Should I select different funds for different financial goals

Thanks for the kind words which we truly appreciate.

Your idea to plan for different life goals by creating separate investment baskets is an ideal approach.

You have also selected good funds for your short term/ medium and long term goals. Your short term goal is of 5 years and you want to create a corpus of Rs 40 Lakhs by investing Rs 30,000 through monthly SIPs. This goal looks unachievable as you are investing Rs 20,000 in debt/ gilt funds and only Rs 10,000 in equity funds. This portfolio can get you maximum 11% annual return and after 5 years you can expect a corpus of Rs 24 Lakhs only against your goal of Rs 40 Lakhs. Therefore, there will be a short fall of Rs 16 Lakhs.

We feel that you should increase your equity allocation fro this goal and also feel that instead of investing separately in debt you should invest in balanced funds as it has minimum 35% debt in its portfolio but the taxation is of equity. If you invest in balanced funds and increase your equity allocation you may expect an annual return of 13-14% and expect a corpus of around Rs 26 Lakhs. However, it will still be short of Rs 14 Lakhs!

To achieve the above short term goal of Rs 40 Lakhs, you should increase your monthly SIP to Rs 45,000 from current levels of Rs 30,000!

Medium/ Long term goals - For these you plan to invest Rs 50,000 per month and the selected funds are equity and balanced funds. Assuming 14% annual return, you can expect a corpus of Rs 1.57 Crores after 11 years. Therefore, you can meet your business capital goal of Rs 50 Lakhs and keep the rest for meeting other long term goals while continuing the Rs 50,000 monthly SIP.

You need to review the above investments regularly and once the short term goal and medium term goals are achieved, you will have to plan for your long term goals, that is child's higher education and marriage and your retirement.

Wishing you all the best! Thanks for writing to Advisorkhoj!!