I have been investing in mutual funds from 2008. I am 45 years old and work in LIC. I am planning to build a corpus for my retirement, which is 15 years away. I hope to get my daughter married after five years.

I am eligible for pension after retirement and will also receive provident fund from my employer. I want to continue my SIPs till retirement. I own the house I live in and own a plot of land too. I have life insurance and medi-claim policy.

I have been investing in the following mutual funds from 2008: Rs 1,000 each in ICICI Focussed Blue Chip Equity, Sundaram Select Focus, Sundaram Select Mid Cap and Quantum Long Term Equity (started recently). I also invest Rs 1,500 a month in HDFC Top 200 and Rs 2,000 each in Templeton India Growth and Goldman Sachs S&P CNX 500 index fund. I have online access to my mutual fund portfolio and invest during sudden market falls. Kindly advise whether my portfolio needs to be restructured for improving returns.

G Srinivasulu

Annakapalle, A.P

You have said that you would like to build your retirement portfolio. We, therefore, assume that you have provided for your daughter's wedding expenses. In case you have not, avoid dipping into your retirement kitty. Invest separately for it and use your plot of land to meet any shortfall, if you have no other plan for it.

Pension not enough

Coming back to your retirement plan, you have stated you will receive pension. But more often than not, it will hardly suffice to meet monthly expenses.

Hence plan to build an adequate retirement nest and provide for medical expenses that may not be covered in your medi-claim policy.

With some rejig in your current portfolio you will be able to build about Rs 1.2 crore in 15 years, if your large-cap and diversified funds yield 15 per cent compounded annually and your mid-cap funds deliver 20 per cent.

Increase your monthly investments if you feel you need a larger corpus.

In the absence of details, we are assuming that you started investing sometime in mid-2008.

You can continue SIPs in ICICI Pru Focussed Blue Chip, HDFC Top 200, Templeton India Growth, Sundaram Select Midcap and Quantum Long Term Equity funds.

Switch your SIPs in Sundaram Select Focus to Quantum Long Term Equity, as it has lost steam and lagged quite a few large-cap funds. Besides, HDFC Top 200 and ICICI Pru Blue Chip should provide you sufficient exposure to large caps.

Remember to review Sundaram Select Midcap's performance every year. If it lags peers such as IDFC Premier Equity or HDFC Mid-Cap Opportunities by over 5 percentage points in returns, discontinue it and switch to IDFC Premier Equity. Stop your SIPs in CNX 500 and simply continue to hold it. You can instead divert this monthly SIP into IDFC Premier Equity, as in the Indian context, actively managed funds have fared better than indices, especially if you use the SIP route.

Since you have stated that you invest during market falls, consider buying small lots of Nifty ETFs or invest limited sums in the CNX 500 index fund during market falls of 5-10 per cent.

Reduce your equity exposure a year or two before retirement.

Invest the booked profits and provident fund proceeds in safe debt avenues such as bank deposits, bonds and corporate deposits of large companies with good credit standing.

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