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I have saved ₹12 lakh from my salary. The funds are in a savings bank account. Due to extreme volatility in markets, I have not invested this sum. Markets are at all-time highs. These funds are needed only in 2028 and 2030. Can I request your guidance on how and where to deploy this lump-sum amount? I am not concerned about volatility, since its normal in equity/MF investment. My concern is entry time and fear of buying at high prices, which may impact the returns.
Balaji, Bengaluru
Though holding funds in a savings bank account preserves your capital, it does very little in terms of making your money grow. Today, a savings account with SBI, for instance, fetches 2.7 per cent interest for any amount above ₹1 lakh. Yes, private banks such as Kotak Mahindra Bank offer a higher 4 per cent on savings accounts with a balance of over ₹1 lakh. But even this is not surely tempting enough to leave funds idling in bank accounts as the returns may not match inflation.
Kotak Emerging Equity Fund: Discovering hidden mid-cap gems
Yoganand D
BL Research Bureau |
Updated on
February 20, 2021
The scheme invests in both value and growth stocks, and follows a buy-and-hold strategy
With the Budget broadly focussing on economic revival and long-term growth, mid-cap companies could benefit from the growing economy in the long run.
Investors with a high risk appetite can take exposure to the mid-cap segment and buy the units of Kotak Emerging Equity that predominantly invests in mid-cap stocks and has delivered consistent returns over the long term.
For instance, the fund has clocked 12.48 per cent and 19.5 per cent over the past three- and five-year time-frames beating the benchmark, Nifty Midcap TRI, returns of 6.9 per cent and 16 per cent, respectively.
With your investment horizon of five to 10 years and suboptimal returns generated by current fixed income products, which fail to beat inflation, I would recommend you to invest in the equity markets.