Mutual Funds

Your Fund Portfolio

K Venkatasubramanian | Updated on January 24, 2018


I am 23 and single. Recently, I got placed in a top regulatory body. My package is around ₹3 lakh annually. Please suggest investment options for me.

Shameer

Congrats for getting placed. It is also commendable that you are thinking about investing immediately after securing your job, while the tendency is generally to blow up savings early in one’s career.

Since you are just about to begin investing, start with some low-risk balanced schemes or large-cap funds. Invest, say, ₹2,500 each in Tata Balanced and UTI Equity. Try to also invest in debt avenues, such as PPF. Make your investments with a longer period of at least five-seven years in mind.

As you get more comfortable with investing in mutual funds and as your surplus increases, add more schemes. Take a term cover and a medical insurance policy as early

I am 36 and work for a Government department. I earn a salary of ₹45,000. My wife is also employed and draws a salary of ₹35,000. I have been investing in mutual funds through the SIP route for the past four years.

I have invested ₹2,000 each in HDFC Equity and HDFC Top 200 and ₹3,000 each in SBI Emerging Businesses, UTI Opportunities, DSPBR Top 100, HDFC Mid Cap Opportunities and HDFC Prudence. I wish to stay invested for the long term till my retirement. Please review my investments.

Shalabh Dubey

It is good that you are putting away a good sum of money every month into mutual funds, and also have a very long-term investment horizon.

But your portfolio lacks focus and you have spread investments across seven schemes, which may not be necessary. You should also not invest in too many schemes from the same fund house as it will deny you the opportunity to benefit from different styles. Spread ₹19,000 as follows:

HDFC Equity and HDFC Top 200 have considerable portfolio overlap. Hence invest ₹4,000 in HDFC Equity and stop further investments in HDFC Top 200. Park ₹4,000 each in UTI Opportunities and Franklin India Flexicap. The former is predominantly a large-cap fund, while the latter is a quality multi-cap scheme. Invest ₹3,500 each in ICICI Pru Value Discovery and HDFC Mid-cap Opportunities.

These are mid-cap funds which have delivered well over the long term.

Exit DSPBR Top 100 and SBI Emerging Businesses as these have lagged top peers over the past few years. Since you are investing for the very long term, a balanced scheme such as HDFC Prudence may not be necessary. Review the schemes in your portfolio to take corrective action and to rebalance. Over the long term, you must also invest in debt, gold and real-estate to have a balanced portfolio.

Have a target corpus in mind. If you reach the amount ahead of time, exit units and move to safer debt avenues.

I am 53 and wish to invest ₹2,000 each in five schemes through the SIP route for a period of five years.

Please suggest suitable schemes.

S Muthukumarasamy

Since you are just a few years away from retirement, you must have a portfolio of relatively low-risk funds.

It is assumed that you are investing a sum that you will not need over the next few years and have other avenues that would cater to your retirement income.

Now, given your age and time horizon of five years, large-cap and balanced funds would suit you. For ₹10,000, four schemes would suffice as you would get adequate diversification within these.

Invest ₹3,000 each in ICICI Pru Focused Bluechip and Franklin India Prima Plus. These are predominantly large-cap oriented with proven track record across market cycles.

Park ₹2,000 each in HDFC Balanced and Tata Balanced. Review the schemes mentioned here once every year and carry out necessary modifications in case of prolonged underperformance.

Published on March 15, 2015

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