Should I consolidate my SIPs to build ₹2 crore corpus in 7 years?

My systematic investment plans (SIPs) include ₹22,000 in HDFC Index Fund, ₹15,000 in Axis Midcap, ₹13,000 in Nippon Small Cap, ₹15,000 in Parag Parikh Flexi Cap, ₹7,000 in Quant Tax Plan, ₹2,000 in Canara Robeco Equity Tax Saver, ₹10,000 in ICICI Balanced Advantage Fund, and ₹5,000 in Axis Bluechip Fund.

To meet my financial goals, should I consider consolidating my SIPs further by removing specific funds? Additionally, I intend to keep my investment in the ICICI Balanced Advantage Fund for the long term, viewing it as part of my retirement fund alongside my employee provident fund (EPF) and public provident fund (PPF).

—Name withheld on request

Having clarity on financial goals and investing across different funds based on market capitalization is always a good strategy and it is good to see you following it. Out of your current investments, you can continue to hold ₹5 lakh in FD as contingency fund to ensure that no emergency derails your investments. The funds you are investing in are good and have delivered good returns for their investors. You may consider replacing Axis Bluechip Fund as it has been underperforming recently. You can invest the same in SBI Large & Mid Cap, or if you want to invest in a large-cap fund, then ICICI Prudential Bluechip Fund could be a good alternative.

On the balanced fund, ICICI Prudential Balanced Advantage is a good fund. However, if you are looking at it from a retirement perspective, then you can invest in equity funds. Your investment in EPF and PPF is already playing the role of debt investment for your retirement corpus.

To accumulate ₹2 crore in 7 years, you need to invest ₹1.33 lakh per month or ₹1.2 lakh per month, if we assume returns of 10% per annum (p.a.) and 12% p.a. respectively.

It is also assumed that your existing ₹21 lakhs ( ₹13 lakh in mutual funds and ₹8 lakh in equity) are invested for the same goal. You will have to increase your existing investment of ₹89,000 per month to build a corpus of ₹2 crore.

If you increase your SIP amount by 12% every year, then you will be able to achieve your goals as well. This can be a good strategy as you can plan your future investments and at the same time keep increasing SIPs as you grow in your career as well.

Harshad Chetanwala is co-founder at MyWealthGrowth.com.