Want to invest Rs 1 lakh every month in FY26? Here's a 4-fund strategy

As the new financial year FY26 begins, many investors are revisiting their investment plans to align with long-term wealth creation goals.

One such investor, Yash Shrimali from Mumbai, appeared on the ETNow’s ‘The Money Show’ with a common yet important query: how to effectively invest Rs 1 lakh every month in mutual funds while keeping the portfolio stable and manageable.

Yash mentioned that he is currently investing Rs 10,000 each across 10 different mutual funds, with a long-term investment horizon of 15 years, and plans to step up his SIP by 5% annually.

The Problem: Too Many Funds, Not Enough Focus


Financial expert Shweta Jain, Founder of Investography, flagged this approach as a classic case of over-diversification. Having too many mutual funds—particularly those with thematic or sectoral exposure—can often lead to portfolio overlap, making it harder to monitor and diluting potential returns.

“There is a problem of plenty here. I would recommend four schemes instead of ten for a Rs 1 lakh SIP,” Jain said on the show.

The Expert-Recommended Solution: A Four-Fund Strategy


For someone investing Rs 1 lakh a month in FY26, Jain recommends consolidating the investments into four well-chosen mutual funds. This structure provides adequate diversification without compromising on simplicity or efficiency.

Here’s the proposed allocation:


DSP Nifty 50 Index Fund – Rs 25,000 per month
A passive fund that brings market stability and forms the core of the portfolio.

Motilal Oswal Midcap Fund – Rs 25,000 per month
Offers exposure to midcap companies with strong growth potential over the long term.

ICICI Prudential Bluechip Fund – Rs 25,000 per month
An actively managed large-cap fund to add consistency and strength to the portfolio.

Bandhan Smallcap Fund – Rs 25,000 per month
Helps capture potential alpha from the small-cap segment while rounding out the portfolio.

“He doesn’t really need any thematic funds to add on to this. This setup ensures a stable and diversified portfolio,” Jain emphasized.

Optional Add-On: Flexibility Through Flexicap


For investors seeking additional diversification, Shweta Jain suggests considering Parag Parikh Flexi Cap Fund, which blends large-cap, midcap, and small-cap exposure, along with a bit of international allocation. In this case, the monthly SIP could be rebalanced to Rs 20,000 per fund across five funds.

The Bottom Line: Keep It Simple, Stay the Course

As investors gear up to make strategic financial decisions in FY26, the focus should be on building a simple, well-diversified, and long-term oriented portfolio. Over-diversification adds complexity without necessarily improving returns.

For someone like Yash—who has both the investment capacity and the time horizon—discipline, fund selection, and consistency will be key to wealth creation.

By streamlining his SIPs from 10 funds to a thoughtfully chosen set of 4 or 5, Yash is well-positioned to meet his financial goals while minimizing unnecessary volatility.

( Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)