds in direct growth option……
Axis long term equity fund (ELSS) Rs. 5,000
L&t emerging biz fund (Small Cap) Rs.12,000
SBI small and mid cap fund (Small Cap)Rs.12,000
Principal Emerging Bluechip Fund (MID Cap) 10,000
MO most focussed multi-cap 35 (multi-cap) Rs.10,000
Is the choice of funds OK? Else please suggest alternate funds.
Thank you in advance.
First drawback, where is your debt portion? I am uncomfortable with the idea of investing 100% into equity, whether the goal is 10 years or 100 years. In your case, I suggest around 30:70 in debt and equity. For debt, you can use the short term gilt funds or ultra short-term debt funds. Regarding equity, 3 funds are enough like one large cap, one mid cap and one small cap in ratio of 60:30:10.
Also, if you did proper asset allocation and goal is long term, then why not invest in one go? If you still uncomfortable with one time investment, then stagger it for around 6-8 months and invest it. Why SIP?