I am 38 years old, and have been investing Rs 1,000 each in the following funds since June 2012: HDFC Balanced, Reliance Regular Savings Balanced, HDFC Top 200, DSP BR Top 100 Equity, ICICI Pru Focussed Bluechip, Franklin India Bluechip, Canara Robeco Equity Diversified, Reliance Gold Savings, and Rs 2,000 in IDFC Premier Equity Fund-Plan A.

My home loan payment schedule is ending this October and I plan to add an additional Rs 10,000 to my MF investments. I would like to have an amount of Rs 1 crore in 15-18 years towards the education and marriage of my two children.

My PPF, EPF and VPF should take care of my retirement needs. Please let me know if I can achieve this target and also suggest any changes that may need to be made in my portfolio.

Jude Lazaro You have made it easier for yourself to achieve your targeted corpus by having a long investment horizon and choosing the right avenues to park your surplus.

But there are some flaws in the way you have constructed your portfolio.

You have spread Rs 10,000 across as many as nine schemes, which is way beyond what you can track. This gives scope for a lot of duplication in your portfolio too.

For the amount that you are investing currently, you should not be holding more than three funds.

You have stated that you would like to invest another Rs 10,000 from later this year.

So for the total amount of Rs 20,000, you need to invest in about five funds.

Coming to your portfolio, you do not need two balanced funds. Retain HDFC Balanced and exit Reliance Regular Savings Balanced as the former has a more consistent track record.

Retain HDFC Top 200, which is a large-cap fund with a small quantum of mid-cap stocks thrown in. This has had an excellent track record over the past 10 years.

Now, DSPBR Top 100 Equity, ICICI Pru Focussed Bluechip Equity and Franklin India Bluechip are all pure large-cap funds.

You need to retain only one of the three. We suggest you continue with ICICI Pru Focussed Bluechip as the fund has delivered quite well over the past four years and has outpaced the other two large-cap schemes in your portfolio consistently over the past few years.

You can retain Canara Robeco Equity Diversified, Reliance Gold Savings and IDFC Premier Equity.

Split Rs 20,000 as follows: invest Rs 4,000 each in HDFC Top 200, ICICI Pru Focussed Blue Chip Equity, Canara Robeco Equity Diversified and IDFC Premier Equity. Invest Rs 2,000 each in HDFC Balanced and Reliance Gold Savings.

If your investment of Rs 20,000 a month grows at the rate of 12 per cent, you can achieve your target of Rs 1 crore in 16 years’ time. The returns assumed are quite reasonable.

Review your portfolio periodically and take corrective action, if necessary. If you reach your target ahead of time, sell the units and move the proceeds to safer debt avenues.

*** I just realised that I cannot invest in UTI CRTS 81 as an individual. I have dropped that fund and redistributed my monthly SIP structure as follows: Quantum Long Term Equity – Rs 3,500; SBI Emerging Businesses – Rs 3,500; HDFC Balanced – Rs 3,000. Please tell me if this is adequate.

Amruta

Investments in UTI CRTS can be done only by trusts.

Coming to your portfolio, you have chosen a reasonably good set of funds. You can, however, reconsider investments in SBI Emerging Businesses.

This fund has delivered well over the past couple of years, but its investment profile makes it a tad risky. If you want a more consistent mid-cap fund that has delivered well across market cycles, you can switch to IDFC Premier Equity.

*** I am 57 and have been investing in MF for almost 10 years now. I have SIP of Rs 5,000 each in HDFC Equity, HDFC Top 200, HDFC Prudence and DSP BR Top 100.

Can I continue investing in the same for three more years?

R Balu Having been an investor in mutual funds, you must have reaped good returns over the past 10 years.

Coming to your portfolio, you have chosen three funds from the HDFC stable.

Although all of them have a good track record, this kind of investment increases concentration risk and also denies you the opportunity to benefit from the styles of other fund houses.

HDFC Equity and HDFC Top 200 have considerable portfolio overlap. You can retain HDFC Equity alone and park Rs 5,000 there. You can also switch from DSPBR Top 100 to ICICI Pru Focussed Bluechip or Franklin India Bluechip and invest Rs 5,000. Retain HDFC Prudence.

The balance Rs 5,000 can be parked in Quantum Long Term Equity, a multi-cap fund with an excellent track record over the past few years.

(Queries may be e-mailed to > mf@thehindu.co.in )

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