Top Mutual Funds for a 10-Year Investment of 10 Lakhs

When considering a 10-year investment strategy with a corpus of 10 lakhs (approximately $14,000), it's crucial to understand the potential growth and risk involved. In this article, we will explore the best mutual funds to consider for such a duration. We will also discuss the recommended investment strategy over this timeframe.

Initial Investment Strategy: Liquid Fund

Before diving into equity mutual funds, it's advisable to park your initial amount in a liquid fund. Liquid funds are a type of debt mutual fund that offers better returns than a savings account while maintaining liquidity. This strategy ensures that you have some flexibility as you adjust your portfolio over the next 12 to 18 months.

Transition via Systematic Transfer Plan (STP)

Over the next 12 to 18 months, you should systematically transfer a portion of the corpus from the liquid fund to different equity mutual fund categories. By doing so, you can avoid the impact of market volatility and maximize returns over the long term. Here’s the suggested allocation:

30% in large-cap funds 30% in multi-cap/diversified equity funds 20% in medium and small-cap funds 20% in hybrid equity funds

Recommended Hybrid Fund: ICICI Multi Asset Fund

One of the best choices for a long-term investment is the ICICI Multi Asset Fund. Formerly known as the Dynamic Asset Fund, it offers a balanced approach with both equity and debt components. This hybrid fund is well-suited for investors seeking a stable, long-term return with moderate risk. If you need more specific guidance or have any questions, feel free to message me.

Safe and Strategic Withdrawal Plan (SWP)

For a more conservative yet strategic approach, you can consider via Systematic Withdrawal Plan (SWP) an existing income stream. By withdrawing around 10,000 rupees per month, you can reinvest the funds across four diversified equity mutual funds:

Axe Long Term Equity Fund Mirae Asset Emerging Bluechip Fund Invesco India Multicap Fund Reliance Small Cap Fund

Optimized Portfolio for Diversification

A combination of large-cap and multi-cap funds provides a balanced approach. However, spreading the investment across different Asset Management Companies (AMCs) offers further diversification. Here are a few good mutual funds that come to mind:

ABSL Equity Fund Axius Focussed 25 Fund Axius Long Term Equity Fund Axius Midcap Fund

Advisory and Financial Planning

When making long-term investments, it's essential to understand the market dynamics and tailor your strategy accordingly. Until the market corrects, it might be wise to avoid lump-sum investments, as the current market conditions can be uncertain. Consulting with a trusted financial planner can provide you with personalized advice and a tailored investment plan that aligns with your goals.

Conclusion

In conclusion, a well-diversified investment strategy that includes strategic transitioning from a liquid fund to equity funds over a 10-year period can capitalize on compound growth and diversification. Whether you opt for a hybrid fund or an optimized portfolio, it is essential to stay informed and flexible. Contact a financial advisor to ensure you have the best possible guidance for your investment journey.

If you need more details or have any further questions, feel free to reach out.