Mutual Funds

Your Fund Portfolio

Parvatha Vardhini C | Updated on September 02, 2018 Published on September 02, 2018

I am 33 years old and have been investing in the following mutual funds through SIPs for the past two years: ₹2,000 each in Sundaram Mid Cap - Growth and Reliance Multi Cap, and ₹1,000 in Quantum Long Term Equity Value - Growth. Should I continue these SIPs? I want to invest another ₹10,000 per month in MFs through SIPs. My goal is to save for my retirement. Please suggest some good funds.

SPR Kumar

It is good that you have started saving early in your working life towards long-term goals such as retirement. Investments in equity mutual funds have the capacity to give inflation-beating returns over the long term. To just give you an idea, if you put ₹15,000 every month (your current SIPs amounting to ₹5,000, plus the ₹10,000), and your investments earn a compounded annual return of 12 per cent, you will have a corpus of about ₹3.6 crore at the end of 27 years from today, when you turn 60. You can make the corpus larger by adding periodically to your SIPs as and when your income increases over the years. Also, the amount you have already been investing in the past two years will come in handy.

Coming to your portfolio, some of your existing funds such as Sundaram Mid Cap and Reliance Multi Cap can be replaced, as these funds have been middle-of-the-road performers in their respective categories over longer time-frames of three and five years. Break down you portfolio as follows: Invest ₹4,000 each in Axis Bluechip and Quantum Long Term Equity, two large-cap-oriented funds. Put ₹3,500 into Kotak Standard Multicap (earlier, Kotak Select Focus), a multi-cap fund with a good long-term track record. The remaining ₹3,500 can be invested in L&T Midcap.

This allocation ensures that your investment is divided suitably between relatively less-risky large-cap schemes and more-risky multi/mid-cap funds. It suits someone with a moderate risk appetite. Remember to review your portfolio periodically and replace underperformers.

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