The sole purpose behind investing in children’s plan is to have a habit building approach and then tag a particular portion of one’s income to children’s future goals. No other financial goal has a stronger emotional connect among parents than children’s education and marriage-related expenses.

In the mutual fund bin, children’s funds and retirement funds (also known as solution-oriented funds) collectively manage nearly Rs 30000 crore of investors’ wealth and this asset base has been growing over the years. Investors in solution-oriented funds have benefited from a disciplined savings habit. As of December 2021, Children’s funds have fetched 13.4% CAGR on an average over the past 10 years. Funds like HDFC Children’s Gift Fund and ICICI Child Care Gift fund have delivered a healthy return of 16.7% and 15.6% respectively.

For a successful child education planning, one needs a goal-oriented approach and not necessarily a goal-based product. For a child’s higher studies, one may opt for a core and satellite approach wherein the core portion can be invested in children’s funds or equity funds. In order to plan for child’s future education goals abroad and hedge the currency risks, a parent can think of putting money in international feeder funds.

In today’s world, education is an expensive necessity. Start as early as possible and let the power of compounding help you reach the goal of amassing your child education fund in 5-10-20 years. Don’t be overawed by big numbers – Start small, start early & start today with Prime Finvest Services.

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