Effective strategies to build a diversified mutual fund portfolio with a monthly investment of Rs. 15,000

Are you wondering how to invest your monthly savings of Rs. 15000 to build wealth over time? In this respect, choosing to invest in a mutual fund scheme via an SIP is a great way forward. The key to maximum returns with a mutual fund SIP is consistency and time. The longer you stay invested, the more you can benefit from the potential of compounding. This blog covers all you need to know on how you can generate great returns with a Rs. 15000 investment into a mutual fund:

If you are interested to build a portfolio with a sum of only Rs. 15000, follow the steps listed below:

1. Define your investment goals

It is integral to identify, define, and decide on the investment goals you want to prioritise. These goals do not always have to be specific and can cover broader objectives such as wealth creation, tax saving, or high liquidity.

2. Link investments to financial objectives

Link your mutual fund investments to specific financial objectives that help you create a well structured portfolio. Your objectives can be both short term or long term. So, once your objectives are clear, it is much easier to select funds that ensure your investments stay on the right track.

3. Assess economic factors

Get to know about the wider economic landscape prevalent today. Factors such as government policies, industrial performance, and global market trends can impact mutual fund returns quite considerably. When you invest during a stable and growing market cycle, you can greatly enhance your overall portfolio performance.

4. Determine your investment horizon

Your investment horizon determines how long you plan to stay invested in a mutual fund. Short term goals might require a different strategy as compared to your long term goals. Here is how you can decide with ease:

• Short term goals: If you need funds in the next 1 to 3 years, opt for debt or balanced funds that ensure stability.
• Mid term goals: These foals extend between 3 to 5 years. Consider a blend of debt and high performing equity funds.
• Long term goals: For over 5 years, equity funds have the potential to ensure you higher returns with a higher risk tolerance.

5. Decide how much risk you can digest

Next it is key to assess your risk tolerance. Be honest about how much market risk you can handle. Moreover, if you are not comfortable with market volatility, stick to low risk mutual fund schemes even if they come with a relatively lower return rate.

6. Decide on the number of mutual funds

Avoid overcrowding your portfolio with too many funds. Diversification is essential, but over diversification can dilute returns and make managing your portfolio complicated. Ideally, a balanced portfolio should contain 3-5 schemes with varying asset classes and market capitalisations.

7. Choose the right mutual funds

Different asset management companies come with different returns even for similar fund categories. This is based on their individual investment strategies and the expertise of fund managers. In this regard, consider factors such as expense ratio, past performance, and exit loads, among others.

8. Monitor fund performance

The future potential of a fund may not always depend on its past performance. But, a fund’s past record can be a great indicator to understand how consistently a fund has delivered returns and if it has managed to outperform its set benchmark during the changing market cycles.

• Start by identifying your investment goals. Clear goals help you choose the right mutual funds that align with your objectives.
• Build a diversified portfolio with 3-5 funds across different asset classes and market capitalisations and avoid over diversification.
• Consistently review and adjust your portfolio to ensure it aligns with your financial goals and changing market conditions.

For those starting their investment journey with Rs. 15000 per month, here are some suggested mutual funds:

• Mirae Asset Tax Saver Fund
• Kotak Tax Saver Fund
• Edelweiss Aggressive Hybrid Fund
• SBI Equity Hybrid Fund
• Canara Robeco Equity Tax Saver Fund
• ICICI Prudential Equity & Debt Fund

If you invest Rs. 15000 every month in mutual funds through an SIP, it can be a great way to build wealth over long periods of time. By carefully selecting funds and aligning them with your financial goals, you can create a robust portfolio that works for you the best. Remember to regularly review and adjust your portfolio based on your changing financial situation and market conditions.

Planning on investing in mutual funds? visit the easy to use Bajaj Finserv mutual fund platform and explore over 1,000 mutual fund schemes. Use the Mutual Fund Calculator and do not forget to compare mutual funds before investing.