What are the best investment avenues for a millennial to invest Rs 10,000 per month?


My daughter is 23 and earns Rs 23,000 a month. She wants to invest Rs 10,000 a month. Please suggest some investment avenues. Her horizon is five years.
Prableen Bajpai Founder, Managing Partner, FinFix Research & Analytics 
replies: At your daughter’s age, around threefourth of her savings should ideally be allocated to an equityoriented fund. However, the decision is dependent on other factors such as the financial goal, risk appetite and investment horizon. You have defined a five-year time horizon which makes equity investment slightly tricky. Further, there is no mention of any specific goal or risk appetite. Based on the information, you can go with two broader approaches.

First, if you have a fixed timeline and wish to go with a low risk product, then invest Rs 10,000 per month in a low duration debt fund or open a recurring deposit account. A low duration debt fund has no exit load and the money can be withdrawn whenever needed and the returns should be more or less in line with regular fixed income options.

Alternatively, if some amount of risk can be taken, and part of the investment can be held for around seven to 10 years, then split the investment into two components—equity and debt. Invest one half in a multi-cap fund and the other in a debt fund. This way, part of her savings would be secure while the other half will provide some boost to the overall portfolio. While you can decide on the break up between equity and debt based on your comfort and goal, do allocate some amount to an equityoriented fund with a long-term view.

I am a 26-year-old software engineer. I have no investments other than my EPF and PPF accounts. What investment options should I consider? I have read about mutual funds but don’t know where to begin.
Vidya Bala, Co-Founder, Redwood Research
 replies: You have started with good fixed income options. However, to make your wealth grow, you need some equity exposure through mutual funds. Consider starting SIPs in Mirae Asset Large Cap and Parag Parikh Long Term Equity in equal amounts and about 10-20% in Kotak Emerging Equity. If you need a taxsaving fund, add Axis Long Term Equity. Please keep a minimum time frame of seven years and do not stop the SIP when markets go down or up. Increase the SIP with increase in salary. Continue your debt investments through EPF and PPF.