Mutual Funds

Your fund portfolio

Parvatha Vardhini C | Updated on January 23, 2018 Published on May 17, 2015

I am 30 years old and have been investing in mutual funds through the systematic investment plan (SIP) mode for the last four years.

Currently, I am investing ₹1,000 each in the following schemes — ICICI Pru Tax Plan, Axis Long Term Equity, BNP Paribas Long Term Equity, Reliance Tax Saver and SBI Magnum Global.

I now wish to start an investment of ₹2,000 a month.

Please review my portfolio and suggest schemes for additional investment.

Rohit Modh

At your age, allocating a portion of your tax-saving investments to ELSS (equity-linked savings scheme) funds is recommended, as equity can fetch much higher returns than other debt options.

But investing predominantly in tax-saving funds alone is not the right way to build your mutual fund portfolio. Also, SIPs in ELSS funds mean that every instalment is locked for three years.

It is enough if you have a maximum of two ELSS funds. Invest ₹1,000 each in Axis Long-Term Equity and Reliance Tax Saver, two top performers.

While the former predominantly invests in large-caps, the latter is largely into mid- and small-caps.

If you want to save more to reduce your tax outflow, open a PPF account. With tax breaks on initial investment and tax-free interest and maturity payments, it is one of the few debt instruments offering competitive returns.

Of the remaining ₹5,000, invest ₹3,000 in ICICI Prudential Focused Bluechip, a top diversified equity fund.

The remaining ₹2,000 can be invested in Canara Robeco Emerging Equities, a mid-cap fund. This fund has a better track record than SBI Magnum Global.

I joined a PSU about six months ago and earn ₹30,000 a month. I have savings in fixed deposits to the tune of ₹1 lakh.

I would like to start investing in mutual funds for the long term.

Kindly suggest good funds for a beginner.

Kalyan Chakrabarty

It is good that you are saving for the long term early in your career. You have not stated your monthly surplus. Assuming that you can set aside about 10 per cent of your earnings, i.e. ₹3,000, you can invest ₹1,500 each in UTI Equity and BNP Paribas Equity.

These funds invest predominantly in large-cap stocks, which is ideal for a beginner. You can add more funds as your surplus increases.

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Published on May 17, 2015
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