Best Equity Mutual Funds to Plan for Your Daughter’s Wedding Expenses

Sep 17, 2021

Listen to Best Equity Mutual Funds to Plan for Your Daughter’s Wedding Expenses

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Best Equity Mutual Funds to Plan for Your Daughter’s Wedding Expenses
 

A daughter's marriage is a bittersweet moment for every parent. While you are ecstatic for her to start a new journey, you also secretly dread the costs that come with a wedding fit for your little princess. Though extravagant, we believe that planning your daughter's marriage is one of the simpler goals that is 100% achievable if you do two things correctly --- by investing in the best equity mutual funds for your daughter's wedding and starting as early as possible.

Wedding ceremonies in India have evolved from a small mandap with near and dear ones to destination weddings in exotic palaces and locations. All you need to make your daughter's dream wedding a reality is to invest in the best equity mutual funds.

In this article, we will reveal a list of the best equity mutual funds for your daughter's wedding that is a cut above the rest, as we are not sticking to traditional investment options like the Sukanya Samriddhi Scheme or physical gold. We are changing the status quo on how retail investors, like you, must plan and invest for their daughter's wedding.

But before we reveal this list of the best equity mutual funds for your daughter's wedding, let us take a step back and actually try to find answers to two important questions:

  1. How much money/corpus do you need for your daughter's wedding?

  2. Why invest in equity mutual funds for your daughter's wedding?

The first question is a little difficult to answer. After all, how do you put a price tag on your daughter's happiness on the biggest day of her life? Well, fashion designers and jewellers have taken quite a good guess. The majority of typical brides today want to dress up in a Sabyasachi lehenga like Anushka Sharma and Deepika Padukone did. This will cost you, on a conservative side, approximately Rs 5 Lakhs and the remaining of the trousseau would cost another Rs 5 Lakhs.

Apart from this, gifting gold is paramount in Indian weddings. It is an embodiment of Indian culture and not to forget, reflects on the 'status' and 'love' of the parents. It is an asset class that can be passed on to generations. However, the quantum of gold to be gifted may differ from region to region. While 10-20 tola (10 grams is equal to one tola) seems adequate for a Maharashtrian household, Southern India gifts as much as 50 tolas and more in their daughter's wedding. The current price of gold per 10 grams as of 16th September 2021 is Rs 46,854. Assuming an average of 30 tolas of gold, parents would be splurging approximately Rs 14-15 lakhs on gold.

Further, no wedding discussion is complete without food. Parents should also allocate Rs 5-10 Lakhs on food and another Rs 10 Lakhs for that swanky venue and accommodations.

Here's a round-up of all the costs involved in planning your daughter's wedding as illustrated in the graph below.

Average-Marriage-Expenditure
(The graph above is for illustration purposes only)
 

So, on an average, Indian parents should be ready to shell out Rs 50 Lakhs or more for their daughter's wedding. But this is in current pecuniary terms. The graph below shows the future value of Rs 50 lakhs after 5, 10, 15, and 20 years. So, as a parent, you can decide for yourself the corpus required for your little princess's wedding.

Future-Value-of-Rs-50-Lakhs
*10% inflation rate
(The graph above is for illustration purposes only)
 

Presuming a 10% inflation rate, parents of a 5-year-old girl, assuming she gets married at the age of 25, would be spending approximately Rs 3.36 crores on her wedding. While this looks to be an uphill battle, remember we mentioned at the beginning of the article, how your daughter's wedding is a 100% achievable goal? Well, here's the proof...

Monthly-SIP-Required-to-Achieve-Wedding-Corpus
* Assumed rate of return - 1,5,10 years - 15%; 15 years - 12% and 20 years - 8%.
(The graph above is for illustration purposes only)
 

If you start investing when your daughter is one year old, your SIP amount is restricted to Rs 11,936 only, which is easily manageable. However, if you wait till she is 15 years old to start investing, then you will be shelling out as much as Rs 1.44 Lakhs every month! Remember, planning for your daughter's wedding can be a nightmare only if you start late.

Then again, simply starting early is not enough either. The above calculation reflects a 15% return on investment (ROI), which is a lot more than what traditional investment options like the Sukanya Samriddhi Scheme and insurance policies targeted for a daughter's marriage would be able to generate. The most effective way out is to invest in the best equity mutual funds for your daughter's wedding.

The most positive aspect of planning for your daughter's wedding, apart from the pride and happiness you feel when you are able to fund her grand wedding, is the fact that you have time on your side. Planning financially for your daughter's wedding is a long-term goal for a majority of investors and hence equity mutual funds are their ideal match. With equity mutual funds and a long-term investment horizon, investors have ample time to make mistakes and compound gains.

Let us now finally look at the best equity mutual funds for your daughter's wedding. This list is suitable for investors with a long-term investment horizon of 10+years and a moderate-to-high risk profile.

Our list of the best equity mutual funds for your daughter's wedding features the following mutual fund categories:

Best-Equity-Mutual-Funds-for-Daughter's-Marriage
(The graph above is for illustration purposes only)
 
  • Large-cap Funds

  • Flexi-cap Funds

  • Large & Midcap Funds

  • Midcap Funds

  • Gold Funds

Let us take a detailed look at the best equity mutual funds in each of the above categories.


Best Equity Mutual Funds for your Daughter's Wedding -- Large-Cap Fund Category

You might be wondering why we've included large-cap funds in our list of the best equity mutual funds for your daughter's wedding. A majority of investors identify large-cap funds to be a safe bet and might find them unnecessary in a portfolio targeted for long-term wealth creation. But we disagree.

Large-cap funds provide much-needed stability to the portfolio since they invest in stocks of market leaders with high brand recall value, in-demand products and services, and huge cash reserves making them resistant to economic shocks. Large-cap funds also give you the bandwidth to invest in riskier funds like midcap funds once stability is ensured. Historically, large-cap mutual funds have generated a return of 12%-13% in a 10+-year time horizon.

The below table shows the two best equity mutual funds for your daughter's wedding from the large-cap category:

Best equity mutual funds for your daughter's wedding - Large-cap Category 1 Year (%) 3 Years (%) 5 Years (%) Since Inception (%)
Canara Robeco Bluechip Equity Fund 52.05 19.55 17.15 13.82
Mirae Asset Large Cap Fund 50.55 16.14 16.47 16.58
Data as of 15th September 2021
Returns are expressed on a Point-to-Point basis. Up to 1-year returns are on an absolute basis, while periods over a year are compounded annualised.
(Source: ACE MF, PersonalFN Research)
 

[Read More: Best Large Cap Mutual Funds to Invest in 2021]


Best Equity Mutual Funds for your Daughter's Wedding - Flexi-Cap Fund Category

The biggest advantage with Flexi-cap mutual funds is that they have the freedom to invest dynamically across large, mid and small-cap stocks. While this freedom gives the fund manager the flexibility to explore different stocks across the market capitalisations and sectors, it also brings in additional risk to the portfolio. As of 15th September 2021, flexi-cap funds have managed to generate a CAGR of 15.2% over a 10-year period.

Best equity mutual funds for your daughter's wedding - Flexi-cap Category 1 Year (%) 3 Years (%) 5 Years (%) Since Inception (%)
Canara Robeco Flexi Cap Fund 56.51 20.18 18.18 18.96
Parag Parikh Flexi Cap Fund 59.34 24.86 21.84 21.12
Data as of 15th September 2021
Returns are expressed on a Point-to-Point basis. Up to 1-year returns are on an absolute basis, while periods over a year are compounded annualised.
(Source: ACE MF, PersonalFN Research)
 

[Read More: Best Multi-Cap/Flexi Cap Funds to Invest in 2021]


Best Equity Mutual Funds for your Daughter's Wedding -- Large & Midcap Fund Category

Large & Midcap funds are a potent mix of large-cap stocks and mid-cap stocks which will give your portfolio the stability of Bluechip companies coupled with the aggressive growth of mid-cap stocks.

As per the SEBI's definition, Large & Midcap Funds must invest a minimum of 35% of their total assets in equity and equity-related instruments of large-cap companies and at least 35% in midcap stocks. As of 15th September 2021, large and midcap funds have generated a CAGR of 16.37% in the last 10-years.

Here are our two best equity mutual funds for your daughter's wedding from the large & midcap category:

Best Equity Mutual Funds for your Daughter's Marriage - Large & Midcap Funds 1 Year (%) 3 Years (%) 5 Years (%) Since Inception (%)
Mirae Asset Emerging Bluechip Fund 66.54 23.73 21.46 22.61
Canara Robeco Emerging Equities Fund 61.46 19.10 18.59 18.40
Data as of 15th September 2021
Returns are expressed on a Point-to-Point basis. Up to 1-year returns are on an absolute basis, while periods over a year are compounded annualised.
(Source: ACE MF, PersonalFN Research)
 

[Read More: Best Large and Mid-Cap Mutual Fund to Invest in 2021]


Best Equity Mutual Funds for your Daughter's Wedding -- Midcap Fund Category

The next and riskiest category on our list of the best equity mutual funds for your daughter's wedding is Mid-cap Funds. Mid-cap funds find their place on the higher end of the risk-return spectrum compared to the sub-category of equity schemes discussed above. And at the extreme high end of the risk-return spectrum are small-cap funds and sectoral/thematic funds.

Mid-cap mutual funds are risky because they are mandated to invest at least 65% of their corpus in equity and equity-related instruments of midcap stocks -- which belong to relatively smaller companies having limited cash reserves and are highly prone to economic downturns. But as is the case with mutual funds, high risk is accompanied by high returns. Hence, mid-cap funds are one of the most promising for wealth generation provided you are willing to take the extra risk and have a longer investment horizon. As of 15th September 2021, mid-cap mutual funds have generated a CAGR of 18.49% in the last 10-years.

Here are our two best equity mutual funds for your daughter's wedding from the mid-cap funds' category:

Best Equity Mutual Funds for your Daughter's Marriage - Midcap Funds 1 Year (%) 3 Years (%) 5 Years (%) Since Inception (%)
Axis Midcap Fund 64.23 23.40 21.29 20.09
Kotak Emerging Equity Fund 72.16 22.08 17.93 14.53
Data as of 15th September 2021
Returns are expressed on a Point-to-Point basis. Up to 1-year returns are on an absolute basis, while periods over a year are compounded annualised.
(Source: ACE MF, PersonalFN Research)
 

[Read More: Best Midcap Funds to Invest in 2021]


Best Mutual Funds for your Daughter's Wedding -- Gold Fund Category

And now finally we come to gold mutual funds. They are extremely popular among parents when planning for their daughter's wedding. You see, gold as an asset class is a great way to hedge your equity investments. Remember, gold is symbolic of Goddess Lakshmi, a mark of wealth, highly liquid (a new currency), shield against inflation, and will prove to be an effective portfolio diversifier. It carries a store of value particularly during uncertainties.

However, parents should refrain from investing 100% of their savings in gold mutual funds alone as the shiny metal has had its bouts of underperformance as reflected in the graph below.

Bouts-of-underperformance-as-reflected
(Source: ACE MF, PersonalFN Research)
 

So, we would recommend parents to approach gold strategically from a portfolio diversification standpoint and not invest more than 10-15% in gold mutual funds for their daughter's marriage.

[Read More: Why Gold May Not be the Best Bet for Investors in 2021]

Here are our two best mutual funds for your daughter's wedding from the gold mutual fund category.

Best Mutual Funds for your Daughter's Marriage - Gold Funds 1 Year (%) 3 Years (%) 5 Years (%) Since Inception (%)
Quantum Gold Savings Fund -9.87 14.08 7.32 6.19
HDFC Gold Fund -10.08 13.95 7.18 4.10
Data as of 15th September 2021
Returns are expressed on a Point-to-Point basis. Up to 1-year returns are on an absolute basis, while periods over a year are compounded annualised.
(Source: ACE MF, PersonalFN Research)
 

This concludes our discussion on the best mutual funds for your daughter's wedding.

Back in the 1950s through 1970s, parents used to struggle planning for their daughter's marriage and would resort to selling their valuables and properties to fund their dream wedding. However, parents of the 21st century needn't be under such intense pressure or make such sacrifices. All you have to do is plan well and invest sensibly in the best equity mutual fund schemes out there. And the earlier you start, the more comfortably you will be able to build the desired corpus for your daughter's wedding. Invest in PersonalFN's time-tested list of the best equity mutual funds in 2021!

On a serious note, if you are looking to plan and invest for your daughter's wedding then you have found your ideal match in PersonalFN's unbiased and unparalleled research service, FundSelect. Under FundSelect, we aim to recommend equity funds that have the potential to generate superior returns and beat the category average and broader market index like S&P BSE 200 in the long run.

At PersonalFN we follow a S.M.A.R.T Score Matrix, wherein we evaluate:

  • S - Systems and Processes

  • M - Market Cycle Performance

  • A - Asset Management Style

  • R - Risk-Reward Ratios

  • T - Performance Track Record

The stringent process has helped our valued mutual fund research subscribers to own some of the best mutual fund schemes in the investment portfolio with a commendable long-term performance track record.

With FundSelect, you will get insightful guidance and recommendations on some worthy funds having high growth potential in the years to come.

We will also help you choose some of the best Equity Linked Saving Schemes (ELSS) for your tax-saving with PersonalFN's premium research service, FundSelect.

Backed by our compressive research, we will tell you which mutual fund schemes you should you Buy, Hold, and Sell.

So, say yes to this match made in heaven and subscribe to PersonalFN's FundSelect today!

Happy Investing!

 

Warm Regards
PersonalFN Content & Research Team

 

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