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  • Investment advice required on portfolio

    Planning to invest in mutual funds? Searching for financial advice regarding the investment and how to enhance the portfolio in the coming ten year? Our ISC experts shall provide you with advice regarding how much to invest and where.

    I have SIP of 18000 per month, and the details are as follows:-

    S. No Mutual Fund Scheme SIP

    1 Axis long term equity growth (Regular) 4,500.00 ? Discontinued after 12 SIP
    2 Tata india tax saving growth (Regular)- 4,000.00 ?
    3 Dsp blackrock micro cap growth (Regular)- 1,500.00 ?
    4 Dsp blackrock focus 25 growth (Regular)- 1,500.00 ?
    5 Franklin india prima growth (Regular) 1,500.00 ?
    6 L&t emerging businesses growth (Regular) 2,000.00 ?
    7 Mirae asset emerging bluechip growth (Direct 1,500.00 ?
    8 Tata equity p/e fund growth (Regular) 1,500.00 ?
    9 Mirae Tax Saver (Direct) 4,500.00 ?

    TOTAL SIP 22,500.00 ?

    My lumpsum investments are:-

    S. No Mutual Fund Scheme SIP

    1 Bnp paribas balanced fund growth 10,000.00 ?
    2 Dsp black rock tax saver 50,000.00 ?
    3 Reliance tax saver growth 50,000.00 ?
    4 Sundaram select micro cap sr 16 growth 10,000.00 ?

    TOTAL LUMPSUM 120,000.00 ?

    I also have a Term Plan for Rs. One Crore

    I want to know how is my portfolio and how much I can expect after 10 years or if there is any requirement for any change,can you guide?
  • Answers

    5 Answers found.
  • 1. You have not indicated your age, your income and your medium-term and long-term goals. In absence of this information, proper advice regarding your portfolio can't be given. So, I am only making some general comments.
    2. You have invested in two ELSS funds. Check their performance and invested in only one.
    3. You have invested in small-cap funds. Shift this investment to a good equity-based hybrid fund and invest in that fund through SIP mode.
    4. Don't invest in micro-cap fund as indicated in your question.
    5. Don't invest in so many funds. Instead, consider investing in NPS which will give you a pension after your retirement and give additional tax-saving at the time of your earning.
    6. Don't ignore the Provident Fund. Invest a substantial amount in GPF or PPF every month. It will help you in tax-saving, fixed rate of return as interest and the PPF corpus can't be attached by any Court in case of any legal dispute (God forbid).
    7. You need to have investment discipline. Instead of investing a lump sum, try to invest regularly in every month. In case of mutual fund schemes, investment through SIP.

    "Wo pursish-e-gham ko ayae hain kuch keh na sakoon chup reh na sakoon,
    khaamosh rahoon to mushkil hai keh doon to shikaayat hoti hai"-----Saba Afghani

  • Investment is a dynamic process and one has to align it as per one's age group and family responsibility.

    As a thumb rule the young persons can go for a larger investment in equities and less in debt related investments, the middle age group people can reduce the exposure in equities and increase in others like bank FDs, PPF, Post Office schemes etc and the retired or upper age group people refrain from high risk investments like equities and equity linked mutual funds.

    With that background in mind let us come to now understand the investment in mutual funds.

    Basically mutual funds are of three types one which are investing heavily in equities, second which are investing in equities and debts in a balance way and third which are primarily investing in debts.

    The return on these three schemes is diffrent and is affected by the market conditions.

    Today, there are so many types of funds devised by the fund houses that it becomes difficult to take a prudent decision as to invest where.

    So there are some basic considerations which are to be followed.

    First point is do not invest all the money in equity oriented mutual funds as they are high risk areas. Divide it in at least 60:40 proportion that is 60% investment in equity oriented and 40% in balanced funds. I am not advising to invest in pure debt funds because that return you very well can achieve in bank and post office deposits which are highly secure.

    Second thing is check the portfolio of your scheme in the various financial sites in the internet and see which are the companies where the mutual funds have invested. If a mutual fund has bought only blue chip top companies shares then it is natural that it will have a magnificent performance.

    Many funds invest in emerging companies or new companies but that is risky as we do not know whether those companies will be successful in long run or not.

    Third thing is invest through SIP path rather then the one time investment. SIP helps in smoothing our returns and protects us from market fluctuations. One time investment is for shrewd investors who can time the market.

    One of the most important thing that we should keep in mind while taking decisions in equity or mutual fund investments that there are so many factors which affect return in these investments that time to time our decisions will change and we will be swapping our investments from one scheme to other.

    I will advise not to do that and try to consolidate your investment in a few good schemes which you can make out after seeing their portfolio only.

    My advise will be go for 2 equity schemes, 1 ELSS scheme and 3 balanced schemes, a total of 6 schemes and then monitor them closely.

    The last thing I want to tell is that mutual funds generally invest sector wise and their portfolio will be more and less aligned to different sectors like financial companies, FMCGs, pharmaceuticals, IT etc and depending on the growth of those sectors the mutual fund performance will be reflected.

    So do not seek quick advices from here and there but consider these factors and invest judiciously and cautiously.

    Knowledge is power.

  • One should invest his investible funds in mutual fund depending on the total corpus available and the future requirements.

    It is not advisable to put all money in mutual funds. That is a risky thing as mutual funds invest in share market only and that is a high risk area. So, I will suggest that only 20-30% of the total should be invested in mutual funds. Rest of the money should be deposited in bank FDs, Sukanya Yojana, PPF, NSc, KVP, recurring deposits, FMP etc.

    Mutual funds are less riskier than equity and especially the balanced funds are better as they compensate the risks between equity and debt instruments.

    I will suggest that one should confine oneself in the schemes where the mutual fund has invested in the equities of top companies like Colgate, L & T, Hindustan Lever, Cipla, Infosys, TCS, Britannia, Reliance, ABB, ACC, Dr Reddy Lab etc. The reason is these companies are doing very good and the mutual funds which invest in the equity of these companies will also do good.

    Thoughts exchanged is knowledge gained.

  • Unless otherwise the age of the investor is known it is difficult to decide on the best portfolio.
    Mutual funds are classified into stocks, bond and cash If we know how the mutual funda are categorized we can choose the best funds.
    Before choosing funds one should know risk tolerance level. The risk is a measure of the level of changes or market risk to what extent one can tolerate
    If you are just getting started investing with mutual funds, or if you get highly anxious when your fund value comes down by 10% your risk tolerance is relatively low. So you should not go for high-risk investments. You should go with a balanced or "hybrid" fund.
    If you're a bit more experienced in investing and if you have a bit of money to play around an aggressive approach might be good.
    Once the level of risk tolerance is known, proper asset allocation can be made.
    No-load funds are the best choice for mutual fund investors.
    Choosing from a broad selection of mutual funds begin by comparing performance to a benchmark. Consider other important qualities of mutual funds, such as fund fees and expenses and manager tenure. Most importantly you should choose a diverse selection of funds which combine to suit your risk tolerance and aims of investment.
    Past performance of a mutual fund may be a simple guideline and too much depending on that factor is also not a correct way.
    To build the best mutual funds portfolio follow "Don't put all your eggs in one basket." A simple combination of mutual funds that works well for your needs will be the best solution.
    You can decide on the best possible balanced investment by following 50% investment in equity funds and 50% in balanced funds. It will be best way of investing.

    always confident

  • SIP'S
    a) You currently have 2 tax savers while 1 has been stopped, having two leads to over lapping of stock selection which hampers your over all returns
    b) DSP Blackrock Focus 25 is a focused scheme, meaning the experience to have overseen varying market cycles with restrictions to stock picking is all the more important, you should review this selection.
    c) You have 2 small caps, trim it to one and also make sure you are diversifying among AMC's too and not just schemes.
    d) 35 % of your portfolio is into pure aggressive schemes and I have not included the large & mid cap scheme(Mirae emerging) in my calculation which requires a 35 % minimum investment into mid caps by SEBI mandate.

    Lump Sums
    1) Sundaram select micro cap is a close ended small cap scheme. Why go with close ended schemes when there are proven open ended small cap schemes and when you already have ELSS which has a lock in period of 3 years? Also with small caps, it is advisable to take the STP route rather than lump sum
    2) Stick with one one Tax saving scheme
    3) BNP Balanced fund is an hybrid aggressive scheme that was only launched in March 2017, one looks for partial growth with stability expectations when one allocates funds to an Hybrid Aggressive scheme, why not go for one that has seen market cycles ?

    You have not mentioned your age, goals, time horizon, whether you have factored for inflation, any emergency corpus etc. Your portfolio should be preceded by a risk assessment and later aligned with your goals, equity investing without a risk assessment is akin to driving without a seat belt on.

    Hope that helps, good luck

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