Mutual Funds

Your Fund Portfolio

Parvatha Vardhini C | Updated on March 10, 2018

Kindly advise me on the scope of continuing SIP of ₹3,500 a month in UTI Master Share Direct plan (growth option). I started this investment five years ago. I need the money back after another five years only. I can additionally invest ₹1,000 in SIPs for another five to seven years. Should I put this money in the same fund or in other funds of UTI?

Celine George

The UTI Mastershare Direct plan ( growth option) was first introduced on January 2, 2013. Assuming you started your SIPs of ₹3,500 per month then, your investments have earned a return of 15.1 per cent per annum until now.

SIP investments in other peer large-cap funds such as UTI Top 100, DSPBR Top 100 and L&T Largecap — benchmarked to the same BSE 100 index as UTI Mastershare — have fetched returns of 13-16 per cent per annum for the same time period.

Considering that the fund has a good track record and that its performance in the last five years has been on par with peers, you can continue your SIPs here.

Your corpus currently stands at about ₹3 lakh. It is not clear how much you need after five years and for what purpose. Closer to the end of the five-year period from now, if you feel you have attained the corpus you are looking for or have earned good returns, you can probably move the investment to safer debt funds or fixed deposits.

This will help curtail losses arising from market volatility, if any, towards the end of the investment tenure.

As regards the additional ₹1,000, you need not put all your eggs in one basket. Hence, you can choose schemes from fund houses other than UTI.

You have not mentioned your risk appetite. However, your choice of UTI Mastershare shows a moderate risk appetite. You have also mentioned that you have a five to seven-year horizon. Hence, another large-cap oriented fund, Aditya Birla Sun Life Frontline Equity, is suggested.

I am planning to put in ₹10,000 every month for at least 8-10 years to take care of my daughter’s higher education and marriage. I am looking for advice on which funds I should invest in on a SIP basis.

J Srinivas

If you invest ₹10,000 a month and your fund portfolio earns a 12 per cent return, you will have a corpus of ₹16.2-23.2 lakh at the end of 8-10 years. The corpus can be higher if you step up your monthly investments over the years, as your disposable income increases; your funds can also earn higher than the expected 12 per cent return. If you have other investments such as fixed deposits, PPF, etc., these can come in handy to supplement your financial needs for your daughter’s higher education and marriage.

As far as the funds go, you can invest in the following manner: Put in ₹3,000 per month each in SBI Bluechip and Quantum Long-Term Equity. While the former is a large-cap oriented fund that tends to take some exposure to mid-caps to boost returns, the latter is a pure large-cap fund that follows value-based investing.

This combination will provide you the benefit of the complementary investing styles of these funds.

The remaining ₹4,000 can be divided equally between Franklin High Growth Companies and Kotak Select Focus, two multi-cap funds with a good track record. This 60:40 break-up between large-cap and multi-cap funds, respectively, suits a moderate risk appetite.

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Published on December 17, 2017

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