Mutual Funds

Your Fund Portfolio

Parvatha Vardhini C | Updated on January 20, 2018


I am 65 and don’t have any specific goals. I have investments (growth option) in the following funds: Tata Balanced - ₹1 lakh; HDFC Balanced - ₹35,000; ICICI Pru Value Discovery - ₹40,000; Franklin Prima Plus – ₹30,000 and Franklin India Smaller companies - ₹25,000;

I want to invest another ₹4 lakh. Please give your comments on the choices and let me know where to invest the remaining sum.

P Anandam

The funds you have chosen are all seasoned performers. You have also balanced out your investments well by allocating about 70 per cent of your corpus to less risky large-cap oriented (Franklin Prima Plus) and balanced funds (Tata and HDFC Balanced). You can continue holding these funds.

Since you already have a mutual fund portfolio and don’t have any specific goals, you need not unduly risk your capital by investing another ₹4 lakh in mutual funds.

It is best to put this sum in the Post office Senior Citizen Savings Scheme, which offers an attractive 9.3 per cent return right now. Regular payout of interest from this scheme will also help supplement your routine expenses. If you want to spread your investments, you can also invest in tax-free bonds or corporate fixed deposits with high credit ratings which offer better interest rates than bank deposits.

I am 41, and earn ₹43,000 per month. My investments include PPF of ₹4,000 per month, a recurring deposit of ₹2,000 per month and investment to the extent of ₹6 lakh in corporate fixed deposits.

I have been investing through monthly SIPs in the following funds for the last one year: Axis Tax Saver - ₹3,000, Tata Balanced - ₹2,000, Franklin Prima Plus - ₹5,000, UTI Equity - ₹5000 and ICICI Pru Value Discovery - ₹3,000. I need a corpus of ₹20 lakh after 8 years and another ₹20 lakh after 15 years. Should I continue these SIPs or change the schemes?

Sujatha Sunil

To get a corpus of ₹20 lakh after eight years, assuming your investments can earn a reasonable 12 per cent compounded annual return, you will need to do monthly SIPs of about ₹12,500.

To accumulate another ₹20 lakh in fifteen years’ time, you will need a monthly SIP of ₹4,000 per month, keeping the expected rate of return at the same 12 per cent. In all, as against the ₹16,500 per month required for both the goals, you are currently investing ₹18,000.

You also have additional savings in debt instruments to fall back on. All funds that you have chosen have a good track record. You can continue investing in the same. However, since you have a long horizon, review their performance every three years or so and make changes to the portfolio if necessary.

Besides, as your earnings improve, you can also allocate more sums towards savings in both debt and equity.

The value of ₹20 lakh several years down the line may not be the same as it is today and the additional investments can come in handy in case there is a shortfall. Else, it can also help create a corpus towards your retirement.

I am 27. I have SIPs of ₹10,000 in HDFC Midcap Opportunities, ₹5,000 in HDFC Top 200, ₹5,000 in Reliance Pharma and ₹9,000 in recurring deposits. I have a high risk appetite. My investment horizon is five years and I plan to use the corpus towards funding a home purchase after that. Am I on the right track or should I reshuffle my portfolio?



Tanstan Venald

Since you have a high risk appetite, you can perhaps cut down on your recurring deposit investments and direct another ₹5,000 towards Franklin High Growth Companies, a multi-cap fund with a good track record. SBI Pharma, being a thematic fund, suits your penchant for risk.

Although SBI Pharma has a good 5-year and 10-year track record, remember that theme funds may be prone to prolonged spells of outperformance and under performance. Since we cannot second guess when the tide will turn against us, it is best to have a target return for thematic funds and exit.

Published on March 13, 2016

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