I am 50 years old and have a moderate risk appetite. I have been investing in the following funds for the past 4 years:
For the last two months I have started investing in the following:
- Kotak Pioneer Fund – Regular Plan – Growth Option: Rs 5,000 per month;
- PGIM India Mid Cap Opportunities Fund – Regular Plan – Growth Option: Rs 10,000 per month;
- Kotak Small Cap Fund – Regular Plan – Growth Option (Erstwhile Kotak Midcap) : Rs 5,000 per month.
Now my total investment every month is Rs 35,000. I am investing for a period of ten years. What kind of returns should I expect in ten years from now? Are these funds good quality funds?
—Harish P Bajaj
Joydeep Sen, Corporate trainer and author, based out of Mumbai responds:
You are asking about the return expectation in the future, but the future is by definition uncertain. Historically, it has been seen that returns from equities are around the nominal GDP growth of the country. Nominal GDP growth is real GDP growth plus inflation. The logic is, over a period of time, the growth of business and EPS of companies is somewhere around the nominal GDP growth. From this perspective, your growth should be in double digits. I hope you have chosen these schemes in line with the risk profile because equities can be volatile in the near term. The funds are good if they match your goal and risk appetite.