Monthly investments are Rs.5,000 in PPF, Rs.1,000 each in ICICI Focussed Bluechip, SBI Bluechip, HDFC Midcap and HDFC Balanced Funds. I have optimum insurance. My goals are child marriage and education for that I need 50 Lakhs after 15 to 20 years. Want to accumulate 5lacs after 6 years for sister marriage.
Sandy-First thing, try to retain one fund between ICICI or SBI. Second thing, if we consider the expected return as 12% and tenure as 15 years, then it is insufficient to accumulate of Rs.50 lakh. You have to double your investment to achieve the goal by 15 years from now.
Regarding your sister’s marriage after 6 years, I suggest you not to invest in equity oriented mutual funds. You can use either Bank RDs, FDs, Short Term Debt Funds or Arbitrage Funds. Maximum you can use is debt oriented balanced funds where equity exposure is slightly there. But personally I say NO to any equity.
Which one to retain icici prudential or sbi blue chip.out of these to funds one fund I want keep for retirement after 30 years.suggest
Sandy-To me both are good, retain anyone.
I want to keep one fund for child education for 15 years n other for retirement. After 30 years
Either create a PORTOLIO separately for each goal or else a single porfolio for all goals. But don’t invest in a single fund for particular goal.
Hi Basavaraj,I have a doubt here. Does one can to opt for a same kind of portfolio for 2 different goals (say for example- one large, one mid, one balanced fund for each goal)?If yes, then doesn’t it mean overlapping? If no, then please advise on how one can go ahead with both goals.
Mahesh-Let us say number one goal need Rs.10,000 of equity investment and second goal also Rs.5,000 per month. Combining all these will make you Rs.15,000 of monthly investment in equity. For this you have to select one large cap, one small and mid cap and a balanced fund (for example I am saying). Split Rs.10,000 into these three funds by creating seperate folios. Again for second goal split Rs.5,000 among these three and create separate folio. How can this be overlap? You have different goals, different investments and different folios. While reviewing, you have to do it based on goals but not on overall investable amount. I personally club all investable equity investment and do it in single folios of respective funds. However, it may confuse for few while reviewing.
Thank you for the reply. I might have used the wrong term here. The word “duplicating” would be the right one instead of “overlapping”.As I understand from your earlier writings on portfolio management, one needs to select only one MF from each category in each portfolio for the better diversification. No matter what the duration of your individual goals (be it 25-30 years for retirement, 20-25 years for child’s marriage or 15-20 years for child’s education), what my doubt was, when you split your investment for 3 goals (say in this scenario), one should have the same type of MFs (be it large, mid/small/balanced) in all 3 portfolios or different MFs from their respective categories? If same, then I presume that it is like “duplicating” and I also feel that it is kind of “all-or-none” scenario (where either all your goals are rewarded with better or not so good returns provided there is cyclical ups-downs in the market). If different, then what about the risk of having same category MFs in the portfolios?Please correct me if I have misunderstood this approach.
Mahesh-Splitting is folio numbers but not the funds. Also, when we say as an asset class, we must chose the products in such a way that it must spread across all sectors (to minimize the risk of concentration). So when you invest in same fund or different funds of same theme then the result will be same-Either your get rewarded or penalized due to bad equity market. Just to avoid this scenerio, we suggest to have debt portoflio too and re-balancing activity. Many people do this mistake of investing in MF of their 100% investable money. Here, I am looking at each goal as seperate and selecting the funds for each goal based on the historical data. At end there may be same funds. But our goals must have diverisification.
Hi Basavaraj, Thank you for the clarification. I have a small doubt regarding having separate folios. Can I create different folios with the same AMC (as my PAN number and e-mail details are already present with it)? If yes, will it not be too confusing to track all the folios, as we will be having different AMC folios as a part of diversification, based on our goals.For example:No. of goals= 03No. of folios in large cap MF=1X3 (for 3 goals)=3No. of folios in mid cap MF=1X3 (for 3 goals)=3No. of folios in small cap MF=1X3 (for 3 goals)=3No. of folios in balanced MF=1X3 (for 3 goals)=3So, total number of folios to track=12!!Please correct me if I am wrong.
Mahesh-I agree. That is the reason I have only 3 folio number (from different AMCs) for all my goals. But some people find it difficult to withdraw or track. Because each goal will not have same tenure. If tenure is different then we must have different debt:equity allocation. Hence, for them it may be easy to track their goals by marking folio numbers. Yes, you can create as many as folios within the same AMC.
Thank you very much for the explanation.