Your fund portfolio

I am 36 years old and have been investing in the following funds through monthly SIPs (direct) towards my retirement fund: Mirae Asset India Equity - ₹5,000, Kotak Standard Multicap - ₹10,000, Invesco Mutual Contra - ₹11,000, and SBI Mutual Small Cap - ₹12,000. I also have two SIPs which are set to end in a month: Mirae Asset Emerging Bluechip - ₹10,000, ICICI Prudential Discovery - ₹10,000. Could you please provide your input on my on-going SIPs and recommend additional SIPsto invest an additional ₹12,000/month in?

Harish

It is good to note that you are investing fairly large sums for your retirement. You have also chosen a set of quality funds for your goal, that too through lower-cost direct plans. It is assumed that you are also investing in debt avenues such as EPF and PPF. Try to also diversify into gold and real estate (for own living). The idea is to create a balanced portfolio so that you reach your goal comfortably.

Coming to your holdings, you can change the allocation to individual schemes and also add a couple of funds to your portfolio.

Together with the additional ₹12,000, you will have ₹70,000 to invest every month.

Split it as follows: ₹9,000 each in all the four funds where you have been investing and the two schemes where SIPs are set to end. These funds span a range of capitalisations and value-oriented themes, thus ensuring a well-diversified portfolio. You will have ₹16,000 as balance after these investments.

Invest ₹8,000 each in Axis Bluechip and Parag Parikh Long Term Equity.

Review the schemes in your portfolio once every year and take corrective action, including rebalancing or getting rid of consistent under-performers.

Move to safe debt avenues if you reach your target ahead of time.

I am a recently retired bank employee and have deposited my terminal benefits in bank deposits. From the monthly interest that I get, I have just started the following investments through the SIP route to the tune of ₹3,000 each: Sundaram Mid Cap, Sundaram Rural and Consumption, ABSL Equity Advantage, ABSL Pure Value, HDFC Mid-Cap Opportunities, and HDFC Hybrid Equity. The aim is to utilise the interest income to build a corpus over a period of 5-7 years. Please give your opinion on the above funds and if the investment in these schemes will would help me reach my goal. Also, suggest a good tax-saving fund.

SP Rajkumar

After retirement, the safety of the accumulated terminal benefits should take precedence over chasing higher returns.

You have not stated if you receive a pension, and so we assume that you are predominantly dependent on interest income for your expenses. We also assume that these MF investments represent the amount that you would not need at least for the next five years.

Investing in mid-cap and theme funds considerably increases the risk profile of your portfolio. You have not stated the purpose of the corpus that you wish to accumulate. Even so, given your age and the time horizon for the goal, it would be better to opt for large-cap and hybrid funds. Although many funds in your portfolio have strong performance track records over the long term, they may not suit your risk profile.

Therefore, retain HDFC Hybrid Equity alone. You can add ICICI Prudential Equity & Debt, and Axis Bluechip — a hybrid fund and a large-cap scheme, respectively — to your portfolio. You can invest ₹6,000 in each of them.

For tax-saving purposes, you can consider Aditya Birla SL Tax Relief 96. Note that each instalment is locked for three years in the case of tax mutual funds.

Keep in mind that apart from bank deposits, you must exhaust safe avenues for steady incomes, such as the Post Office Senior Citizen Savings Scheme and the PM Vaya Vandana Yojana, and must take risks only on any surplus that becomes available after your monthly expenses.

Send your queries to mf@thehindu.co.in

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