Can I invest in these mutual funds for five to 10 years?

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I am planning to invest in mutual funds from this month through monthly SIP of Rs 5,000 in each of these funds:
Aditya Birla Small Cap Fund
HDFC Small Cap Fund
Kotak Emerging Equity Scheme
L&T Midcap Fund
Reliance Growth Fund
My investment is long term: 5 to 10 years. I want to invest in aggressive and moderate schemes. How much return can I expect from these funds in five to 10 years? Should I proceed or change funds considering present and future?
--Deepak Mandal

It seems, you are new to investing in mutual funds. If so, please consult a mutual fund advisor near you before proceeding. It is not easy to manage your investments on your own in the initial years of your investment life. You may think of managing your investments on your own after you gain enough experience in a few years.

We do not recommend mid cap and small cap mutual funds to new investors. These schemes are extremely risky, and they can also be very volatile. Only an investor with a very high risk tolerance level would be able to continue with these schemes during tough times. Many new investors who think they have a very high risk tolerance level often get nervous when these schemes lose value sharply or when they get volatile for a very long time. Also, investors should have a longer horizon of seven to 10 years while investing in mid cap and small cap schemes.


You should start by taking an online quiz to find out your risk tolerance level. Once you know your risk profile, you should choose schemes with matching profile.

Mutual funds do not guarantee any returns. However, you may assume 10-12 per cent returns from equity mutual funds over a long period.

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