I intend to invest a lump sum amount for my new born daughter. Please advice the funds that I can invest in with a 5-year term.
Jayabala Rao, Hyderabad
It is encouraging to note your eagerness to invest for your new born daughter. However, instead of a one time lump sum, you will be better off investing a regular sum each month through systematic savings. Moreover, you should be aware that there is an element of risk in timing your investment when you go in for lump sum investments. Although you have not stated the lump sum amount, it may be a good idea to park this in a liquid fund and initiate a systematic transfer plan to a diversified equity fund depending on your risk tolerance. By starting a SIP you do not have to worry about timing the market, moreover, your investments will average out the acquisition over time and also gain from the power of compounding in building a sizeable corpus for your daughter in five years. You could look for funds from the OLM Elite list to invest.
