How to create Rs 2.5 crore for my kid’s higher education?

I am investing for my kid’s education and I have an investment horizon of 15 years. Is it a good idea to continue with my existing mutual fund portfolio? I am investing in mutual funds through an advisor. I am planning to make some lumpsum investments when I get a bonus. My risk profile is moderately high and my goal is to create a corpus of Rs 2.5 crore. I am investing Rs 29,000 through SIPs in the following mutual fund schemes:

Aditya Birla Sun Life Equity (G): Rs 2,000
DSP BlackRock Midcap Fund (G) : Rs 2,000
Franklin Smaller Companies Fund (G): Rs 2,000
Invesco India Growth Opportunities Fund (G)
Kotak Standard Multicap Fund (G): Rs 6,000
Mirae Asset Tax Saver Fund (G): Rs 8,000
Mirae Asset Great Consumer Fund (G)
Mirae Asset Hybrid Equity Fund (G)
SBI Bluechip Fund (G): Rs 2,000
Tata Equity PE Fund (G) : Rs 2,000
Motilal Oswal Multicap 35 Fund: Rs 5,000

Should I continue with this mutual fund portfolio? Or, do I need to increase the SIP amount? Is it worth continuing the SIP in DSP BlackRock Midcap Fund? I am also planning to start an SIP in Mirae Asset Great Consumer Fund (Rs 6,000) and Invesco India Growth Opportunities Fund (Rs 4,000).

-- Subhasri Rajagopalan

Puneet Oberoi, founder, Excellent Investment Advisorz, responds:

Assuming an annual return of 13 per cent, you need to invest Rs 48,000 per month to create a corpus of Rs 2.5 crore at the end of 15 years. That means, you need to increase your SIPs by Rs 19,000 per month.

Investing in a lot of mutual fund schemes will not diversify your portfolio or reduce risk. When you create a mutual fund portfolio, you have to look at a lot of parameters like your risk appetite and whether the schemes have a lot of common holdings, etc. In your portfolio, a lot of schemes have common holdings. That means you are not actually diversifying. Your investments might be high on certain stocks.

You need to consolidate your mutual fund portfolio. You should not invest in more than four to five mutual fund schemes. As your investment horizon is long and you have a moderately high risk appetite, you can invest in the following schemes:

ICICI Prudential Bluechip Fund : Rs 10,000 (Largecap)

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Franklin India Smaller Companies Fund : Rs 10,000 (Smallcap)
HDFC Small Cap Fund : Rs 10,000 (Smallcap)
IDFC Focused Equity Fund : Rs 10,000 (Largecap)
Aditya Birla Sun Life Tax Relief 96 Fund : Rs 8,000 (Small & midcap)

Many DSP mutual fund schemes are performing poorly in the past one year. Also, there are some changes coming up in the fund house. DSP BlackRock Midcap Fund has underperformed in the past six and three month periods. But now it has started to make a come back. These kind of ups and downs happen across all mutual fund schemes. I would suggest you to continue investing in the scheme and monitor it constantly.