Mutual Funds

Your Fund Portfolio

Parvatha Vardhini C | Updated on March 10, 2018


I am 29 and I am currently saving ₹40,000 per month outside of my PF contribution. My portfolio consists of two SIPs (growth option) — ₹10,000 in Birla Sun Life Top 100 and ₹5,000 in SBI Magnum Midcap.

I am also investing ₹25,000 in a recurring deposit (RD) every month. I want to start one more SIP of ₹15,000 and reduce the RD contribution to ₹10,000. Please suggest a suitable investment plan over 10-15 years. I want a corpus of ₹1 crore after 15 years.

Arnab Chakraborty

Assuming your equity investments earn a return of 12 per cent annually, you will be able to build a corpus of ₹1 crore after 15 years if you invest around ₹20,000 every month. While you are currently investing only ₹15,000 per month in SIPs, the additional ₹15,000 that you are willing to spare will take you home comfortably.

As far as the funds go, you can continue with Birla Sun Life Top 100 and SBI Magnum Midcap as these funds have good track records. Overall, for the ₹30,000 that you will be investing a month through SIPs from now on, invest as follows: Put in ₹4,500 each in Birla Sun Life Top 100, Quantum Long-Term Equity, Reliance Top 200 and Mirae Asset India Opportunities. These are dependable large-cap-oriented funds.

Invest ₹3,000 each in Franklin High Growth Companies and ICICI Pru Value Discovery, which are solid multi-cap funds. The remaining ₹6,000 can again be equally divided between SBI Magnum Midcap and L&T Midcap. This will leave you with an allocation of 60 per cent of your corpus in large-cap-oriented funds and 20 per cent each in multi-cap and mid-cap funds. This allocation suits a moderate risk appetite.

With regard to your recurring deposit investment, it is good that you have decided to cut down contributions here. Considering your young age and long-term investment horizon, you can take higher risk for higher returns by investing more in equities.

The fact that you are willing to spare ₹40,000 a month for long-term savings is appreciable. But make sure you have some surplus funds for emergencies/contingencies after making these investments and meeting your routine expenses.

I am 34 and work in the private sector. I am presently investing in the following mutual funds through SIP mode: Franklin High Growth Companies – ₹2,000, Franklin Smaller Companies – ₹2,000, ICICI Pru Focused Bluechip – ₹3,500, ICICI Prudential Value Discovery – ₹3,500 and Birla Sun Life Equity – ₹2,500. I can invest ₹4,000 more per month. I have shortlisted Franklin Prima and UTI Midcap. Kindly advise regarding my existing portfolio. Should I go ahead with my new choices?

Satish Nayak

All the funds you have chosen are reasonably good performers. Nevertheless, here are a few observations about your portfolio. For a total sum of ₹17,500, (including the additional ₹4,000 you want to invest) you can probably do with fewer funds. Secondly, barring ICICI Pru Focused Bluechip, all your choices seem to be mid-cap or multi-cap funds. This suggests a high risk appetite. If you don’t have any near-term needs for the money and are saving only for long-term goals, you can perhaps allocate more to large-cap funds to bring down the risk quotient. Third, you have chosen three Franklin funds and two ICICI funds. While they are good performers, you can probably do with some diversification to avoid putting all your eggs in one basket.

Rejig your portfolio as follows: Invest ₹4,500 each in ICICI Pru Focused Bluechip and Birla Sun Life Frontline Equity (switch from Birla Sun Life Equity), which are large-cap-oriented funds.

Divide the remaining ₹8,500 equally between Franklin High Growth Companies (multi-cap) and UTI Midcap.

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Published on April 16, 2017

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