I am 35 years old, and have invested in funds through the systematic investment plan route. All these are for my long-term investment and retirement. I increase the amounts each year, based on my salary rise. I invest only in equity as the debt portion is covered by my provident fund contributions.

My investments are: Rs 7000 each in Fidelity Equity, HDFC Top200, DSPR Equity; Rs 5000 in Birla Sunlife Frontline Equity, Rs 4000 in DSPBR Top 100. For my daughter's education and marriage, I am investing Rs 3000 each in Quantum Long-term Equity and IDFC premier equity. Please evaluate and let me know if I need to modify the portfolio. I need to have a retirement corpus of Rs 2-3 crore, and hence need to know if the above investments are enough to fund my daughter's college education and her marriage.

— Sameer K. R.

Having a sufficiently long timeframe for your investments to bear fruit is a good idea, especially while investing in mutual funds.

But, there are a couple of details that you haven't mentioned — when you want to retire, your daughter's age, and what you want to accumulate for her marriage.

We assume, conservatively, that you want to retire at 55. If the Rs 24,000 that you invest every month earns 12 per cent annually for 20 years, you will comfortably reach a corpus of Rs 2.4 crore.

Coming to your portfolio, you can continue to invest Rs 7000 each in Fidelity Equity and HDFC Top 200, which have exposure to multi-cap and large-cap stocks. Increase investments in IDFC Premier Equity, a mid-cap fund with a sound performance record, to Rs 5000. For the balance Rs 5000, you can consider HDFC Mid-cap Opportunities or UTI Opportunities, depending on if you want to take an aggressive exposure, or a relatively moderate level of risk. You can exit DSPBR Equity, which has a reasonable record, but will only duplicate your portfolio. Birla Sun Life Frontline Equity and DSPBR Top 100 are large-cap funds with a long performance record, but haven't been the best of performers during the past couple of years. Also, given your investment horizon, you can have a diversified portfolio, instead of sticking to large caps. Apart from mutual funds, you have stated that you have no debt exposure, except your monthly contribution to PF and feel that this would suffice.

A balanced portfolio isn't built with equity alone. You need to have exposure to debt, gold and, with time, real estate.

Typically, as a thumb rule, for a person of your age, the exposure would be 65:25:10 in equity, debt and gold. This ratio alters with age, with reduction in equity, and additions in debt. The interest rate for provident fund is set every year, and can be revised downwards with time.

Apart from employees' provident fund, you should consider alternatives such as public provident fund, a 15-year product that can also be used for your daughter's education, for example.

Highly-rated company deposits and reasonably high-interest-rate fixed deposits of banks prevalent currently are some other avenues that you must consider to park your surplus. From now on, you should consider investments in some other avenues of debt, as your salary increases.

For your daughter, you can continue investments in Quantum Long-term Equity, and consider investing the balance Rs 3000 in HDFC Children's Gift — Investment Plan. The latter has an outstanding performance record during the past 10 years. It allows you to invest in your child's name.

Queries may be e-mailed to >mf@thehindu.co.in , or sent by post to Business Line, 859- 860, Anna Salai, Chennai 600002.

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