I am 29 and am currently investing ₹12,000 every month in the following funds: ₹2,500 in HDFC Prudence; ₹2,000 each in DSPBR Top 100, HDFC Mid-cap Opportunities, BSL Frontline Equity; ₹1,500 in HDFC Equity; ₹1,000 in DSPBR Small and Midcap and ₹500 each in UTI Dividend Yield and Franklin Flexicap.

Each of these investments was started at different points in the last six years. Please let me know which funds to continue and which to exit.

I can stay invested for 25 to 30 years and can increase the investment amount as the years pass by. I am saving for my retirement at 60.

Sebin 

Investing ₹12,000 a month for the next 31 years will fetch a sum of ₹4.23 crore when you turn 60, assuming your investments earn a compounded annual return of 12 per cent.

Your investments in the past years, along with additional ones that you may do as your surplus increases, will add to this corpus of ₹4.23 crore.

Considering that you are young and have a long-term investment horizon, you have rightly chosen equities, which have potential to beat debt returns over the long term. At the same time, to balance out the risks, do diversify into debt investments such as bank/company fixed deposits, PPF, etc.

Coming to your funds, for ₹12,000, you have spread yourself a bit thin by investing small amounts in eight different funds.

You can rejig as follows: Continue investing in Birla Sun Life Frontline Equity and put in ₹2,500 there.

Instead of HDFC Equity or DSPBR Top 100, choose UTI Top 100 and SBI Magnum Equity, which are other large-cap oriented funds with a track record of higher returns.

A sum of ₹2,250 each can be invested in Franklin Flexicap, which is a multi-cap fund, and in HDFC Mid-cap Opportunities.

With this combination, you will roughly be parking 60 per cent of your SIP amount in safer large-cap oriented funds and 40 per cent in slightly riskier mid and multi-cap funds. This allocation will suit a moderate risk appetite and is ideal for you.

Since you have a long horizon, you neither need to keep risks quite low, nor unnecessarily high.

Considering the 31 years you have to go before retirement, you can do away with defensive picks such as HDFC Prudence, a balanced fund, and UTI Dividend Yield, a theme that works well predominantly in volatile markets.

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