Mutual Funds

Your Fund Portfolio

Parvatha Vardhini C | Updated on January 09, 2018

I am 28, My take-home salary is ₹58,000. Till now I have been investing the maximum eligible amount under 80C only in PPF. Recently, I started investing ₹14,000 each month in mutual funds through SIPs. I put in ₹1,000 each in Aditya Birla Sun Life (ABSL) Small and Midcap, ABSL Pure Value, Canara Robeco Emerging Equities, Franklin Smaller Companies, HDFC Small Cap, Motilal Oswal Focused Multicap 35, Reliance Small Cap and Tata India Consumer Fund. I also invest ₹1,500 in L&T Emerging Businesses, ₹500 in SBI Magnum Equity and ₹4,000 in Mirae Asset Emerging Bluechip.

I can invest up to ₹28,000 per month. I need a corpus of ₹1 crore in 10-12 years. Will my portfolio serve the purpose? Please suggest changes in my portfolio.

From the coming year, I am planning to invest in ELSS MFs instead of PPF. What will be the best funds for this? I will invest ₹11,000 per month in ELSS. If I continue this investment, what amount of corpus can I expect on my retirement (in 2049)?

Sourav Koley

If you invest ₹28,000 per month from now on and this fetches a reasonable 12 per cent compounded annual return, you will have a corpus of ₹65.05 lakh to ₹90.23 lakh in 10-12 years’ time. Over the years, more investments or higher returns could help bridge the gap.

However, it is not clear why you need this huge amount within 10-12 years. If you are looking to save ₹1 crore for buying your own house, you can probably take a loan for the shortfall.

Considering that you are young, investing in ELSS for tax-saving purposes is a good idea. But you need not completely stop investing in PPF which is one of the safest avenues for long-term savings. Divide your Sec 80C savings across ELSS and PPF.

As your surplus increases, you can create a separate portfolio out of diversified equity funds to supplement your retirement savings.

Coming to your SIPs, currently, ₹11,500 out of ₹14,000 or over 80 per cent of your SIPs go into small and mid-cap funds. Mid- and small-cap stocks have had a good run in the last three-four years.

But considering their huge gains and steep valuations, these stocks may correct in the near to medium term. Sector or thematic funds such as Tata Consumer are also risky. You can reduce the risk quotient by holding a portfolio that straddles large-cap, mid, small-cap and multi-cap oriented funds.

Divide ₹28,000 as follows: Invest ₹4,000 each in SBI Magnum Equity, Quantum Long-Term Equity and ICICI Pru Focused Bluechip Equity, three good large-cap funds. ₹3,500 each can be invested in Franklin High Growth, Motilal Oswal Multicap 35 and Kotak Select Focus, three good multi-cap funds. Divide the remaining sum equally between Mirae Emerging Bluechip and ASBSL Pure Value, which are mid-cap oriented funds.

Choose from among Axis Long-Term Equity, DSPBR Tax Saver and L&T Tax Advantage for ELSS investments.

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Published on November 19, 2017

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