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I am 43. I have been investing ₹4,000 per month each in Birla Frontline Equity, Franklin High Growth, Franklin Smaller Companies, ICICI Pru Focussed Bluechip and ICICI Pru Value Discovery since one year. I invest about ₹3,000 in gold exchange traded funds (ETFs) too.
Besides, I have invested ₹2 lakh in Franklin India Pension Fund.
I have investments in Public Provident Fund (PPF), Employees’ Provident Fund (EPF) as well.
My goal is to accumulate cash for retirement purpose. I can take medium risks. Please advise if I am on the right track.
Raghuraman K
It is good to note that you are diversifying across asset classes such as debt, equity and gold towards saving for your retirement.
Regarding your equity investments, there are two observations: One, though you have chosen some of the best performing funds for your portfolio, you can do with some diversification across fund houses.
This will help you benefit from the different investment styles followed by different fund houses.
Second, considering your age and your medium risk appetite, you can perhaps consider investing more in large-cap oriented funds than pure mid and small-cap funds.
Split the ₹20,000 you are investing as follows: For your core portfolio, invest ₹5,000 each in Mirae Asset India Opportunities and Birla Sun Life Frontline Equity, two large-cap oriented funds.
While both Franklin High Growth and Franklin Smaller Companies are chart busters, they are slightly more aggressive funds.
If you don’t have a high risk appetite, you can switch to Franklin Flexi-cap and invest ₹4,000 there. This is also a multi-cap fund like Franklin High Growth, but is comparatively less aggressive and scores well on returns.
The remaining ₹6,000 can be equally split between ICICI Pru Value Discovery and BNP Paribas Midcap.
Franklin Pension Plan is a good choice among pension funds and you can retain your investments in this fund.
It is not clear which gold fund you are investing in. But considering the downtrend in gold prices, all ETFs sport negative returns over one and three-year periods.
If you have a long-term horizon, you can invest in gold ETF for diversification purposes.
Ideally, you can restrict gold to 10 per cent of your total portfolio.
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