Currently i am having below items in my portfolio.
My Profile – Age -27, Investment Horizon – Long term for Debts, for equities more than 5 yrs initially [Depends on performance ]. .
Below are the Financial Instrument descriptions :-
Mutual Funds –
Birla Sunlife Frontline Equity Direct (G) –> 1k [L-Cap]
HDFC Midcap Opportunities Regular Plan Growth –> 1k [M-Cap]
DSP BlackRock MicroCap Direct (G)–>1k [S-Cap]
Reliance Equity Opportunities Retail plan Growth Option[3+ yrs old]–> 1k
Axis Long Term Equity Plan Direct (G)–>1500—ELSS Tax Saving
Birla Sunlife Tax Relief’96 Fund Direct (G)–>1500–ELSS Tax Saving
SBI Pharma Fund Direct (G) –Sectoral Fund –> 1K
I have tried to diversify my MF portfolio with a consideration to have minimum or least overlapping of holdings and different flavors to it.
Kindly advise if they looks good to you or need some Improvements/reshuffling/switching to any other options ?
Contingency Fund – 45K currently in Savings Account.
Apart from above descriptions and your suggestion which i am seeking , also please suggest will it be better to keep contingency funds in savings account or any other financial Investment instruments i should think of and easy to take out when needed ?
Much thanks !!
Investment Horizon – Long term for Debts, for equities more than 5 yrs initially [Depends on performance ]-If performance not good then you stop investing? This is the problem and mistake many do. Try to identify the financial goals. Based on that understand the asset allocation. Finally go for products.
Instead of keeping contingency fund in savings account, you can create FDs (using internet banking) for a year. So that at any point of time you can liquidate it.
Are Mutual Funds selection good enough ?
Ok, will continue for more than 5 yrs, as yes i am having long term horizon and financial goals in my mind.
Regarding contingency fund, creating FD’s will make locking for 1 yr minimum and taking out will incur penalty and won’t be able to utilize the benefits of FD,RD’s .
Please suggest !!
Don’t say so randomly that I said long term, so your goal now long term. Be specific, because it is your hard earned money. Also, what asset allocation you preferred?
FDs can be liquidated with some % of penalty. But better than keeping money idle in savings account right?
Yeah u understand that the benefits can be capitalized going for long term.
Are these funds good as per my findings and your expertise ?
The concept of building contingency funds is like investing every month on continuous basis .that’s why I thought to build up using savings account.
Not sure how to achieve via FD ?
First and second found enough. Rest of the funds not necessary for equity portfolio. If possible you can include the said ELSS funds. You seems to be eager to identify the funds rather than proper investment strategy. Hence, I named my decision. Rest left with you.
Why can’t you create each month’s savings into a FD? That can be created right?
Large cap for stability and low risk.
Mid cap for moderate risk.
Small cap for aggressive growth and high risk. I want to utilise the equity market in best possible manner. Elss for my tax saving requirement.
As pharma sector is doing good and been consistent returns in last 3 yrs. I have bet on it as there is good growth in pharma sector. I don’t want to put all my money in a single basket. That’s why I have leveraged the funds in my portfolio.
I’ll try to explore about FD.
Do you feel the large cap, Mid Cap and Small Cap funds really invest 100% into the said market caps? Check portfolio and then decide. Do you feel the other funds not invest in Pharma? If so then how much % of overlap it creates to your investment?
In one way you claim “I don’t want to put all my money in a single basket” and in another way you are selecting sector fund (Pharma). Decide as per your risk appetite. I am not fond of sector fund. Because including GOD, NONE can predict what happens next or which sector will be hot. If someone claiming so then I salute him.
Yes the 97-98% concentration of these funds are equity then other fin instruments and more or less invest in same stocks or similar to it. But never changes drastically in one go. Source – crisil , moneycontrol, economic times, all respective Amc sites, morning star. vinit Sambre & Prashant Jain sticks to these fundamentals.
Every fund concentrates on banking and pharma that is true. But I’ve given a try to pharma fund due its consistent performance over the previous yrs. Not sure future but yes positive frame of mind.Funds consistency is more important and key factor for selection of funds. This I believes. Please suggest what more to look upon