I am 45 years old. I am investing Rs 1,000 per month in HDFC Hybrid Equity, Aditya Birla Sun Life Frontline Equity; Rs 1,500 each in Mirae Asset big hat, Mirae Asset Emerging Bluechip; Rs 2,000 in SBI Bluechip; 2,500 through SIP for the last three years in Motilal Oswal Nasdaq 100 Fund of Fund. A month ago, I had invested Rs 47,400 in a 10-year sovereign gold bond. I have also started investing Rs 500 per month in DSP World Gold Fund. I have EPF/VPF corpus of Rs.1.25 crores. I earn 1 lakh rupees a month. I aim to accumulate Rs 50 lakh in five years through my mutual fund investments. Is my investment on the right track?
Praleen Bajpai Founder Finfix® Research & Analytics replies: Your target of Rs 50 lakh is very tough. your monthly Investment 10,000 and a realistic expected return of 10% CAGR would generate a corpus of around Rs 15 lakh over the next five years. To reach the target, your monthly investment needs to increase substantially (around Rs 40,000 per month). Depending on the purpose of the goal, review whether it can be extended to allow more time to plan better or, alternatively, consider resetting it. You have three largecap funds in your portfolio, which results in duplication rather than diversification. Continue with one of them and increase the allocation towards it. You have invested in Sovereign Gold Bonds, which is the equivalent of buying physical gold in electronic form. However, note that DSP World Gold Fund does not track the price of gold. The fund invests in companies that are engaged in gold mining, and hence its movement depends on the share price of those companies. EPF/VPF offers linear compounding and is a very good investment. However, based on the available information, your asset allocation is skewed towards fixed income. Re-evaluate all your financial goals and change your current asset allocation accordingly.
My 62 year old husband will be retiring soon. He will not get any gratuity or PF but has invested Rs 43 lakh in PPF; Around Rs 50 lakh in shares, Rs 6 lakh in mutual funds, apart from Rs 35 lakh in PMYY, SCSS, life insurance policies and bank deposits. He wants to do another job and out of the money he will earn, he wants to invest around Rs 1 lakh per month for 1-3 years. He wants to invest in large-cap, hybrid and Balanced profit fund. We need to protect the capital. Can you please suggest some good funds?
Dev Ashish, Founder, Stable Investor and SEBI-registered investment advisor, answers: The key phrase in your query is capital preservation. If that is the case, then whatever large-cap, hybrid and balanced advantage funds your spouse decides to choose from, they will have a large equity component and, therefore, will not be suitable for pure capital protection. That said, it looks like there are already some solid loan products in the portfolio like PPF, PMVVY, SCSS and bank deposits. I think if your husband wants to invest in mutual funds, he is willing to stay invested for at least five years or more. Also, it is assumed that you will not be dependent on these funds for regular monthly expenses. With these assumptions and with the overarching objective of capital conservation and proper growth for a balanced portfolio, he/she can invest 30% in Large Cap and Flexicap Funds, 40% in Debt Funds and 30% in Aggressive Hybrid and/or Balanced Advantage Funds. can consider. . Choose only one scheme from each fund category: Invest Rs 15,000 in Nifty 50 Index Fund (UTI/HDFC/SBI); Rs 15,000 in Flexi-Cap Fund (PPFAS/Canara Robeco); 10,000 in an aggressive hybrid fund (Miray/Canara Robeco/ICICI Pru); Rs 20,000 in Dynamic Asset Allocation Fund (HDFC/Edelweiss/ICICI Pru); Rs 20,000 in Short Term Fund (ICICI Pru/Axis) and Rs 20,000 in Short Term Debt Fund (HDFC/Kotak). Before choosing these funds, check the portfolio overlap with your existing mutual funds. Another possible option could be NPS Tier 2 account which does not have restrictions like Tier 1 accounts.