Mutual Funds

Your Fund Portfolio

K Venkatasubramanian | Updated on January 24, 2018


I am 51 and employed with a public sector undertaking. I intend to invest ₹5,000 a month in two mutual fund schemes through the SIP (systematic investment plan) route for seven years. This investment is for my retirement. In addition, I have savings spread over other instruments. Should I review the investments after two-three years or continue with the same schemes for the next seven years?

B Ganesh Nayak

Since the investment you propose to make is for your retirement, safety must be the primary consideration. A portfolio of large-caps may be suitable for you. Invest ₹2,500 each in UTI Equity and ICICI Pru Top 100. These two large-cap schemes have been proven performers over the past four years.

It would be very hard to say if the same schemes can be continued with for a period of seven years. You must take stock of the performance of your funds once every year. If there is prolonged underperformance compared with the benchmark and peers, exit such a scheme and choose another proven performer instead.

I have been investing ₹20,000 every month in HDFC Midcap Opportunities through SIPs. I can invest another ₹30,000 every month. Please suggest funds where I can invest this additional sum. I wish to accumulate ₹1 crore in seven years.

Tamal Banerjee

You are investing a fairly large sum in a single scheme. Ideally, you must spread your investment over funds across asset management companies so that you benefit from the styles of different managers.

Saving ₹1 crore in seven years, with ₹50,000 monthly investment, may be pretty challenging as you will need to generate 22 per cent returns annually. With a reasonable 15 per cent annual return, you can achieve your target of ₹1 crore in 8.5 years. So, you will need to postpone your target by about 1.5 years.

Spread ₹50,000 as follows: Invest ₹8,000 each in Birla Sun Life Top 100, HDFC Equity and Axis Equity. These are predominantly large-cap funds which also invest a small portion in mid-caps as well. Park ₹7,000 each in Franklin India Flexicap and Mirae Asset India Opportunities. These are multi-cap schemes with proven record. Invest ₹6,000 each in ICICI Pru Value Discovery and Canara Robeco Emerging Equities, which are quality mid-cap names. You would have a blend of funds across market caps. Review the schemes in your portfolio regularly and take corrective action as and when required. If you reach your target corpus ahead of time, book profits or sell units and move the proceeds to safe debt avenues. We hope you have also made sufficient investments in debt instruments.

I am 24 and have just landed a job with a public sector bank. I want to invest ₹10,000 a month for five years in mutual funds through the SIP route. Kindly suggest mutual funds that are likely to do well over the next five years.

Arun Negi

Going for systematic investments immediately after starting your career is a good move. It would be easier to design a portfolio if you can save for specific long-term goals. A longer horizon of 7-10 years will allow you to invest in funds that invest across market caps. It will also lower the risk of underperformance.

As you would be investing for five years, a large-cap portfolio would be suitable. Invest ₹3,000 each in Axis Equity and UTI Equity. These are proven large-cap names. Invest ₹2,000 each in Birla Sun Life Top 100 and Mirae Asset India Opportunities. These two schemes invest mostly in large-caps as well as select quality mid-cap stocks. If you can take a bit more risk, you can invest in ICICI Pru Value Discovery, a quality mid-cap fund, instead of Birla Sun Life Top 100. Review the performance of the schemes every year and take corrective action, when needed.

Published on January 11, 2015

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