I am a new investor. I started two SIPs in ICICI Prudential Multi Cap (R) and ABSL 96 (R) (Rs 2,500 per month in each of them). Then I have also applied for HDFC RSP (D) for Rs 2,000/month and HDFC Small Cap (D) for Rs 1,000/month. That is a total of Rs 8,000/month. My target is wealth creation. and I am planning for 5-7 years for ICICI and HDFC Small Cap. I am thinking about investing in SBI Small Cap and Mirae Asset Equity funds as well. Kindly guide me whether I should do it?
Since you are a new investor, you should consult a mutual fund advisor in your locality before proceeding further. Many new investors focus solely on returns and pick up small cap schemes. However, when these schemes get into a bad phase these investors tend to panic and abandon their investment plans. That is why we always ask investors to choose mutual fund schemes based on their goals, investment horizon and risk profile. Investors should take an online quiz or ask their mutual fund advisor to help them to assess their risk profile. Once that is done, they should choose equity mutual funds based on their risk appetite to achieve their long-term financial goals. For example, if your risk profile is conservative, your mutual fund advisor would ask you to invest mostly in large cap mutual fund schemes. If you have a moderate risk profile, you should be investing in multi cap mutual fund schemes. Aggressive investors can opt for mid cap and small cap schemes. Proceed with caution – it is not wise to take unnecessary risk.