Your Fund Portfolio

I am 30 years old and work in an MNC bank. I have been investing in the following funds’ direct plans (growth) through the SIP route: ₹4,000 each in ABSL Focussed Equity, Reliance Large Cap, Mirae Asset India Equity and HDFC Hybrid Equity; ₹5,000 in Quantum Long Term Equity Value; ₹1,500 each in ABSL Tax Relief ’96 and Axis Long Term Equity.

I have a long-term investment horizon with a moderate risk appetite. My goals are: build a retirement corpus of ₹10 crore, 20 years hence; children’s (two) education and wedding; and at least three overseas vacations. I have annual EPF and PPF investments, and an LIC premium that cover the Section 80C requirements.

I have provision for further monthly SIP investment/s of ₹10,000-15,000.

Kindly advise on the effectiveness of my current portfolio towards my goals, and suggest some good funds for further investment.

Aparajitha Niyogi

You currently invest ₹24,000 per month. Assuming you began just now, you will have a corpus of about ₹2.37 crore after 20 years, if your investments earn a compounded annual return of 12 per cent. Even if you invest the additional amount of ₹10,000-15,000, meeting your retirement goal of ₹10 crore in 20 years is a bit of a tall order.

For this, you will need to invest around ₹1 lakh a month. Of course, your investments may earn a return higher than the assumed 12 per cent and you may be able to step up the SIPs as your income increases. But since you also have other goals such as children’s education and travel that need to be met simultaneously, it may still not be easy to achieve the ₹10-crore target.

You need to do a rethink on exactly how much you need and in how many years, for each of the goals you have specified. You can take the help of online SIP/target-value calculators to arrive at more realistic goals, balancing both your future requirements and your savings capacity. Ideally, you should create separate portfolios for each of the goals.

Coming to the funds, all those that you currently invest in have good long-term track records. You can continue all your SIPs. For the new SIPS, invest ₹5,000 each in SBI Bluechip, Kotak Standard Multicap and HDFC Mid-Cap Opportunities.

Of the ₹39,000 that you will be investing in all, you will have an allocation of ₹9,000 each in large- and multi-cap funds, ₹5,000 each in value and mid-cap funds, ₹4,000 each in focussed equity and hybrid equity funds, and ₹3,000 in tax-savings funds.

With minimal exposure to higher-risk mid- and small-cap funds, this allocation suits a moderate risk appetite.

Remember to periodically monitor the performance of your funds and take corrective action by changing funds, if necessary.

Send your queries to mf@thehindu.co.in

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