mutual funds: How much will these mutual funds return in 18 years?

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mutual funds: How much will these mutual funds return in 18 years?

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I am an aggressive investor. I am investing Rs 70,000 per month in mutual funds. I am investing in the following mutual fund schemes:

Tata Midcap Growth Fund
Franklin India High Growth Companies Fund
Franklin India Prima Fund
Reliance Banking Fund
Reliance Small Cap Fund
Aditya Birla Sun Life Banking & Financial Services Fund
Motilal Oswal Most Focused Multicap 35 Fund (Now called Motilal Oswal Multicap 35 Fund)

I am investing Rs 10,000 in each of these schemes. All these mutual fund schemes are under the direct plan, and I have chosen the growth option. I am 42 years old. How much money would I make by the time I am 60 years old – that is in 18 years?

— Vivek Thapar

An aggressive investor is supposed to invest mostly in midcap and smalllcap schemes. They can also invest in multicap or largecap schemes to reduce risk by diversifying their portfolio.

You are currently investing in seven schemes. You are investing in two midcap schemes, one smallcap scheme, one multicap scheme, one focused multicap scheme, and two sector schemes. Here are a few quick observations:

Two schemes are underperforming in both one- and three-year periods. Tata Midcap Growth Fund is underperforming its benchmark and category in both one- and three-year periods. Franklin India Focused Equity Fund (called High Growth Companies Fund before re-categorisation) is a focused multicap scheme. The scheme is underperforming its benchmark and category in one- and three-year horizons. Keep a close watch on these schemes.

The other three schemes are good performers. Franklin India Prima Fund is a good midcap scheme. Motilal Oswal Multicap 35 Fund is a good multicap scheme. Reliance Small Cap Fund is a good smallcap scheme.

It is not easy to predict the returns from equity mutual funds. The performance depends on the performance of the stock market. And it is not possible to predict the future course of the market. However, if you continue investing the same amount every month for the next 18 years, and assuming an average CAGR of 12 per cent, you may be able to create a corpus of around Rs 5.36 core in 18 years.

It is always better to increase your investment in line with every increase in your income to realise your financial goals without any difficulty.

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