I have been investing Rs 10,000 every month in Sundaram Capex Opportunties fund for the last 54 months and Rs 20,000 in Birla Sun Life Midcap for the past 26 months. While the former has given negative returns, the latter has generated slightly positive returns.

What do I do with these funds?

P.N.Dalmia There are some key points we wish to highlight on your fund choices as well as on the way you are going about building a portfolio.

You are investing Rs 30,000 every month on just two funds. This means that your portfolio would be too concentrated. You must ideally spread Rs 30,000 over 5-6 funds.

The other key point that you must note is that, tracking a fund’s performance regularly, say, once a year, is very important to balance your portfolio. Despite its tepid record, you have held a fund for 54 months without taking corrective action.

While judging a fund’s returns, you must consider its benchmark’s performance as well as that of peers.

Coming to the funds in your portfolio, you must exit Sundaram Capex Opportunities.

Capital goods, infrastructure and power sectors have had a rough run over the past few years with their recovery not yet in sight.

You can also move out of Birla Sun Life Midcap to a fund with a stronger track record.

Consider splitting your Rs 30,000 as follows:

Invest Rs 6,000 each in Quantum Long Term Equity, IDFC Premier Equity, ICICI Pru Focussed Bluechip and HDFC Equity. Invest Rs 3,000 each in HDFC Balanced and Birla Sun Life Dividend Yield Plus.

*** I am 34 years old and have two daughters. I want to build a corpus of Rs 50 lakh in the next 14 years (2026) for my elder daughter’s education and Rs 1 crore in another 19 years (2031) for my daughters’ education and marriage. Right now I am investing in the following funds: Mirae Asset India Opportunities – Rs 4,000; HDFC Midcap Opportunities – Rs 2,500; Franklin Bluechip – Rs 5,000; HDFC Prudence – Rs 2,500; HDFC Top 200 – Rs 5,000; Sundaram BNP Paribas Select Midcap – Rs 3,500; DSPBR Top 100 Equity – Rs 1,500; Birla Sunlife Dividend Yield Plus – Rs 1,500 and IDFC Premier Equity – Rs 2,500.

I have taken a term insurance plan for Rs 50 lakh and conventional LIC insurance plans for Rs 13 lakh. I am willing to invest another Rs 2,500. Please let me know if I am on the right track to achieve my goals or if I need to make any changes to my portfolio.

Sundar Building a healthy corpus over a long timeframe has several ingredients to it. The way you have started out on achieving your financial targets is a reasonably sound mode of doing so.

You have given yourself a long timeframe, have defined the corpus that you wish to accumulate and also the specific goals towards which you wish to save. This makes for good financial planning.

We hope that you have allocated sufficient amounts to other asset classes such as debt, gold and real-estate. This is important as in the long term, it is necessary to build a balanced portfolio so that your target is reached without any glitch.

With the Rs 28,000 that you are already investing and the additional Rs 2,500 that you wish to park, you can comfortably reach your goals.

If you invest Rs 30,000 every month for 14 years and the annual returns are 12 per cent, you will accumulate a corpus of Rs 1.3 crore. Withdraw Rs 50 lakh from this amount and you will be left with Rs 80 lakh. You can move the Rs 80 lakh to safer debt instruments such as bank deposits. You will most likely reach the goal of Rs 1 crore with this investment itself. But, continue the SIP from year 14 till the 19{+t}{+h}, so that you comfortably bridge any shortfall.

Increase your term cover to Rs 1 crore.

Coming to your portfolio, you have spread your investments across as many as nine schemes, which creates difficulty in monitoring and also results in too much overlap in fund investments. You have too many large-cap and mid-cap funds. These can be trimmed and made more balanced.

Spread Rs 30,000 as follows: Invest Rs 6,000 each in HDFC Top 200, Quantum Long Term Equity, IDFC Premier Equity and UTI Opportunities. Invest Rs 3,000 each in HDFC Balanced and Birla Sun Life 95.

You can exit the other funds, though most of them have a good track record, as your purpose would be served by the funds that we have suggested.

We have taken a reasonably conservative approach to your portfolio since the timeframe is long and the return expectations are not too demanding.

Review your portfolio periodically and make suitable changes to rebalance it.

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