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Which mutual fund schemes should an NRI invest in for the long term | NRI investments in India

Long Term Mutual Fund Investment

For debt asset allocation, NRIs will be better off choosing NRE deposits given their tax free status and higher rates now.. […]

My NRI son wants to invest a lump sum of Rs 6 lakh in mutual funds and start monthly SIPs of Rs 30,000 for the long term. Please suggest schemes to invest in.

C.R. Chandrasekar CEO and Co-Founder, FundsIndia.com replies: We assume your son is not an NRI based out of US or Canada as there are few fund houses that offer schemes for such investors.

For debt asset allocation, your son will be better off choosing NRE (non-resident external rupee account) deposits given their tax free status and higher rates now. He can consider putting Rs 3 lakh of the lump sum in such deposits. For equity, he can consider putting Rs 1.2 lakh (40%) in hybrid fund ICICI Pru Equity and Debt and Rs 60,000 (20%) each in Mirae Asset India Equity, Kotak Standard Multicap and Franklin India Prima. The same proportion can be used to invest via SIPs in the above mentioned schemes. It is advisable that your son have at least a 5-year investing horizon.

My wife and I earn a pension of Rs 70,000 a month. We have invested Rs 30 lakh in SCSS, Rs 70 lakh in bank fixed deposits and have Rs 35 lakh in mutual funds. I started a new monthly SIP of Rs 25,000 in August 2017. Gains from mutual funds have fallen sharply this year. Although I do not need the money, should I redeem my MF investment, remain invested, or top up to take advantage of the lower NAV.

Jayant R. Pai CFP and Head of Marketing, PPFAS Mutual Fund replies: Based on the information provided by you, it seems your monthly expenses are being met through your pension, SCSS and interest from fixed deposits. Assuming you have invested in equity mutual funds that suit your risk profile, and you can remain invested for a reasonably long period—5-7 years. You should continue your SIPs without being getting worried about short-term market movements. You may also top it up, if it won’t upset your chosen asset allocation.

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