Should I invest in a single mutual fund or six schemes?

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I am a 31-year-old doctor with a moderate to high risk appetite. I want to create a corpus of Rs 1 crore in 15 years. I can invest Rs 30,000 each month. Kindly suggest how to invest. Should I invest Rs 10000 in three large cap or flexi funds or Rs 5000 in six funds, or Rs 30,000 in a single fund?

–Rohit Kumar

We always ask our readers to choose schemes based on their goals, investment horizon and risk profile. Since you are investing for a long term goal you can invest in equity mutual funds that invest in stocks. However , the mutual fund category will depend on your risk profile which you have mentioned as moderate to high. It’s vague- you have to find out how much high risk you want to take to make extra returns. You can do two things. One, take an online quiz to find out your risk profile and choose schemes that match your profile. Two, fix what percentage of your investments you want to invest in risky assets- say, 10-20% and stick to the plan. We believe that as a new investor you should not invest in risky schemes like sector schemes or small cap schemes. These schemes are highly volatile and they go through prolonged periods of lows. A new investor will not have the discipline to continue with investments during a bad phase. Our advice will be to invest in two flexi cap schemes that invest across market capitalisations and sectors.

Best flexi cap funds



Investing a small amount in too many schemes will not offer you the benefit of diversification or to help you to maximise your returns. Often it results in over diversification and duplication of portfolios. Choose two schemes to begin with. You can add more schemes when you start investing a very large amount.



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