Last year I published the list of Top 10 Best SIP Mutual Funds to invest in India in 2016. Now few started to force me to publish the post for Top 10 Best SIP Mutual Funds to invest in India in 2017. But before proceeding further, let us review the funds which I recommended last year.
Note:-My recommendations for the year 2018 are available in below posts. Please refer the same.
Below is the performance report of the funds which I recommended last year.
Before jumping into the selection of mutual funds, this time I thought to guide you why you MUST invest in equity mutual funds. The points are listed as below.
You must have a proper Financial Goal
I noticed that many of investors simply invest in mutual funds just they have some surplus money. The second reason may be someone guided that mutual funds are best in long run compared to Bank FDs, PPF, RDs, or even LIC endowment product.
If you have clarity like why you are investing, when you need money and how much you need money at that time, then you will get the better clarity in selecting the product. Hence, first identify your financial goals.
You must know the current cost of that particular goal. Along with that, you must also know the inflation rate associated with that particular goal. Remember that each financial goal to have it’s own inflation rate. For example, education or marriage cost of your kid’s is different inflation that the inflation rate of household expenses.
By identifying the current cost, time horizon and inflation rate of that particular goal, you can easily find out the future cost of that goal. This future cost of the goal is your target amount.
Asset Allocation is MUST
Next step is to identify the asset allocation. Whether it is short term goal or long term goal, the proper asset allocation between debt and equity is a must. I personally prefer the below asset allocation. Remember that it may differ from individual to individual. However, the basic idea of asset allocation is to protect your money and smoothly sail to reach the financial goals.
If the goal is below 5 years-Don’t touch equity product. Use the debt products of your choice like FDs, RDs or Debt Funds.
If the goal is 5 years to 10 years-Allocate debt:equity in the ratio of 40:60.
If the goal is more than 10 years-Allocate debt:equity in the ratio of 30:70.
While choosing debt product, make sure that the maturity period of the product must match your financial goals. For example, PPF is best debt product. However, it must match your financial goals. If the PPF maturity period is 13 years and your goal is 10 years, then you will fall short of meeting your financial goals.
Return Expectation
Next and the biggest step is the return expectation from each asset class. For equity, you can expect around 10% to 12% return. For debt, you can expect around 7% return expectation.
When your expectations are defined, then there is less probability of deviating or taking knee-jerk reactions to the volatility.
Portfolio Return Expectation
Once you understand how much is your return expectation from each asset class, then the next step is to identify the return expectation from the portfolio.
Let us say you defined the asset allocation of debt:equity as 30:70. Return expectation from debt is 7% and equity is 10%, then the overall portfolio return expectation is as below.
(70% x 10%) + (30% x 7%)=9.1%.
How much to invest?
Once the goals are defined with target amount, asset allocations is done, return expectation from each asset class is defined, then the final step is to identify the amount to invest each month.
There are two ways to do. One is constant monthly SIP throughout the goal period. Second is increasing some fixed % each year up to the goal period. Decide which suits best to you.
Hope the above information will give you clarity before jumping into equity mutual fund products.
How many mutual funds are enough?
How many mutual funds do we have? Is it 1, 3, 5 or more than 5? The answer is simple…you don’t need more than 3-4 funds for investing in mutual funds. Whether your investment is Rs.1,000 a month or Rs.1 lakh a month. With the maximum of 3-4 funds, you can easily create a diversified equity portfolio.
Having more fund does not give you enough diversification. Instead, in many cases, it may create you portfolio overlapping and leads to underperformance.
Now let us move to the selection of mutual funds.
How I selected Top 10 Best SIP Mutual Funds to invest in India in 2017?
I will first screen the top 15 funds in each category based on their returns to benchmark since inception. The funds who consistently beaten the benchmark are listed in that 15. Once I have the list in my hand, then I select the funds based on Risk-Return Analyzer.
Many simply select the funds based on eye-catching returns. However, at what cost the fund is giving you a better return? To what extent it protects my investment during a downturn is what differentiate from good fund to bad fund.
Again, I am not saying that these 1o funds alone be considered as “Top 10 Best SIP Mutual Funds to invest in India in 2017”. There may be fewer other funds, which are good to compete with these funds. However, I may be biased towards few Mutual Fund Companies (purely on their size and how long they are in MF business in India). Below are the metrics I used to arrive at finally selecting the funds.
If the fund cleared all these tests and given me around a minimum of 80% score since inception, will be added to my list.
- Beta-Volatility measure and tell how much the fund changes for a given change in the Index. Lower the beta, lower the volatility. Hence, your fund must have lower beta.
- Standard deviation-It tells us how for a given set of returns, how much do fund returns deviate from the average. Lower the standard deviation, lower the volatility. Hence, your fund must have lower beta.
- Alpha-It is the risk-adjusted measure. By taking risks, how much the fund manager generated the return over the benchmark. Higher the alpha, higher the outperformance of the fund.
- Sharpe Ratio-It is the risk-adjusted measure. Higher the Sharpe ratio, better is the performance.
- Sortino Ratio-It is the risk-adjusted measure. Higher the Sortino ratio, better is the performance.
- Treynor Ratio-It is also be known as reward ratio. Higher the Treynor ratio, better is the performance.
- Information Ratio-This is calculated by average excess return obtained compared to a benchmark and divides it by the standard deviation of excess returns. Higher the information ratio, higher the consistency in beating the benchmark.
- Omega Ratio- It is a risk-return performance measure of an investment asset.
- Downside deviation-This is also be called as BAD RISK.
- Upside potential-This is exactly the opposite of Downside deviation.
- R-squared- It is a measure of how correlated the fund’s NAV movement is with its index.
- SIP Returns-For how many times the fund’s returns are above the index when we invest in SIP.
- Lump Sum Returns-For how many times the fund’s returns are above the index when we invest in a lump sum.
Below are my selection in each category of funds.
Best SIP Mutual Funds to invest in India in 2017 -Large Cap
In this category, I found that funds like SBI Bluechip and Birla Sunlife Frontline Equity Fund are also best. However, I am going with below choices.
Check the consistency of Franklin India Bluechip Fund from this below image.
Check the consistency ratio of ICICI Pru Focussed Bluechip Fund in the below image.
As I said above, there are other funds also which scores equal or more than these two funds. But I stick to these two funds. There is no reason of negating these two funds.
Best SIP Mutual Funds to invest in India in 2017 -Multi Cap
Again in this category of funds, I found few funds like SBI Magnum Multiplier Fund and Franklin India High Growth Companies Fund. However, I stick to below two funds and which are my favorite too.
Check the consistency ratio of Franklin India Prima Plus Fund in below image.
You may notice that for a 1-year return the score is dropped below 80 and currently showing as 70. However, due to it’s long best track record, I suggest to invest and continue in the same fund (if few already invested in this fund).
Check the consistency ratio of ICICI Pru Value Discovery Fund in below image.
Same is the case with ICICI Fund also. However, considering the consistency and just a drop in that for a year does not mean that we must neglect this fund. Hence, I will stick to this fund.
Best SIP Mutual Funds to invest in India in 2017 -Mid Cap
Last year I selected HDFC Midcap Opp Fund and also Franklin India Prima Fund. I am continuing with same funds.
Check the consistency performance of HDFC Mid Cap Opp Fund in below image.
Check the consistency performance of Franklin India Prima Fund in below image.
A drop in a year from both funds does not mean they are BAD. Hence, considering the consistency of fund since long, I am suggesting these two as best funds.
Best SIP Mutual Funds to invest in India in 2017 -Small Cap
In small cap category, the funds in my mind are Canara Robeco Emerging Equities Fund, DSPBR Micro Cap Fund, and Franklin India Smaller Companies Fund. In these three, I go with DSPBR and Franklin.
I am unable to generate the consistency score for both the funds. I will update the image once I am able to do so. However, these two funds are my favorite among small cap.
Best SIP Mutual Funds to invest in India in 2017 -Equity Oriented Balanced Funds
Among this category, I have in mind the funds like HDFC Balanced Fund, ICICI Pru Balanced Fund, Tata balanced Fund and Franklin India Balanced Fund. But I go with HDFC and ICICI.
These are my choices of Best SIP Mutual Funds to invest in India in 2017. It does not mean that they are universal choices. There are certain other funds too. However, I stick to these funds as my best choices.
NOTE:-I have disabled commenting to this post. If you have a doubts or questions, then refer my latest post “Top 10 Best SIP Mutual Funds to invest in India in 2018” OR raise the doubts in BasuNivesh Forum.
Refer our other posts related to Mutual Fund Investment in 2017-
- Top 5 Best ELSS Tax Saving Mutual Funds to invest in 2017
- Top 5 Best Liquid Mutual Funds in India in 2017
- Top and Best Debt Mutual Funds in India for 2017
- Mutual Fund Taxation FY 2017-18 and Capital Gain Tax Rates
Dear Basavaraj,
Can you advise best Ultra Short term/ Short term debit funds for Debit investment use after 8 Years. How about one of these ?
SBI Magnum Gilt Fund – Short Term – Regular Plan – Growth
SBI Magnum Gilt Fund – Long Term – Regular Plan – Growth
Kumar-Refer my post “Top and Best Debt Mutual Funds in India for 2017“.
Sir,
I’m 31 years old with 8L salary p.a. I have been already investing in PPF for last 2 years of Rs. 75,00 per annum. I have Term & Health insurance. My next goal is Child’s education, wait time is 13 – 15 years and planning to invest in MFs with SIP Rs. 5,000 per month, however still at analysis stage. I’m a moderate risk take and have below clarifications.
1. How should i diversify my funds b/w Large, Mid & Small Cap funds. What should be the ratio?
2. Can i skip Large cap and focus only on Mid and Small cap funds alone?
3. Can you suggest funds for my case, advise from experts like you is really beneficial. I will surely analyze them before investing.
I would like to sincerely appreciate you on the excellent service/suggestions you do on Financial planning.
Correction in the above, my PPF investment is Rs. 75,000 per year.
Pradeep-1) There is no such defined rule. But I usually follow 50:30:20.
2) Large-cap also necessary.
3) My funds are already listed in above post.
Sir,
Thanks for your suggestion.
Hello Basavaraj,
I am Govt Employee 35 Year Old. I like to invest with following Portfolio for marriage of my daughter in next 18 years. I am moderate risk taker. My asset allocation in Equity:Debt is 45:55.
My FD having 500000 will get matured in January 2018. I am planning to invest this amount using STP again for 10 years. Please advice which fund is suitable to do this or please advice other plan to utilize this money with time horizon of 10 Years.
Kotal Select Focus(D) 3200
HDFC MidCAP Opprtunities(D) 3200
Motilal Oswal MOSt Focused Multicap(D) 35 Fund 3200
ICICI Pru Balance Fund(D) 3200
L&T Emerging Businesses Fund(D) 3200
Aditya Birla Sun Life Tax Relief 96 (G)(D) 4000
Total 20K per month
Besides this, I have
PPF 100000 Annual
NPS 9000 Monthly
FD 500000 (January 2018 maturity)
My query is, should I go for any new funds or increase investments in existing funds? I would just like you to review my mutual funds selection and would like to know your thoughts on it. If any changes you think is needed then please suggest.
Shreeja-Try to follow the asset allocation of around 30:70 between debt and equity. Regarding the fresh investment, use the same existing funds with proper asset allocation. You just need 2-3 funds from equity.
Hello Sir,
I am 35 Year Old and take Home salary is 3.50Lakhs per month.
Started Investing 3 months back, having SIP profile below with clear 15 Years Investment Horizon. Please advise me on my Current Portfolio. Does it require any change by adding or removing fund? My plan is to Stay Invested for a longer period & the motive is Wealth creation over a period of time.
My Risk appetite is Moderate to high. Asset Allocation (Equity:Debt) 70:30
LUMPSUM (3years Horizon)
Kotak Corporate Bond Direct 25Lakh
SBI Magnum Gilt Fund Direct 25Lakh
Franklin India Low Duration Fund Direct 25Lakh
SBI Magnum Income Direct Plan Direct 25Lakh
S I P(Monthly)
LARGE CAP
SBI Bluechip Fund Direct 13000/-
Aditya Birla Sun Life Frontline Equity Fund Direct 13000/-
Kotak Select Focus Fund Direct 13000/-
MID CAP
Mirae Emerging Bluechip Direct 10000/-
L&T Midcap Fund Direct 10000/-
SMALL CAP
DSP BlackRock Micro Cap Fund Direct 10000/-
BALANCED FUND
HDFC Balanced Fund Direct 10000/-
MULTICAP
L&T India Value fund Direct 10000/-
ELSS
Tata India Tax Savings Fund Direct 11000/-
Total Monthly SIP 100000/-
Suknya S.Yojna 1.5L Per Annum (since last 3 years)
PPF 1.5L Per Annum (since last 6 years)
NPS 120000 Per Annum (since last 6 years)
Mediclaim Annual Premium 15000/-
NFO ETF value worth Rs 100000
Contingency amount 500000 in Liquid Fund
I am in position to invest another surplus monthly amount worth 200000 with 3 Year horizon keeping in mind. Please guide me for how to utilize this portion as well.
I currently do not have any debt upon me. Hence looking for an opinion whether I should increase my SIP / exit or invest in any others that would probably be more preferable then any of the above.
Anil-For short-term goal, use Ultra Short Term or Short Term Gilt Funds. For long term goals, refer my above post of how to adhere to allocation and funds. You no need to have multiple funds within same cateogry.
Sir, Thank you for your reply. I value your suggestion. I also see it crowded and remove unnecessary fund and will keep it straight and result oriented. I will modify and follow funds below:
2 In large Cap
1 each in Small, Mid, Multi, ELSS and Balanced Fund.
I hope this will make the portfolio balanced and yield good returns, I expect not more than 10-12%
For monthly 2,00000/ will certainly opt short term.
Dear Basavaraj,
To have a good retirement corpus, planning to invest in balanced funds as they follow Debit:Equity in 30:70 ratio. Also, thinking to keep 20% of my invest in ultra short term debit funds. I don’t want to touch this fund in next 5 years.
planning to invest in lump-sum method and considering HDFC balanced fund. Is this OK or should I consider any other options. Is lump-sum better or should I invest in SIP in 6 months with weekly investment?
Let me know your feedback on balanced fund and lump-sum approach
Regards,
S. Kumar
Kumar-Whether your retirement is 5 years away from today? What allocation you are following between equity and debt? If the goal is long term (5+ years) and you did proper asset allocation, then spread your equity investment manually into not more than 5-6 months of investment than a lump sum.
Thanks Basavaraj Ji.
I will follow your advise and span it across 5-6 months instead one shot lump-sum. My allocation was 40% Debit in Short Term/Ultra Short Term and 60% equity and I am going to touch the corpus only after 8 years.
On 40% Debit allocation, part of balanced fund, assuming that 30% of investment will be in debit and 60% will be in equity. For remaining 10% debit (for total 40%), I would like to invest in Short Term/Ultra Short Term.
Is this OK?
Read in the first line that 40% debit (30% through Balanced fund and 10% in Short Term/Ultra Short Term
Kumar-Go ahead.
Many Thanks for your time, kind review and advise
BasavaRaj,
Another query on alternate to balanced Fund and go with below allocation.
Ultra Short term/Short Term : 40%
Large cap: 30%
Mid cap: 20%
Small cap: 10%
Span the lump sum investment in 4-5 months manually (preferably buying Daily)
Is the above allocation is OK or better to go with Balanced as per my above post on 21-Nov.
Can I Split Debit 40% between Ultra Short term 20% and Short Term 20%
Kumar-You can do so.
Dear Basavaraj,
For Debit portion, Can I consider NPS Tier1 account Government Bond Pland (Class G) ?
In Debit MFs & NPS- Class G investments, which one is safe among each other?
Kumar-They are risk as they hold long term gilt and other debt bonds.
Many Thanks Basavaraj.
Can you advise best Ultra Short term/ Short term debit funds for Debit investment use after 8 Years. How about one of these two?
SBI Magnum Gilt Fund – Short Term – Regular Plan – Growth
SBI Magnum Gilt Fund – Long Term – Regular Plan – Growth
Kumar-Refer my post “Top and Best Debt Mutual Funds in India for 2017“.
Dear Sir,
I am from Belgaum.
Can you please suggest Financial advisers in Belgaum?
Thanks
SRM
Shrinivas-No idea. Sorry.
Dear Vasu Sir,
I am 37 years and have a kid of 5 years. Have following investments. Want your opinion on my investments for any changes considering the long term returns, 10 years or above (wealth generation for my kids’ education). I am also planning to open “Sukanya Samriddhi Account” for here in new year with 2000 investment each month. Do I need to change my investments , especially MFs (or add more) . If so please guide.
Note : I started investing in MFs from this month only and your blogs guided me a lot.
Eagerly waiting for your advice.
Best regards,
Sanjeev
PPF @12000 PM
EPF-EPS with my company contribution @13424PM
National Pension System-NPS @5000 (Started in Dec 2016)
Cooperative Society @2000 PM
HDFC- RD @2000 PM (ending in Jul 2019)
ICICI- RD @2000 PM (ending in Sep 2018)
MFs :
Equity- Large Cap @1000-SBI Blue Chip Growth
Equity- Large Cap @1000-ICICI Pru Focussed Bluechip Fund -Growth
Equity-Mid & Small Cap @1000-Franklin India Smaller Companies fund- growth
Equity-Mid Small Cap @1000-Reliance small cap fund- High risk high return
Equity-Diversified @1000-Franklin India High Growth Company Fund
Debt-Short Term @1000-Birla Sun Life Short Term – Growth
Sanjeev-What prompted you to go ahead with this plan and why you started to doubt yourself within a MONTH of investment?
Hi Basu Sir- Thanks for your comments
What prompted me ?
For conventional plan like PPF, NPS , CS and RDs : I just wanted to make saving. Frankly speaking, I was not much aware about other ways of savings. I just went with what my guardians and peers were doing to save money and taxes. I will love to continue with PPF, NPS, CS, and Sukanya Samriddhi
For MFs : I recently went to one meeting where they discussed about MFs, Shares, Gold, and other modes for high interest rate compared to other mode (they also discussed risks). I selected and invested (before I experienced your blog) these funds based on my own research online and discussion with few seniors investing in MFs.
Doubt :
The more I read or try to explore, more doubts come in my mind about my investments whether it is a right start or not ? I also want to increase (about double) my SIP amount in early 2018.
I just want to have your guidance on my current investments if it needs any changes considering my goal of wealth generation for my kid.
As usual , thanks for your advice.
Best regards,
Sanjeev
Sanjeev-Refer my above post fully (not the funds I listed). Wait for a year or so, then check the fund performance.
Will do so. Thanks a lot.
Best regards,
Sanjeev
Hi Basu,
I have one doubt. These days many foreign companies are working in India in Mutual funds industry. We are investing them in for say 10 years or more. Is it completely safe like what if they wind up their business in India after few years, so is it completely safe?
Thank you.
Pradeep-Nothing is safe on this earth including the money you are keeping money in your savings account. However, there are strict regulations by SEBI. They can’t wind up their business so easily.
Basavaraj Sir,
In your view which is better safe/ preference :
1) NPS
2) Mutual fund Co.
Saptarshi-Safety in what sense?
Hello Basu, Hope you are doing well. Just curious to know about the commission on MFs which we invest. When I was going through the NSDL report . I could see commission paid to the distributor comes around 2 to 3 % in total. When I had checked with my financial adviser, he told me that, if I invest for at least three years, there won’t be any deduction for the withdrawal and I have got few funds in ICICI securities , it’s same for them also. Apart from that , I have received email from ICICI securities , If our mutual fund holdings are less than 8 Lacs on the date of transaction, you will be charged the transaction charges as additional one.So I would wanted to check if we can transfer the mutual funds directly to originator or is there any better option to transfer the funds. Please advise.
Thank you,
Karthik Gangadharan
_
Karthik-Check the exit load and taxability of each fund you are holding before moving from regular to direct. ICICI Securities provides ONLY regular funds but not direct funds.
ok, thank you Basavaraj !
Hello Basu,
I am 30 yr old unmarried.i have invested in below.
Ppf- 2k/month
Axis long tem equity -2k/month.
Wants to start sip of 2k or 3k for next 5 years.can you plz suggest funds for my portfolio.
Abhi-As per me, if your time horizon is just 5 years, then stay away from equity investment.
Hi Basu ,
Many thanks for answering my previous queries! This time a new query for which my portfolio details are below
My goal : Retirement corpus
Investment Tenure: 20 years
Risk ability: Moderate
Investing last 1.5 years in the Debt: Equity ratio 65:35. Debt is EPF & VPF
Equity proposition : 50% Large cap, 30% mid , 10% – small and 10 % – multi (ELSS for tax saving) – 4 funds
Now I want to top up amounts my portfolio:
Recent announcement of FM Arun Jatley(2.11 lakh crore investment towards PSU development) had made me to think in investing Banking sector fund with 10% and my choice would be “ICICI Prudential Banking and Financial Services Fund ” in this space.
Would you advise go with this fund or would you suggest to increase/top up in existing fund? please advise.
As a golden rule, I will maintain the asset allocation according to the new top up. 🙂
Hari-Never chase them or a particular sector. I simply give a miss to such news based ups and downs.
Thanks Basu for your suggestion!
Hello Basu,
I had few SIP’s under a broker since Jan2015. I now understand importance of Direct and Regular fund. I want to invest in mutual funds myself henceforth. So i stopped those SIP. My query is –
1. Whether to redeem that money and pay Capital Gain? Then invest lumpsum in a fund and then start new SIP direct mode.
2. Or Keep the money until i require them and for now, just start new SIP direct mode.
3. Or Wait for 1 year, take LTCG benefit and then invest lumpsum in a fund and then go for a new SIP direct mode.
Sumit-Better to wait for 1 year completion (if they are equity funds). Then move all such one year completed units to direct. In the meantime start a SIP freshly in direct fund.
Hi,
Thanks for the reply.
Since i’m planning to invest in direct mutual funds through Zerodha’s Coin platform, I can’t transfer/move the amount (after 1 year) directly, so you suggest to redeem the amount and buy directly, right?
Sumit-Zerodha offers direct and makes you to hold it in demat account, which is not required. Yes, redeem and buy in direct is the way.
Hi Basu,
Interested to purchase a Direct Balanced MF through CAMS. Already, few MF’s running under CAMS through AMC.
Plan:
Investing Rs 1Lakh /year for 5years and excess amount is deposited after 5years also.
Withdrawal amount: Rs 2500/month and extra like Rs 1000/- withdraw after 5years only.
Please suggest me, which Fund suits me.
Thanks & Regards,
Praveen
Praveen-Refer above post properly.
Hai Mr. Basu,
I Am Anvesh. Age 25. I want to invest 10-15k in a month
I have shotlist the follwing funds:
1. Aditya Birla Sun Life Front Line Quity Fund – Growth
2. Mirae Asset Emerging Fund – Regular Growth
3. Principal Emerging Bluechip Fund – Growth
4. Canara Robeco Emerging Equities – Regular Plan – Growth
5. Kotak Select Focus Fund – Growth
6. L&T India Value Fund – Regular Plan – Growth
Can you please suggest whether the portifolio is too risky. Also, if you feel so, please suggest other funds
Thanks in Advance
Anvesh
Anvesh-How you arrived at these funds? What is the time horizon? What asset allocation you are following?
Dear sir, This is Rama Bhadra Rao, 32 years old. I am working in Taiwan and will be back to India after 5 years. I plan to invest 5L (Lump sum) in mutual funds. I do not want to use this amount for another 15 years (or above). Could you please let me know what are the best funds. I am very grateful to you if you can help to update the plan given below. Thanks a lot for your kind help.
As per my knowledge (1 L in each, total 5 ):
1. Large Cap Equity (Kotak Select Fund direct Growth )
2. Mid and small Cap Equity (L&T emerging businesses fund Direct Growth)
3. Diversified Equity fund (Principal Emerging Bluechip Fund – Direct Plan (G) )
4. Balanced Equity based fund (HDFC Balanced Fund )
5. Infrastructure Equity fund (DSP BR Natural Resources & New Energy – Direct (G))
I am expecting 15% average returns per year.
Thank you very much for your kind help.
Adari-How you arrived at these funds?
Hi, Thank You very much for your kind reply. I grab the list of funds from ,oney control based on last 5 years performance (reruns). Let me know your suggestion to meet my goal.
Adari-Sure..Go ahead.
Thank You very much for your kind reply and suggestion.
I will invest 2.5 L now (50000 in each). I will wait for a couple o months to put the remaining 2.5L for the same funds (market may come down in a couple of moths). Let me know if I am wrong.
Thanks a lot for your great help.
Adari-How you assume that market will come down?
Just fear… because market is at peak now.
Adari-If you have long term view and did proper asset allocation, then you no need to worry.
suppose if we invest almost 8-10 year compare in Large cap & mid cap cap which fund should continue in this both for risk & return wise i expect better return and low risk can i go with only mid cap fund because i seen large cap return good in long term
Jai-Contradictory statement “can i go with only mid cap fund because i seen large cap return good in long term”.
sorry my question is “can i go with only mid cap fund for up to 10 year because i seen large cap return is not good in long term as expected mid cap because i expect 18-20% return ”.
Jai-Mid caps may be eye catching during such bull run. But large caps gives you consistency. Same way small caps are more catchy than mid and large cap. But with risk. Decide what you do.
thank you for your clarifications
and
multicap risk factors also low as compare midcap??
Jai-Multicap funds have the mandate to move any market cap. Hence, it is hard to say whether less or riskier.
Hello Basuji,
I have MF investments in following funds. All are DIRECT-Growth using SIP. Started in Oct 2015.
My age is 32 and investments are for 18 years.
Axis long term ELSS – 4k/m
Aditya birla sunlife Top 100 – 3.5k/m
HDFC balanced – 2.5k/m
Mirae asset emerging bluechip – 3k/m
I am handling my debt investments using PPF and FD. (equity:debt = 70:30)
Questions:
1. Is my portfolio on track. Do I need to perform any changes to my investments.
2. Is it advisable to add one multi cap fund or should i increase my SIP amount instead.
3. Is it true to understand Axis long term MF as a multicap fund in addition to its 80C benefits. (Reason being it as 25~30% investments in mid cap companies)
Mukul-Yes fine but review once in a year must. Regarding axis, it is more inclined to large cap with around 50% and rest spread in between small and mid cap.
i have separate portfolio with 5 different fund house for direct plan is that good or i need to move at signal place (like- zerodha) for all invest means is that secure to invest with MF fund house directly because i am not able to track my all fund at one place .
Lokesh-Refer my post “Best Direct Mutual Funds Platforms in India to invest online“.
Your explanation on every point is wonderful
Lokesh-Pleasure.
I would like to extend my thank to you . You did wonderful blog ! Appreciate your efforts .. Long way to go bro 🙂
Karthik-Pleasure 🙂
Dear Basu
I need additional amount about 50 lakhs in next 3 years for buying a bigger home . For this goal alone what should be the monthly SIP and which segment large cap/mid cap and which fund house you recommend. Please guide
Seema-For such short-term goal, stay away from equity-related products. Stick to Ultra Short Term Debt Funds.
Hi basu,
Your work is highly appreciated.Thanks a lot for your valuable service.
I have already investing in SIP and have identified goals and accordingly invested in SIP ,PPF with 70% in equity and 30% debt with time horizon of more than 10 years.
However,I still have around 30 lakh in my saving account which i dont need in near future atleast 7-8 years.What is the best way to invest this money?
Sravan-Same process. Do the asset allocation and if you feel fear to invest lump sum in one go, then spread that for parts of not more than a year.
Thanks basu..but i do not have any financial goal to invest remaining money.Is is wise to invest lumsump in ultrashort term or gilt fund as safer option? Thanks in advance.
Sravan-You use Short Term Gilt Funds.
Dear Mr.Basu Ji,
This blog is very informative and knowledgeable and Many Many Thanks for this. I ‘ve below queries for your valuable feedback.
Q1).
I am 44 year old and planning for retirement investment some 50 lacs. Out of this I want to put 25lacs(from property sale) as lumpsum now and remaining 25 lacs to accumulate to a good amount in 10 years of time and then take the returns through SWP. Here are the funds I am planning to consider the below funds. Please advise.
a). HDFC Balanced Fund (20%) = 5 lacs Lumpsum + 5 lacs SIP
b). L&T India Value fund (20%) = 5 lacs Lumpsum + 5 lacs SIP
c). Franklin Build India high grown companies fund(20%) = 5 lacs Lumpsum + 5 lacs SIP
d). Mirae asset emerging blue chip fund (40%) = 10 lacs Lumpsum + 10 lacs SIP
Q2). I would like to invest 25 lacs through SIP for my children’s education in next two years. would like to accumulate returns to take the returns after 8 years from now. For this I am considering the below funds. Please advise these are OK or any better funds you suggest..
a). L& T Prudence Fund – 8 lacs
b). SBI Magnum Mid cap fund – 8 lacs
c). Mirae asset emerging blue chip fund – 9 lacs.
Kumar-1) How much asset allocation you did between debt and equity?
2) Again you missed the asset allocation.
Thanks Basu for the feedback.
Considering your valuable feedback and following the principle 30:70, I planning to make the allocations as below.
Retirement: Would like to invest 60lacs as almost lump-sum and Expecting returns to take after 7 Years. (25 lacs lump-sum and another 25 lacs SIP in 4 months]. Here is my plan and allotments
a). HDFC Balanced Fund (50%) = 15 lacs Lump-sum + 15 lacs SIP
b). Reliance Monthly Income Plan-Growth Plan (10%) = 3 lacs lump-sum + 3 lacs SIP
c).DSP BlackRock Micro Cap Fund – Regular – Growth (15%) = 4.5 lacs lumpsum + 4.5 lacs SIP
d). ICICI Prudential Value discovery fund (10%) = 3 lacs lump-sum + 3 lacs SIP
e). Mirae Asset Emerging Bluechip Fund -Regular- Growth Option(10%)=3 lacs lump-sum + 3 lacs SIP
Child Education: [25 lacs SIP in tw0 years and expecting to take only after 8 years from now for my children education]
i). HDFC Children Gift Fund-Investment – 8 lacs SIP in 2 years
j). Aditya Birla Sun Life Balanced 95 Fund – Regular Plan-Growth – 7 lacs – SIP in 2 years
k). Mirae Asset India Opportunities Fund – Growth Plan – 5 lacs SIP in 2 years
l). Aditya Birla Sun Life Tax Relief ’96 – Growth Option – 5 lacs SIP in 2 years
Is the above allotment for the said purposes is OK or any other expert suggestion to change allotments or other funds for consideration.
Thanks in Advance for your time and feedback.
Kumar-For your 7 and 8 years goals, 30:70 is bit risky. I suggest around 50:50 or 40:60. Also, for all such goals, in equity one large cap (60%), one mid cap (30%) and one small cap (10%) enough. For debt, use ultra short term debt funds or short term gilt funds.
Dear Basu,
Thanks for yourfeedback.
I can take moderate risk and per your feedback, changed the allotmnets to as below.
Balanced Equity: HDFC Balanced fund (10 lacs), L&T Prudence Fund (10 lacs)
Large Cap: Kotak Select Focus fund (5 lacs)
Diversified: Mirae Asset India Opportunities Fund(7.5 lacs)
Mid & Small cap: DSP BlackRock Micro Cap Fund(7.5 lacs) & Mirae Asset Emerging Bluechip Fund (5 lacs)
Balanced Debt to reduce risk : Reliance Monthly Income Plan (5lacs)
Can you review and provide your valuable advise on the above fund combination. If anything to be changed, please let me know.
Thanks in advance
Kumar-Whether you checked the balanced funds portfolio of equity and debt? Why MIP in debt? Why two funds within same categories?
Dear Basu,
Thanks. I missed a point that fund selection should not only be on category and should also the fund portfolio whether it is matching our purpose.
In HDFC balanced fund, 31.25% is under debit and L&T Prudance 24% is under Debit.
It was mistake that I mentioned MIP in debit. In Debit, my choice is Aditya Birla Sun Life Dynamic Bond Fund – Growth
Under Mid & Small, I will stick to Mirae Asset Emerging Bluechip Fund due to its low standard deviation, low beta and high alpha compared to DSP BR Micro cap fund.
Here is modified fund selection further to your feedback.
Balanced Equity: HDFC Balanced fund (10 lacs), L&T Prudence Fund (10 lacs)
Large Cap: Kotak Select Focus fund (5 lacs)
Diversified: Mirae Asset India Opportunities Fund(7.5 lacs)
Mid & Small cap: Mirae Asset Emerging Bluechip Fund (12.5 lacs)
Debt Fund : Aditya Birla Sun Life Dynamic Bond Fund – Growth (5lacs)
Is the above OK or still you suggest to increase Debit %?
Please let me know your expert inputs on the above MF Portfolio composition as lump-sum investment. Next 8 years I do not want to touch this as the purpose is for retirement corpus building.
Kumar-In debt, I will not go beyond short term or ultra short term debt funds. Because you have already enough volatility in equity. For 8 years plan stay away from small cap. One large cap and one mid cap enough with separate debt fund.
Thanks again for the feedback.
I’ve chosen Mirae Asset Emerging Bluechip Fund and thought it is mid cap. Please confirm is this Mid cap or small cap fund. Under Short Term debit Debit, Aditya Birla Sun Life Treasury Optimizer Fund. Here is the MF portfolio list after suggested modifications
Balanced Equity: HDFC Balanced fund (10 lacs), L&T Prudence Fund (10 lacs)
Large Cap: Kotak Select Focus fund (5 lacs)
Diversified: Mirae Asset India Opportunities Fund(7.5 lacs)
Mid cap: Mirae Asset Emerging Bluechip Fund (12.5 lacs)
Short Term Debt :Aditya Birla Sun Life Treasury Optimizer Fund. (5lacs)
Is the above list is OK or any other changes to be made? Please suggest funds still I need to consider to make the MF Portfolio stronger for 8 years Retirement fund
Thanks in Advance
Kumar-It is large cap with around 70% in large cap and another 30% spread in mid and small cap. I don’t think any reason to go for two balanced funds in fact with balanced funds when you specifically allocating between debt and equity.
I PUT 200000/- IN franklin ultra short bond fund super institutional plan IS THAT OK FOR ONE YEAR?
AND MY sip IS
1- Sbi MEGNUM MID CAP -2000/-
2- Franklin Smaller cap fund 2500/-
3- Mirae Asset Emerging Bluechip Fund 1500/-
For 5 Year Horizon please suggest me sir if any change need in portfolio
Lokesh-You can go ahead. If your time horizon is 5 years, don’t touch equity.
dear sir
i want invest
5 lac lumsum as per your suggestion which fund is better expected return 10 time fram maximum 2 year
Lokesh-Invest either in liquid funds or ultra short term debt funds.
Dear sir
I want 1 crore after 20 years. My investment is following
1) SBI emerging business fund-1000
2) reliance tax saver-2500
3) Birla tax relief 96-1500
4) IDFC premium equity-2000
5) Birla frontline equity-2000
6) Birla India gennext -2000
7) Franklin smaller fund-3000
8) Kotak select focus-2000
9) reliance gold fund-1000
Kindly guide me if any chance regarding to achieve my goals.
Ritesh-Frist follow the asset allocation and choose the funds based on that. You no need to require so many funds.
Thanks for your reply,
I have made some changes in the list. Pl suggest is this OK.
S.No Fund Name Investment amount Tenure
1 Birla sunlife front line equity fund 3500 >10 years
2 ICICI Pru value discovery fund 2000 >10 years
3 HDFC Balanced fund 1500 >10 years
4 HDFC Mid cap opp fund 3500 5-10 years
5 SBI Magnum gilt fund 1500 5 years
Shiva-Please refer above post properly and the asset allocation you have to do. You included Midcap fund for 5-10 years. Not sure when the goal is. There is a huge gap of 5 years between 5th and 10th year.
Dear Mr. Basu,
I have planned to invest 10k monthly through SIP. Pl advice whether the below proposition is good for the tenure I choose.
S.No Fund Name Investment amount Tenure
1 Birla sunlife front line equity fund 3000 >10 years
2 ICICI Pru value discovery fund 2000 >10 years
3 HDFC Mid cap opp fund 2000 >10 years
4 HDFC Balanced fund 2000 5 years
5 SBI Magnum gilt fund 2000 5 years
Shiva-For each time horizon, you must have a proper asset allocation. Where is the debt allocation for your 10 years goal? Please refer above post properly.
Hi Basu,
I have read many blogs related to this topic but you were taken a place in my mind. It is really very different in comparison with other blogs. Yours was the most unique and attractive one. You actually really write something different and real.
Nisha-Thanks for your kind words 🙂
Hi Basu sir,
please review my portfolio:
Investment Time Horizon is 15 years.
I am investing 10000 per month in the below mutual funds.
1)Franklin india blue chip fund(G) -5000
2)HDFC midcap opportunities fund(G)-3000
3)Franklin india smaller companies fund(G)-2000
And PPF-5000
My overall Equity:Debt allocation is 70:30 (10000:5000).
i also invested Rs.200000/-lumpsum in ultra short term debt fund(Birla sunlife floating rate fund(G)-direct) for 10 years.
please let me know,is my portfolio balanced ?
Thanks in advance…
Sukumar-Why Rs.2,00,000 lump sum in short term debt fund? Why not you did the asset allocation for that also?
Hi Basu Sir,
Could you please review my portfolio below
I have been investing 30000 since last 2 years in the below mutual funds.
ICICI Pru Focused Bluechip fund- 6000
Reliance Small Cap fund- 9000
HDFC Mid Cap Opportunity Fund-9000
HDFC Balanced Fund-6000
PF- 6000
Investment Time Horizon-12 years
I am considering balanced fund and PF for my debit portion. Overall Equity and debit portfolio allocation is as below
Equity : Debit= 70:30 (24000:12000 – As i said that I am considering balanced fund and PF for my debit portion.)
Could you please let me know that if my portfolio is balanced.
Thanks in advance!!!
Jitendra-Check the overlap with HDFC Balanced to other funds. If they are not that much, then you can hold and continue. Also, instead of higher exposure to large cap, you have given more importance to mid and small cap. Increase exposure to large cap and then mid cap and in small portion towards small cap.
Thanks a lot sir for quick response. I will increase some more exposure to large cap.
I am thinking to alloate money in the below ratio.
Large cap- 30%
Mid cap – 30%
Small cap-20%
Balanced- 20%
Please let me know if equity allocation is fine for 12 years.
Thanks in advance!!!
Jitendra-You may go ahead.
What is your perspective of not keeping ABSL Advantage Fund in your selection?
Sudipta-What prompted you to select this fund?
Hello. My age is 37. I had sips running earlier for 3 years. Now i am planning following 4 sips.
1. Kotak select focus fund G Rs. 5000
2. A birla frontline equity G Rs. 5000
3. Hdfc midcap oppn fund G Rs. 5000
4. Mirrae asset emerging bluechip G Rs. 5000.
The objective is wealth creation over long term over 10-15 years. Can you please advice if this looks ok?
Andy-10 years or 15 years? Be specific at first. Second thing, what asset allocation you are following? What are the funds where you already investing?
Hello
It is 15 yrs to be specific. The asset allocation is 30 :70 where 70 is equity. I have current sip running in Franklin India bluechip growth, icicipru focused bluechip G and hdfc midcap opp fund all totalling to Rs.10000.
Andy-Then why can’t retain the same ONE LARGE CAP and the same mid cap?
Hi Basu,
Hope u r doing well!My present investments are as follows:
SIP
Franklin india prima plus growth direct-5000/pm
Franklin’s india smaller companies fund direct-4000/pm
Pf-15000/pm
Post office rd-5000/pm
Now I wish to invest further total 10000 per month in equity mf devided in 2 sip,duration- 10+ yrs and 3-5 yrs.My plan is as below:
HDFC balanced fund-4000 pm-3-5yrs
Icici Pru focussed blue chip /frankline ind blue chip fund or
Any other large cap fund- 6000/pm-10+yrs
Kindly give ur valuable advice about my overall portfolio and new investments.
Waiting for your feedback.
Shekhar-First thing, if your time horizon is around 3-5 years, then don’t enter into equity. Second thing, regarding the investing or rejig in current portfolio, hold one large cap, one mid cap and small portion of small cap fund enough in equity. Regarding debt, if PF or Post Office RD maturity in line with your financial goal, then you can continue. Otherwise, try to use debt funds.
Thanks for quick response.
Re my mf portfolio as per ur advice one small cap ( Franklin smaller companies fund) is there. One multi cap(Franklin prima plus) I am holding.Now I have 2 questions.
1. I wish to add one large cap I am confused between icici focussed blue chip fund and Franklin blue chip fund.
2.Further one mid cap fund should be there as u advised. Kindly clarify one multi cap (Franklin prima plus which i am holding) will solve the purpose of having exclusive mid cap fund.Your insight is requested to finalise my investment/ shuffling in portfolio.
With Regards,
Shekhar
Shekhar-1) Franklin.
2) The problem with the multi cap is that they have the mandate to move in any market cap segment. Hence, at any one point you may have higher exposure towards one single market cap without your notice. Hence, I suggest separate mid cap.
Hello Sir,
I am a 33 Years old salaried professional. Presently, I do not have any equity exposure and have around Rs.5 Lakh in my debt portfolio inclusive of FDs, NSCs and PPF A/c in the ratio 3:1:5. Additionally, I have investible surplus funds of around Rs. 1.5 lakh ,which I want to invest in Mutual Funds and have thought of the below mentioned plans.
Further, I also plan to invest in 2 SIP plans worth Rs.2500/- each per month which will come out o fmy monthly salary. As you can see below, I have included some debt funds also as I plan to increase the amount proportionately in the same funds in the years to come. Kindly advise whether or not I should go for it and what changes can be made in my portfolio:
Lumpsum Investments:
Large Cap Equity – Birla Sunlife Frontline Equity Fund (Growth, Direct Plan) – Rs.50000/-
Mid Cap Equity – HDFC Mid Cap Opportunities Fund (Growth, Direct Plan) – Rs.30000/-
Small Cap Equity – Franklin India Smaller Companies Fund (Growth, Direct Plan) – Rs.20000/-
Short Term Debt Fund – Franklin India Low Duration Fund – Rs.25000/-
Gilt Short Term Debt – SBI Magnum Gilt Fund – Rs.25000/-
TOTAL ——————-
Rs.150000/-
——————-
SIP:
Large Cap Equity – SBI Bluechip Fund (Growth, Direct Plan) – Rs.2500/-
Dynamic Bond – ICICI Prudential Long Term Fund – Rs.2500/-
——————-
Rs.5000/- p.m
——————-
Regards
PKA-You have not shared the time horizon. However, by referring my suggestion, you can follow the same.
I would not be needing the above mentioned lump sum amount for another 5 years
PKA-If time horizon is just 5 years, then DON”T ENTER INTO EQUITY PRODUCTS.
Hello Sir
I want to enter MF investments starting from this year, I am 30 yrs old married. No kids.
I currently hold 5 lakhs of savings in my FDs+RDs. I already have Medical insurance and Term insurance plan.
I am saving 1.5 lakhs each year in PPF and save 20k pm in RDs.
Can you please suggest if my picks are correct for entering into MF for getting most out of it after 5-7 years of time.
1. FranklinIndia Prima Plus Growth (Large CAP)- 5k pm
2. SBI Magnum Midcap Find Growth- 5k pm
Vikas-Refer my post properly and then think of what is the meaning of GETTING MOST OUT OF IT.
Ok, thanks Sir. Need your opinion if I should keep on investing in RDs or should I go for MFs.
Also, please let me know if you have personal finance planning solutions.
Vikas-It depends on many things like MF or RD. How can I say you without understanding?
Thanks sir for all your suggestions.Only one more thing are u happy with the performance of icici long term equity fund or I should switch to some other ELSS fund.If I have to switch kindly suggest me some other ELSS FUND.
Aji-What prompted you to doubt that fund?
Sir it is not performing well from last one year looking at its peer in ELSS
Thanks sir for your prompt reply. All the fund mentioned above I have invested with the aim of more than 10 years. And birla sunlife fund which I mentioned above may be read as birla sunlife front line equity fund. All the other fund are clear.
Sir plz guide now.
Aji-Increase more towards large cap and then to mid cap and finally around Rs.1,000 into small cap. Restrict your exposure to small cap as your tenure is 10 years.
Basu Sir by your advice I have created following portfolio 3 years back.
1)icici long term equity fund 4000 sip
2)hdfc midcap 1000 sip
3)birla sun life 1000 sip
4) Franklin India smaller comp fund 2000.
I have debt ammmont of around 60000 in ppf lic pli etc per annum
Thanks sir for your kind advice at that time.I n fact it is because of u I become financial literate.
Do you think my portfolio is OK at present time or u recommend certain change.
Sir plz reply
Aji-What asset allocation you are following? Also, you have not specified the full names of funds. Hence, hard to guide.
I am following 60:40 asset allocation in equity:debt
Hello Sir,
I have MF investments in following funds. All are DIRECT-Growth using SIP. Started in oct 2015.
My age is 32 and investments are for 18 years.
Axis long term ELSS – 4k/m
ICICI pru val discovery – 2.5k/m
HDFC balanced – 2.5k/m
Mirae asset emerging bluechip – 3k/m
I am handling my debt investments using PPF – 30K yearly and 2oK in FD.
Questions:
1. Is my portfolio on track.
2. I am not planning to add any other fund.
Mukul-What % of asset allocation you are following between debt and equity?
Sir,
I am following 70:30 (equity:debt). In additiona to (PPF+FD) in debt part I have one Jeewan saral LIC policy, Premium 25K per year. Policy will be expiring in next 4 years. I have no plans to surrender this policy.
Mukul-Come out from multicap and include one large cap.
Sir,
Thanks for writing.
1. Any specific reason for leaving multicap (ICICI pru value discovery).
2. can you suggest one large cap fund..
Mukul-The only disadvantage is that you can’t track their moment and at the certain stage your portfolio may be tilted more towards one market cap. Hence, better to avoid. Large cap list is available in above post.
Hi Sir, Icici Pru value discovery fund seems not performing in the last 1 year. Pl advice whether to hold or shift the portfolio to other fund.
Shiva-HOLD.
Respected Sir,
Myself Saranya Ravi a pvt. school teacher, monthly income rs.20000 pm. I am new to Mutual fund, My friend who is working in ICICI Direct account. Through his guidance I opened an account and invest the amount in below Mutual Funds as Lump sum… to hold atleastfor atleast 3 to 4 yrs for 5yrs old daughter savings.
1. Reliance Small cap fund (R) – Rs.25000 Lumpsum
2. L&T Emerging Business fund(R) – Rs.25000 Lumpsum
3. Hdfc Prudence fund (R) – Rs, 25000 Lumpsum
4. Axis Dynamic Equity fund (R) – Rs.50000 lumpsum.
Respected Sir, Now I need your valuable opinion whether the above MF investment is Ok or I have to quit from any MF or Modify any MF. Please give me your valuable reply to correct my Portfolios… Since I am very new to this MF investing. Waiting for your kind and valuable reply sir. Thank you very much sir.
Saranya-I confused with your statement. You are planning for your kids future who is currently at 5 years of age. But claiming that you want to hold this just for 3-4 years. If your intention is to hold for 3-4 years, then DON”T ENTER INTO EQUITY.
Also, investing in Mutual Funds through ICICI Direct is the costliest way of investment. Demat account is not at all required for investing in mutual funds.
Respected Sir, Thanks for your immediate response and advise me to move out from ICICI Direct. However Now, I had already invested the above MF’s last month. Now kindly please suggest me whether the above MF’s is good to holding for long term gain or is there any MF’s should be avoided or to change the MF portfolio. Awaiting for your valuable guidance.
Regards,
Saranya.R
SaranyaRavi-Good or bad you will come to know if you read above post properly like what you have to do before you jump into investing.
Hi Basu,
I need your help in guiding for a specific financial goal in my life.
For my child’s higher education after 15 years, I want to save Rs 35 lakhs.
I have around 3 lakhs in NSC/PPF in my wife’s name currently which might grow up to 10 lakhs.
So I want to build a corpus of remaining 25 lakhs in equity/mutual funds. I can invest up to 7k/month.
In the above situation, on which mutual funds should I invest?
Please guide me.
Regards,
Gajapathi
Gajapathi-Refer above post. Especially the first part of the gyaan.
Hi Basu ,
Hope you are really doing well.
Can’t thank you enough for the financial knowledge you are sharing.
I am outlining my Investment MF Portfolio with you and need your valuable insight into it. I do have a investment time horizon of about 20/25 Years. I am planning to start investing 21K (Equity:Debt: 70:30) per month in
below Funds with a yearly increase of 10%.
1)ICICI Pru Focused Bluechip Equity Fund(G) – 8000 – Large Cap
2)Franklin India Prima Fund(G) – 3000 – Midcap
3)HDFC Balanced Fund(G) – 3000 – Equity Balance Fund
4)Franklin India Smaller Companies Fund(G) – 2000 – Small Cap
5)PPF – 5000 -Debt
Kindly advise if the above mentioned funds are good to go ahead with and do i need to add any more Fund to my Portfolio.
Thanks a Ton…
Regards
Amiya
Amiya-Go ahead and review once in a year.
Thanks a lot for your help….
Sir ,
I have a sip of 5000 per month in ICICI VALUE DISCOVERY FUND for the last 3 years.
The fund is not performing well for the last 1 year .
The AUM has also become enormous:17000cr.
Shall I stop my sip? And start in another multicap fund.
Is the gigantic AUM causing its downfall?
Please advise
Regards
Sameer
Sameer-How you felt that fund is under performing? What was your expectation while investing? How much is the fund generating? There is a misconception that AUM harm the performance. But do remember that such theories are copycat of the foreign market (which is much bigger than ours).
hi,
what is your advise with regard to starting new SIPs in funds which have stopped taking lumpsum investments and restricted monthly investment values? Probably the fund manager is already overburdened and is it wise to stay away for new investments?
There are some conflicting reviews about HDFC mid cap opp fund, FI prima funds. DO you suggest fresh SIPs in these funds?
Sreenivas-Do you think that particular ONE fund is the UNIVERSAL BEST? Don’t be so attached to fund, fund house or fund manager. You have to think what is required for YOU.
Hi Basu,
I am having 4000 monthly SIP of ICICI Prudential Focused Bluechip Equity Fund – Growth.
Last week I decided of adding 4000 more to this existing SIP but by mistake I created a SIP for ICICI Prudential Focused Bluechip Equity Fund – Direct Plan – Growth
Queries
1) Please let me know if returns are same for ICICI Prudential Focused Bluechip Equity Fund – Growth and ICICI
Prudential Focused Bluechip Equity Fund – Direct Plan – Growth.
2) Please suggest shall I stop the SIP for new Direct Plan – Growth and again create ICICI Prudential Focused
Bluechip Equity Fund – Growth.
Regards,
Rishi
Rishi-1) Direct scores more return over regular around 1% to 1.5%.
2) First understand the difference between DIRECT and REGULAR, then we discuss further.
Thanks Basu. Looks everything same in terms of portfolio. May be I wl continue with this Direct plan 🙂
Rishi-Better.
Hello Sir,
I kindly require your valuable advise on the below doubts with respect to MF investing only.
Let say I am 30 years now and i want to invest in mutual fund for 20 years,
Risk appetite – High,
Say i can start with 5k p/m & and increasing with certain % on yearly basis, with expected return of 10% to 12% at the end of 30 years (i.e, 20year investing & 10 year wait period =30years total, as I require the amount from my 61st year. )
So further going with allocation on the basis of 70 : 30 (Equity : Debt) –
1) Franklin India Bluechip Fund (G) – 2k p/m
2) ICICI Pru Value Discovery Fund (G) – 1.5k p/m
3) Birla Sun Life short term fund – 1.5k p/m
Now my question is :
1) Am I on the right direction towards investing in MF as per above details? If yes
2) Is the allocation ok or do I have to add or delete anything
3) Can I transact through AMC online or MFutility as I can monitor on my own.
If any other suggestions please advise
Kindly waiting for your kind reply.
Regards.
Madhu-Your investable amount is less. Hence, we can’t select each category of fund. However, better you include one large cap and one mid cap in equity. In debt, you can either use PPF, EPF or Ultra Short Term Debt Fund. Better to use MFU as it is one place for all your funds to review and monitor.
Hi Basu
Hope you are doing well
I am a beginner and wants to invest in Mutual funds, already gone through with your post and suggestions however not sure how and where to start. Target is to have enough money for kid education by 2028 which is 10 years from now
Just to give you a background –
1. Already having a PPF account with nominal savings say 1K per month and thinking to increase
2. LIC Jeevan Anand with 7 Lac sum assured
3. Term insurance – don’t have & wanted to buy
4. Medical insurance – Only corporate, should I buy personal as well?
Jasvinder-What is your doubt after reading above post. Can you raise those specific questions?
Hi –
Need suggestion on following, my target is 10 years from now
1. Equity – which MF to start with, large/mid/small or balanced. I am targeting Franklin with 5K-10K per month, please suggest
2. Debt – Is 1ooK a year in PPF sensible or should I think something else as well
3. LIC – Should I keep it till maturity or surrender it now, I am having 2 Jeevan Anand (3ooK & 400K sum insured for 16 years and 21 years respectively initiated in 2009 & 2010)
Jasvinder-1) One large, one mid and small portion of small cap.
2) Your time horizon is 10 years, then how can a product which is 15 years (PPF) suitable for you?
3) In my view better to surrender.
Sorry, I forgot to mention that PPF account is 5 years old so I would be able to withdraw by 2028 hence asking for 100K-150K of deposit for remaining period. Also while going through internet, it seems depositing yearly amount between 1st to 5th April every year will yield maximum benefit in PPF.
Requesting your guidance
Jasvinder-Then you can use PPF as debt part. Yes, investing before 1st to 5th of every month or in April has some advantage.
HI Basu,
Recently only i came to know about your website. I found it very interesting and very helpful in improving our financial knowledge. I have following funds with me. Please let me know your inputs:
SBI Bluechip (1000 SIP)
DSP BR Focus 25 (1000 SIP)
ICICI Value discovery (1000 SIP)
HDFC Mid cap (1000 SIP)
DSP Micro cap (1000 SIP)
TATA Tax saving (1000 SIP) – Though i have selected this fund for tax savings. But since i invest in PPF, so i don’t need this fund.
ICICI Balanced fund (1000 SIP)
Birla sunline MIP Savings 5 – dividend payout (For lumpsum investment)
Problem is that i don’t have clear objectives for my investments. My only objective is to maximize my returns in the SAFEST manner. All my investments are long term.
Please let me know your inputs.
Saurabh-Can you define what is MAXIMIZE returns and SAFEST manner?
by maximize i want to point out interest rate scenario that we have today. Icici is offer 6.75 ROI and considering that i am in 30% tax bracket, i hardly make any money from FD’s.
That is why i am looking for other investment options (after exhausting my PPF limit) that can give me better returns. Since i am looking for long term investment, so equity exposure seems OK to me.
SAFEST – Here i believe that markets are very high these days. I want to be bit cautious while investing. Birla sunlife MIP i have chosen as a alternative of FD. Not sure if my decision is good.
Saurabh-Whether MIPs are safest? Above that which is SAFEST? The art of INVESTMENT is art of managing RISK. Don’t chase returns based on the market cycle. But go for equity and debt based on the time horizon of the goal. This is what I explained in above post.
Hi Basu I hope you are doing well thanks a lot for the valuable article I will be starting SIP as an example, I have 100 INR amount invest per month , time horizon 10 Years+ for all and Equity to Debt ratio 70:30
35 INR SIP PM in SBI Bluechip G
21 INR Mirae Asset Emerging Bluechip Fund (G)
14 INR SIP in DSPBR micro cap fund G
Debt:-
30 INR PM in PM time horizon again 10+years , if there is any Fund that can be better that it on second best please advise also
1. Please advise if you think there is some correction needed
2. Please advise if I have to top up the funds by parking some surplus money with similar time horizon objective, can i follow same pattern
3. Please advise if you have to change any funds in Debt and Equity
4. Please advise how to allocate balance fund like HDFC Balanced Fund (G) by exchanging any of above
Shahnawaz-It looks fine. But for DSPBR fund as of now you can’t invest. Regarding, debt, what product you selected? Whether it is for SIP or top up, you can use the same funds for the set time horizon with same asset allocation.
Thanks can you replace DSPBR with HDFC Balanced Fund (G) please advise or suggest anything else
In addition please advise any DEBt for 10+ years time horizon still not able to finalize although read your article
Shahnawaz-My list is already shared in above post. You already asked that doubt regarding debt funds in another post. Please refer my reply.
sir i 47yr, I am investing given below funds. Do you think my portfolio is ok or should i change?
Please Reply
Thanks in advance.
BSL Resurgent India Fund Series 1 Growth Regular
Sundaram Select Microcap SR 9-5 Year Regular Growth
HDFC Long Term Advantage Fund Regular Plan Divident
HDFC Mid-Cap Oppertunities Fund Regular Plan Growth (SIP) Rs.1000/m
HDFC Balanced Fund Regular Plan Growth-(SIP) Rs.3000/m
ICICI Prudential Value Disvovery Fund Growth (SIP) Rs.1000/m
IDFC Balanced Fund Regular Plan Growth (SIP) Rs.1000/m
IDFC Dynamic Equity Fund Regular Plan Growth (SIP) Rs.1000/m
IDFC Tax Advantage Fund (ELSS)Divident Regular Plan (SIP) Rs.1000/m
Kumar
Kumar-Without knowing time horizon of goal, asset allocation, and your personal finance life, it is hard for me to guide anything.
Dear basu.. lot of people asking for funds for goals.. many of Ppeople like us dnt know how to set goals which are more practical.. i request n suggest u give some time and write an article about setting goals n accordingly choosing funds. Some very generic goals with different aged people as example… so that most of us can get clear picture of Goals n funds for them… i thought after reading the new article people can ask u specific n clear questions….
Thanks
Prashant-Thanks for your inputs and definitely I will come up with an article on this.
Hi Basu first of all thanks a lot for this great article and advice, in your article as you advise the one should invest in maximum 3-4 funds based on goals , but I just need to know how we can choose between large cap, multi cap I mean can those 3-4 fund can be all all multi cap or large cap or mid cap or one fund from each category e.t.c
In addition talking of about debt:equity as 30:70 , debt here can be one of of debt mutual fund in your other posts or it should be only bank FD, RD or PPF or it should be mix of both, how to mange this
Appreciate your advice
Regards
Shahnawaz-One large, one mid and one small cap fund enough for equity. It can be any debt product like FD, RD, PPF, EPF or Debt Funds (based on your goal time horizon and comfort with the product).
Hi Basu,
Appreciate if you could write an article on the way to rebalance mutual fund portfolio year on year basis.
Ajith-Thanks for your inputs. Surely I will write a post soon on this.
Hi Basu,
Whats your opinion for ETF equity fund and index fund. They are good for investing for 20 years?
Naveen-It may be but the problem is liquidity.
What problem liquidity? I new to mf can you elaborate?
Hi I am 35, Started investing this year. Currently have the following SIP’s
HDFC Prudence Fund – 2000
Birla Sun lime Small & Mid Cap – 2000
ICICI Pru Value Discovery – 1000
Mirae India Opportunities fund -1000
I am planning to add a liquid fund and also Blue Chip fund to this portfolio. Planning Franklin BlueChip & Birla Sun life Cash plus.
Your advice?
Time Horizon 20 years
Subramani-What allocation % you are performing between debt and equity? If time horizon is 20 years, then why the liquid fund? Whether you checked the overlap of the portfolio in the existing investment?
Basu,
Thanks for your reply.
I am planning to shift a portion of my emergency funds to Liquid fund. The Liquid fund I am planning for a year to 18 month SIP of Rs 5000 and then let the investment continue.
I have not really checked the portfolio overlap. Will do so over the weekend. I have an MIP which focuses on debt funds at around Rs 4000 per month.
I am fine with a riskier portfolio in my first 10 years as I want to maximize the returns over the 10 year period, before rebalancing.
So I was thinking my Portfolio lacks a largecap/bluechip fund and obviously the liquid fund for the near-term.
Subramani-But do you feel HIGHER RISK ALWAYS LEADS TO HIGHER RETURN??
Well I do not mean a 20% return as a high return. I would be happy between 12%-15% return over the next 10 year period. Which I think is reasonable on these funds.
Subramani-Then go ahead if you are confident of.
Dear Basu,
I am 36 and planning to invest Rs.10K per month in the asset allocation between Debt(30%) and Equity(70%)
Time Horizon – 10 years for my Kid’s education and marriage
Planning to move all my matured fixed deposits close to 1.5L in MFs
So far, my MF SIP investments for the past year are split-up accordingly
With Motilal Oswal – 30 K
———————————-
SBI MAGNUM MULTICAP FUND (Exit load period not over yet)
RELIANCE SMALL CAP FUND – GROWTH PLAN ((Exit load period not over yet)
RELIANCE TOP 200 FUND – GROWTH PLAN (Exit load period not over yet)
With Motilal and Funds India
——————————–
SBI BLUE CHIP FUND- GROWTH
With Funds India – 1.25 L
————————————————
Birla SL Dynamic Bond-Fund-Reg
Birla SL Frontline Equity Fund (G)
Birla SL Treasury OPtimizer Plan (G)
Franklin India Prima Plus Fund (G)
HDFC Balanced Fund(G)
Mirae Asset Emerging Bluechip-Reg(G)
I have gone through your post which made me think to regulate my MFs.
I am planning to move all my existing MFs to Zerodha (or) MF Utility
Large cap
—————–
Franklin India BlueChip
Mid Cap
——————————-
HDFC Mid Cap Opp Fund (G)
Ultra short term or short term gilt debt funds
———————————————————
Franklin India Smaller Companies Fund (G)
Need your suggestion,
(1) If I had made right decision to move all MFs to mentioned diversification
(2) Your thoughts on Zerodha and MF Utility
(3) Should I invest some amount in PPF also ?
(4) Is it worth to move Reliance and SBI Magnum before exit period gets over ?
Dear Basu,
Could you please confirm if the distribution looks fine ?
Ramanathan-For 10 years goal, make sure to have proper asset allocation. Yes, your final fund selection is good for equity. But for debt choose ultra short term debt fund or short term gilt funds. In my view MFU is best than Zerodha as MFU is completely free. Your goal time horizon is 10 years but PPF is 15 years product. Hence, this product is not suitable to you. Stick to 2-3 funds in equity and one fund in debt. This much is enough.
Dear Basu, Thanks for your suggestion.
My Asset Allocation- Equity- 70%- Debt 30% Out of 70% in Equity, 40% in Large Cap and 30% in Mid-Cap and
Out of 30% in Debt-Ultra short term or short term gilt debt funds, I thought
Franklin India Smaller Companies Fund (G) is the one. Can you please confirm ?.
Also, For 15 years plan,
I am investing Rs.2000/- in Sukanya Samriddhi account for my daughters marriage.
If it’s for 15 years, Can I continue with Sukanya Samriddhi investment or I can opt for PPF
Ramanathan-In Equity-50% in large, 30% in mid and 20% in small cap. Your debt is OK. I am not fond of this Govt scheme. Because I feel now this Govt launched it and giving highest return. However, if Govt changes then they may not be so aggressive like this Govt. Instead, I prefer PPF.
Hi Basunivesh,
I would like to invest in below funds:
for large cap : ICICI Pru focussed blue chip Equity fund (OR) – SBI blue chip – Rs5000
Mid cap : HDFC Mid Cap Opp Fund – Rs5000
Small Cap : DSPBR Micro Cap Fund (G) – Rs 5000
Can you please suggest any better funds in the above categories. As i am new to the invest methods, could you please let us know at where i need to invest these funds or whom to contact for investing of SIP
Please let me know.
Phani-What is the time horizon? What asset allocation you are following?
Hi Basunivesh,
I am looking for 15 years and 18 years. I am following debt:equity as 20:80
Phani-Go ahead but DSPBR fund is temporarily stopped accepting fresh investment.
hello sir,
I am planning to invest 14000/- in mutual funds by monthly sip. time horizen– 18 to 20 years..I choose following funds in different categories
Large Cap:-
1.. Birla Sun Life Frontline Equity Fund
2. Mirae Asset India Opportunities Fund
Small Cap:-
1. Reliance Small Cap Fund
2. Franklin India Smaller Companies Fund
Mid cap:-
1. Mirae Emerging Blue Chip Fund
2. dsp small & midcap fund
3 HDFC Mid Cap Opp Fund
Kindly comment on these chosen funds.. if possible suggest some more good funds.
Arun-Why not single fund from each category also refer above post and do asset allocation between debt and equity.
Because of market risk and performance of every fund.. I think every fund performs in their own way..it may be possible if one fund is not performing ,choosing two funds in one category may minimize the loss. This is my opinion. I invest 1.5 lakhs every year in PPF also..
Arun-In my view, hold single fund which is best track record, give enough time for fund to judge before jumping or quitting. Doing re-balancing and reviewing once in a year are best. May be I am biased. But I love to simplify the investment from those experts who made it as if ROCKET Science 🙂
Sir, you are right. Investments should be kept as simple as possible. I am new to mutual funds. So don’t have much knowledge about judging the performance of a fund.. can you please tell me how to judge the performance of a fund..
Hi arun, I am also a newbie… i came to know about few ways to choose by my financial freinds spurce.. i.e. see the track record of 1yr and 5yr returns and ranking… and ur intution… but past performance cant ensure future ..but its one of the ways may be to choose… Basu might give better insights… thanks
Prashant
Prashant-I am of the opinion that holding single fund is better as holding multiple funds with same underlying stocks or with the same benchmark may hardly give any diversification. However, if your fund is continuously under performing the BENCHMARK (not it’s peers), then you can think of switching. Whether you invest in 1 fund or many funds, tracking and managing risk is more important.
I use rolling returns for 3yrs to choose the best fund from each category.
Jerry-Do you think 3 years return suffice to judge a fund?
hi. iam 42yrs now and am planning to invest in SIP MF. Goals are retirement/child education 18yrs (for both). I have allocated 30% for debt in form of PPF,NPS and debt funds. Planning to invest remainder in equity.I can spare about Rs 50000 monthly for the same . I am considering to invest in following funds; Large cap-Kotak select focus & BSlife frontline equity: Multi cap- motilal oswal most 35, Midcap–mirae asset emerging blue chip and HDFC opp. Small cap: REliance small cap. What is your opinion about fund selection? I am having some confusion between BSL Fe and SBI blue chip . also Between HDFC midcap opp, reliance small cap, FI small co, DSP BR small and midcap.
Suresh-One large cap is fine and I suggest either Birla or SBI. In mid cap I am inclined towards HDFC. In small cap DSPBR.
Hi–thanks for reply.
I have 2 doubts:
1. just like mutual fund returns are influenced by market performance, what is the effect/impact of the funds on the market performance?
2. considering even the worst crashes of market, how much would actually one loose by investing in mutual funds ?He might not get the expected returns, but will he really loose out all?
Suresh-1) It is exactly like few chasing many or many chasing few. But in the current scenario, I don’t think a single fund can turn the market. It is collective money across all AMCs, which may impact.
2) Anything can happen. Hence, the art of investing is the art of MANAGING RISK but not chasing returns.
You really write well. I have seen lot of blogs on this subject but yours was the most logical and articulate. I also read your Jeevan Umang review which my LIC agent has been asking me to buy and of all reviews on the net, yours was the best.
Harinee-Thanks for your kind words.
Hello Sir,
Nice Informative article with many queries and quick responses! Truly appreciate!
I have LIC policy with yearly premium of 16500/y, PPF of 470000 (because of decreasing interest rates, I add just 1K/y in it now onwards, maturing in 2022)
Started to invest in Mutual Funds from last 2 years only.
MF Lumpsum are as below:
DSP Micro Cap: 30000
DSP Small & Mid cap – 5000
Franklin India Opportunity – 20000
Franklin India Smaller Company – 20000
DSP Small & Mid cap: 2000 SIP from last 3 months
Franklin India Smaller Company – 2500 SIP from last 4 months
Goal: 10 years (Minimum)
Monthly desired investment – 10000
Please suggest me if I am doing right or which funds I should Switch/add new?
Kindly appreciate your help!
Thanks,
Tanvi
Tanvi-What asset allocation you are following? Refer above post properly and do start investing.
Hello Basuji,
Asset allocation is 30:70. For 30% Debt, I have PPF, LIC etc. I am looking forward to buy some equity based Mutual Fund. But confused about which one to select to get maximum wealth creation benefit. Can you please help me in selection?
Thanks in advance…
Tanvi
Tanvi-One large cap, one mid cap and one small cap in the ratio of 50:30:20 is enough.
Hi.. i am little worried/confused.. why do u suggest only 1 fund in each catagory? Many funds have not given verygood/good returns but few have given best consistanly… and future depends on market and mainly the thinking of fund manager…. if we choose one smll cal… arent we taking risk with on find manager?? If he fails to tackle right stocks… growth is not expected… but if we choose atleast 2 good funds in each catagory…doesnt that make better risk diversification??
Prashant-If both funds tracking the same index as their benchmark and if the particular fund is not beating it consistently, then you have to think of switching. However, PEER comparison is the biggest enemy in investing. Also, do remember that whether you choose SINGLE or 10 FUNDS within the same category, no fund will be BEST forever. The art of investing is the art of managing risk. Stop chasing funds returns. But concentrate on fund returns. If the fund is generating your expected return, then why to worry? Also, invest in equity MF does not mean you invest today and forget for next 10 years. You have to review and do rebalancing activity once in a year.
HI Basu,
I m planning to invest my monthly in different sectors i.e mutual funds, PPF and in other investment. Kindly guide me which are good for above 15 years.
Looking for the response.
Rahul-Combination of PPF and equity mutual funds based on above asset allocation.
SIR CAN U PLS LET ME KNOW HOW MUCH % I HAVE TO INVEST IN PPF, SIP , MUTUAL FUND AND OTHER
Rahul-The asset allocation is already explained in above post.
Dear Basu,
I am a 33 year old guy. I am getting Rs. 3 lakh after the maturity of my LIC policy. And I want to re-invest that amount for my family’s future. I don’t know much about mutual funds so please guide me.
My goal is to gain maximum returns.
Time horizon is 15 – 20 years.
Risk level is moderate.
So, please tell me that should I invest this amount in SIP or as Lump sum and in which funds so that I can get maximum returns??
Thank you in advance.
Sagar-Your all doubts are already answered in my above post. Please read each word cautiously.
Dear Sir,
Please look into my portfolio and correct me if anything in wrong. My Time Horizon for all is 10 years.
Debt Portfolio.
1) Bank RD – 10k per month
2) PPF – 1.15 lacs invested so far as on 10/07/2017.
3) Tax Saver Bond in Bank – 50k (lock in period – 5yrs)
SIP – Equity portfolio:
1) SBI MAGNUM MID CAP FUND(DIRECT GROWTH) – 50k (Lumpsum investment)
2) SBI Bluechip Fund (Direct Growth)- SIP : 2k/month
3) HDFC MidCap Opportunities(Growth) : SIP : 1k/month
SIP MF : ELSS Funds (For Tax Saving Purpose)
1) Franklink India Taxshield (Direct-G) – 1k/month
2) Birla Sunlife Tax Relief 96 – (Direct -G)- 1k/month
3) UTI-LONG TERM EQUITY FUND (TAX SAVING) – DIRECT GROWTH PLAN- 2k/month.
In addition to above I would like to start for investment of 1k/month as SIP in HDFC Balanced Fund(Direct-G).
So, Total- 18k Investment/month.
Sry for the long post, please advise whether my portfolio is correct and also advise me regarding new fund HDFC Balanced Fund in taking new SIP.
Thanks Sir.
Shashikant-What asset allocation you are following? Why 3 ELSS funds than a single? If already managing debt and equity separately, then why a balanced fund? Asset allocation can be following as above. Also, 3-4 funds enough (including ELSS).
Good evening sir. By comparison, which one of the following is better for long term i.e more than 10 years? Sbi blue chip vs Kotak select focus. Size of both funds are above 10k Crore. Some sites mentioning that Kotak select is multicap and some sites as large cap / diversified. Which one is correct? Large cap or multicap
Raj-Kotak is a multi-cap fund, which has the mandate to move any cap as per the market condition. Better you choose the large cap.
Hello Basu,
Thanks for such a in depth article. I need to take your suggestion on my current portfolio. I have invested in 3 mutual funds :
1. BSL Frontline Equity Fund – G
2. Franklin India Prima Fund- G and
3. DSP BlackRock Balanced Fund – G
I am currently 24 yr old. i have started investing in above funds @1K/month for about 1 year now. I need to invest more. I am thinking to go for : Franklin India Bluechip Fund- G and DSP Micro Fun (1K/month each). Then I shall more invest in these funds only in coming years.
But I am confused that already having 2 equity funds ( sr no 1 &2) in my fortfolio, should I go for a equity-balanced fund(HDFC Balanced) instead of Franklin India Bluechip.
Your suggestion shall be highly appreciated.
Thanks,Chirag
Chirag-Without knowing your time horizon, it is hard for me to guide.
I want to invest for long term (10-15 years).
Chirag-There is a huge gap of 5 years in your assumptions of 10-15 years. Be specific with your goals. It is your money and hence you must have proper planning.
15 years.
Chirag-If your time horizon is 15 years, then first set asset allocation. Then for debt, use PPF or Ultra Short Term Debt Funds. For equity, one large cap, one mid cap and one small cap. Enough
Hi Basu,
This is Deepak,
My current age is 31 and i want to retire @ 55 and 40k/month.
I am planning for my baby next year and want save for education and marriage.
Kindly guide for well plan for it.
I have a PPF of 50K has been deposited.
I have a mutual fund investment of 3K in Axis Bank Long term investment(G) as an SIP.(suggested from you 🙂
And PF around 3lac and some portion is being deposited to it every Month.
Kindly guide me to do the right investment.I Can invest 15-20K/month.
Is it suitable to go with Mutual funds or Stock Market investment?
If You suggesting me Mutual fund then suggest me which funds should i select and for how many years and price point.
Is stock trading a good option ?
Can I put some portion in Traditional plan as well ?
Deepak-You identified your goals, the next step is to read the above post properly. You will get all answers. If you still have doubts, then you can raise the issue here.
Hi Basu,
That is so kind of you for the response.
I have choosen HDFC MID-CAP opeertunity fund-4000/M
SBI BLUE CHIP-3000/M
Mirae Asset India Opportunities Fund – Direct Plan (G)-2000/M
AXIS LONG TERM EQUITY FUND(ELSS)-3000/M WHICH IS RUNNING ALREADY
Now I am thinking should I opt for Balanced fund or Multi-cap fund for 3000/m
01.Please share your views on the above portfolio,If any changes required,please tell.
02.Should I go for balanced or for Multi-cap fund for my portfolio.
Thanks in Advance.
Deepak-You set the goal and you know time horizon. Now the next is to do asset allocation and identifying the funds. Do this exercise and let me know the result. Sorry for giving you the task. But I want you MUST learn instead of going for readymade answers. If you have doubts in this, then I am here to guide you.
Hi Basu..
Thanks for educating me.
As per your advice i made my investment 30:70(Debt:Equity) as my horizon is over 10 years.
And I have planned for invest 20K per Month as SIP.
30%=6000 and I am investing 2k/M in PPF and rest are yet to decide, as PPF intrest rate is decreasing day by day i am investing only 2k/M.
For Equity part I have choosen one midcap and for cushioning I am opting a Large cap.
And for that I have choosen the above funds.One Large cap and mid cap and for the rest debt part i am thinking to opt the balanced fund to cover.
Please correct me if I am wrong and provide guidance.
Thanks.
Deepak-Now you are on right track. Even though PPF interest rates are down, but the tax efficiency over other products and the current inflation rate makes it still attractive. Hence, if your time horizon matching the maturity of PPF, then I suggest using PPF.
Thanks much Basu..
Please answer about my other query also.Should I go for Balanced fund for the debt part as I am opting Large-cap and Mid cap for equity.
Thanks
Deepak-You can opt for balanced fund only when you know how much is your overall debt and equity portfolio.
Hi Basu,
Its seems that DSP BR Microcap has put a hold on fresh flow to the micro cap fund after Feb 17. Your take on this please
http://economictimes.indiatimes.com/markets/stocks/news/dsp-blackrock-stops-fresh-flow-to-microcap-fund/articleshow/57138090.cms
Regards,
Amit
Amit-Yes, as of now only existing SIP investors were allowed.
Hi Basu
Can you suggest an alternative to the DSP BR Microcap Fund for new investors? I understand Canara Robeco Emerging Equities Fund is also part of your list, but I dont think its listed in MFU
Is there something that you would recommend?
Regards
Paromita
Paromita-If the fund you said not listed in MFU, it does not mean you must stay away. You can go ahead directly with the concerned AMC portal and start investing.
hello sir
I have strarted investing in MF’s through SIP from last four months through financial advisor. I came to know that they are under REGULAR GROWTH plan. When I browsed the difference between REGULAR vs DIRECT, I felt I have done mistake by adopting GROWTH plan because commision to advisor will be deducted from my returns. What should I do now, shall i change plan through advisor or stop them and start new one freshly.
Srinivas-First understands whether you can manage everything on your OWN or not. If you are capable doing clerical work related to MF investment and also can handle the portfolio on your own like review and all those things, then go ahead to DIRECT. Otherwise, stick with good adviser (I am not saying to stick with the same adviser).
I beleive clerical job will be one time at the starting of MF’s. Will there be any work after starting MF’s through direct plan
Currently I am investing 12000 per month, if an average return of about 15% is considered then I would get 1.53 Cr at the end of 20 years. What is the difference in direct plan vs regular plan returns after 20 years.
Srinivas-It may be around 1% returns.
Srinivas-Nothing but the important task of reviewing your portfolio understanding the fund performance and all those stuff.
Hi Basu,
While selecting the scheme name under MF SIP creation in HDFC securities, I see four almost similar plans .
For instance, Birla Sun Life Top 100 Fund – Growth Direct Plan, Birla Sun Life Top 100 Fund – Growth Direct Plan1, Birla Sun Life Top 100 Fund – Growth Plan, Birla Sun Life Top 100 Fund – Direct Plan.
1) Please advise which among these 4 is better and if you could please elaborate on the difference between Growth Direct Plan and Growth/Direct plans.
2) What is your suggestion on the performance of Birla Sun Life Top 100 Fund Growth.
Regards,
Amit
Amit-1) Check whether HDFC Securities offers you DIRECT funds. In my view, NO. Also, selecting direct or regular depends on your comfort with MF. Hence, choose the regular or direct based on that.
2) Without knowing much about your reasons for investing or time horizon, it is hard to say whether it is good fund or bad.
Hi Basu,
Thanks for your reply.
My time horizon is 10 years, I am a moderate investor with the goal of achieving at least 10% returns after the maturity of the funds.
MF Summary for 20K/year
1) Large Cap : SBI Bluechip (4K), Birla Sun Life Top 100 (1K)
2) Multi Cap : ICICI Prudent Value Discovery (3K)
3) Mid and Small Caps: Mirae Asset Emerging bluechip direct growth (2K), Canara Robeco Emerging equities direct growth (2K) & DSP BR Microcap (2K)
4) Balanced: HDFC Balanced (6K)
Does it look okay to you?
Regards,
Amit
Typo 20K/month*
Amit-What asset allocation you are following between equity and debt?
Hi Basu,
My current asset allocation is Equity(70%) and Debt (30%).
Regards,
Amit
Amit-In that case, one large cap, one mid cap and one small cap from the funds you already investing are enough.
Thank you so much Basu for your expert opinion.
Once I have purchased the mutual funds, how often I should monitor and any specific aspect to be tracked?
Regards,
Amit
Amit-Once in a year review of the portfolio is a must.
Thank you again Basu for your extended support.
In the current article, you have mentioned that, If a fund clears all these tests and gives you around a minimum of 80% score since inception, it is given a green signal from you.
I would like to understand and learn, I can calculate the below parameters for a fund on my own and analyze. If yes, please guide me.
• Beta
• Standard deviation
• Alpha
• Sharpe Ratio
• Sortino Ratio
• Treynor Ratio
• Information Ratio
• Omega Ratio
• Downside deviation
• Upside potential
• R-squared
• SIP Returns
• Lump Sum Returns
Regards,
Amit
DIY (Do It Yourself) investment does not mean calculating all these parameters. There are sites that do these calcs like moneycontrol and valueresearch. Your responsibility as DIY investor is to check these sites and get these values for the funds you selected. Then decide whether to redeem or stop SIPs or continue SIPs. It’s even easier if you create your portfolio in moneycontrol with fund name date of purchase cost etc. They will tell you how good is the performance. Dont review daily. Once in six months is enough.
Jerry-Do you think the ratings by these portals are reliable??
Amit-Yes, you can calculate.
Hi Basu
I am holding
Birla Sun life equity front line
UTI equity
ICICI value discovery
Franklin india small companies
I am planning to add
DSP blackrock micro fund
Mirae asset india oppportunities
HDFC balanced fund in portfolio ..is it a good idea .what is your suggestion ?
Also is it worth investing in UTI euity fund or I can switch to some other fund
Kuldeep-Without knowing your time horizon, asset allocation and how you selected these funds, it is hard for me to guide.
Hi Basu my time horizon is long term more than 10 years
Also I have no debt allocation in funds as that’s taken care by pf/ppf/liquid cash
Kuldeep-I am not sure why you want to hold two funds within the same category. Instead, use one large cap, mid cap and small cap.
Hi Basu,
I started investing in MF recently. I have made asset allocation of 70:30 (Equity : Debt) for my 10 year goal. My portfolio in equity is 60:30:10 (Large:mid:small cap). I have two queries.
1. I am not able to start SIP in Ultra short term fund (Birla SL Floating rate fund-long term). Birla call centre says it is not possible. Then how to go about investing monthly?
2. Is it right time (bear market) to pick and invest in a mid and small cap fund?
Pappu-1) What they are saying? If you are unable to do that with Birla, then why not move to others?
2) If you did the proper asset allocation for your long term goals, then the current status of the market is irrelevant.
Hi Basu, Thanks for ur reply.
1) The Birla call centre says- It is a liquid fund, try investing lump sum. But when I purchase lump sum from the same folio, it says your invest is worth 7 lakhs, please visit our office or CAMS centre with KYC details.
2) I agree, as it is going to be an SIP.
Pappu-Whether you are KYC complied? If not, then I think the limitation in your case is due to KYC issue. Check and complete the KYC issue.
Currently, I am investing an amount of Rs 10000 in all the funds selected below through Funds India. Could you please high-light your though on this. My goal is to invest till 15 -20 years
MOTIAL OSWAL MOST FOCUSED 25 FUND – 2000
MOTIAL OSWAL MOST FOCUSED MIDCAP 30 FUND – 4000
MOTIAL OSWAL MOST FOCUSED MULTICAP 35 FUND – 4000
Akash-Where is asset allocation and why all within same AMC??
HiBasu! I wish to invest Rs 1 lakh in lumpsum for 5 yrs may be 50k-50k each if u suggest two good funds.A balance mf will be a good option??Or should I invest in short term gilt funds.Time horizon may be increased to 7-8 yrs.
Shekhar-You can invest around 70% to 80% in ultra short term debt fund or short term gilt fund. Rest 20-30% should be in a single large cap fund from above list.
Basu Thanks for your quick response.. Could you please be kind enough to specifically advice one fund in each category for lumpsum investment.
Thanks in advance…
Shekhar-Refer my above post and also for debt funds, refer the post “Top and Best Debt Mutual Funds in India for 2017“.
I have gone through your post re – debt mf (very informative article)and decided to invest as follows:
35000-sbi Magnum gilt fund
65000-Frankline Ind blue chip fund
A.Kindly advice if it is a right choice.
B.Money is ready to invest but hesitating to invest right now as market is at highest level and I’m investing lumpsum.Is it right approach ?? Should I invest rt now or wait for around a month??Kindly suggest
With regards,
Shekhar
Shekhar-If your goal is long term and you did the proper asset allocation, then if you still feel the fear, the option is to spread this investment for the next 5-6 months.
Hi Basu, u have give nice detailed info.thanks for the info . I have few doubts.
As you are suggesting to go with only few funds i.e. 1 or 2 funds in large/small/multi etc… in this case if somehting goes wrong with AMC/Fund manager or stoks they have invested in just like Tarus liquid fund…most of the % profic/capital of the investor is lost/reduced. But when in if we choose multiple funds of different AMCs with different asset allocation this chance of drastic loss is reduced right? for example i want to start SIP of 30k monthly. and i choose 15 funds. in that 8-10 equity funds spread across with all AMCs, and all caps without much overlap. and remaining liquid,short, ultra short, long term, bond, gilt funds. So this profolio is much more stable and diversified than having only few funds inspite of having multiple good options in the market?!!? only thing is managing all of them could be little difficult if all are in direct mode. But doesnt above analysis make sense?? pleasae give your views.
thnaks
Prashant
Prashant-Whether you checked those 8-10 equity funds overlap? Check with the same category of a fund (like a large cap with large cap), then tell me the % of overlap. Your answer makes us to discuss more on this. When checking overlap, if you compare large cap with mid cap then sometimes it may be less than 10% overlap. But if you compare with same market cap funds, then you will find the % of overlap.
Hi Basu, please find my views here,
Below is my planned profolio with full diversification:
please give ur views n modifications
Share : Debt = 37.78%, Equity = 60% Others= remaining
diversification:
Giant 23.91
Large Cap 19.99
Mid Cap 31.45
Small Cap 23.37
Tiny 0.28
Not Classified 1.00
Equity funds
Small
1 SBI Small and Mid Cap Direct-G
2 Reliance Small Cap Direct-G
3 L&T Emerging Businesses Direct-G
Mid
1.Birla SL Pure Value Direct-G
2.Mirae Asset Emerging Bluechip Direct-G
3.HDFC Mid-Cap Opportunities-G
Multi
1.Motilal Oswal MOSt Focused Multicap 35 Reg-G
2.ICICI Pru Value Discovery-G
Thematic
1.Reliance Pharma Direct-G
2.DSP BlackRock Natural Resources and New Energy Fund – Direct Plan
3.Franklin Build India
Balanced
1.ICICI Pru Balanced Direct-G
2.L&T India Prudence Direct-G
Index
1.ICICI Pru Nifty Next 50 Index Direct-G
Debt
Liquid
1.Indiabulls Liquid-G
2.Birla Sun Life Floating Rate Fund – Short Term Plan – Direct Plan
Ultra Short term
1.Franklin India Ultra Short Bond Super Inst-G
Income
1.UTI Bond Direct-G
2.ICICI Prudential Income Plan – Direct Plan
DynamicBond/Corp Bond
1.ICICI Prudential Long Term Fund – Direct Plan
MIP
1.Birla SL MIP II-Wealth 25 (G)
And i checkd and analysed overlap within the same catogary many times with different tools like
http://fundpicker.thefundoo.com/Tools/PortfolioOverlap
the maximum overlap i saw was between hdfc midcap oppor fund and Mirae asset emrging bluechi which is around 30%. remaining all combinations are below 10% or around it.
please give your views and sugggestion about above given portfolio which is much more diversified to manage losses and get avarage profit…. please correct if any of my views are wrong..
and i am new to this fianace field, from few months i am analysing and trying to invest….
thanks
Prashant-Without knowing your time horizon, how can I say which is suitable to you? Also, why multiple funds within a category??
Hi basu. Here are my few goals.
1. Emergency fund – build time 1year.
2. Refund of loan from relatives 2lakh time period 1-2 years. 3. Home/flat – 20lakh period is 4years.
4. Toure amount 2lakh, time period is 3years.
How do u attach above given funds to each of these goals?? Which fund suits each goals..?
Yes..i chose multiple funds in same catogsry as safety if one fund / fund hous crashes or falls… and there is less overlap between all of them..so more diversification…
Thanks
Prashant-None of your goals are more than 5 years. Hence, in my view investing in any equity funds is risky. Stay away from all equity funds and also stay away from other types of debt funds (except Ultra Short Term Debt Funds or Short Term Gilt Funds).
Hi Basu,
As we know that Market is on high now and there is a possibility to fall the market for some coming months.
I have been investing in mutual fund since Oct 2015 . so I want to know that shall i continue invest in mutual fund for coming 5-6 months?
I am thinking to stop mutual fund investment for coming 5-6 months and then again continue after 5-6 months. As there is a possibility of correction in market in next 5-6 months. So till the time i can invest my money in bank RD.
Please guide me this
Thanks
Jitendra Chauhan
Jitendra-Who know that market will FALL from now ON and after 5-6 months they be again on track?? If anyone know, then he must be GOD. If your goals are long term, did the proper asset allocation, then why to worry??
Thanks a lot sir..
Hi Basu,
I am planning to invest for long term (15 years) goals. Below are my current investment. My asset allocation would be 30:70 (Debt:Equity)
Debt:
FD – 1 lakh (Tax Saving – 5 years) started in 2016
LIC – 10,000/year started in 2011
Equity:
Axis Long Term Equity Fund(ELSS) – 2000 (started in Jan 2017)
ICICI Value Discovery Fund – 3000 (Started in Apr 2017)
Franklin India Small Cos – 3000 (Started in April 2017)
Could you please review my portfolio and tell your opinion.
Hi Basu,
Many thanks for answering our queries.
My Goal:
1. Need to have one crore for my retirement in 20 years
2. Need 40 lakh for Girl child education and marriage in span of 15-20 years
Risk ability: Moderate
Investment horizon: 20 years
Debt-Equity ratio: 30-70% (investing last 6 months)
Emergency fund: Keeping 3-4 months of monthly income
Medical coverage: Have term plan of 50L, will need to take for my parents.
Current Debt portfolio: PF – 1500 & RD – 2000 per month
Current Equity portfolio: (all Direct Growth plan monthly SIP for 3 years)
————————————————————————————————————————
SBI bluechip – Rs 2000
ICICI value discovery- Rs 1000 –> Need to remove this multi cap as I am planning to add one ELSS(multi cap)
DSP BR Micro Cap – Rs 1000
Franklin smaller comp- Rs 1000
I was having two small caps as their portfolio overlap is 15%.
———————————————————————————————————————
Now I am planning to refine my portfolio after reading number of mutual fund forums/blogs/articles considering my below requirements/understandings.
a) I need to diversify my portfolio and remove the small cap ratio to some extent considering future corrections.
b) I need to accommodate ELSS funds(multi caps) to my portfolio to get tax exemption as well as Growth creation (same 20 years).
c) Since bank FDs not in favor of good interest rates, I am planning to move to Debt funds to replace my FDs.
d) Further I want add one mid cap to diversify my equity portfolio to have each category of Large cap, Mid cap, small cap and multi cap(ELSS)
Now my queries are,
1. Are my understandings are correct?
2. Is that okay if I invest Debt funds through monthly SIP? or Lump sum is recommended for Debt funds?
3. Is the below portfolio looks fine?
SBI Magnum Short term gilt fund(Debt) – Rs 4000
SBI Blue chip (Large Cap) – Rs 3000
Franklin smaller companies(small) – Rs 1000
Mirae Asset Emerging blue chip (Mid) – Rs 3000
DSPBR tax Plan(ELSS/Multicap) – Rs 4000 –> Large cap oriented ELSS
Many thanks in advance.
Harry-1) YES.
2) You can opt like monthly SIP or even lump sum also. But strictly invest only in ultra short term or short term gilt debt funds.
3) Perfect.
Thanks a lot Basu.
Hi Basu, Sorry, just forgot to ask you!
Even if I have a horizon of 20 year for debt allocation , still you advise me for ultra short term or short term gilt debt funds?
Harry-YES.
Hello Sir,
Hope you are doing well.
I have a very generic query related to mutual fund investment. Today I got an email with Subject line as “Get 8.65%* on your savings”. I went through the email and found that, its kind of an open ended mutual fund scheme which invest in debt and money market instruments for return. They are doing the advertisement by saying, its a saving account which will give you more return compared to a bank saving account. Below are the features
Zero account charges
No Minimum balance
No lock in period
Anytime withdrawal, 24*7, with in 30 mins
Minimum investment is 1000 and 500 thereafter.
My query is, I have my money kept in a saving bank account which will be going to different mutual fund schemes through SIP mode, does it make sense to park all this into above mentioned scheme as I can withdraw the required amount anytime whenever my SIP dates are near.
I know it may sound little childish but I am curious to know your thoughts on the same.
Thanks,
Paritosh-Refer my post on the same at “Reliance Money Manager Fund – Is it an alternative to bank savings account?“.
Hi
I am a new bee in Mutual fund investment. I have a PPF of 30k per year and an FD of 50 K. Also have a LIC of 30 k per year. Wanted to know whether it is worth investing in MF for 5 years?
I would like to invest in Franklin india prima fund & HDFC mid cap fund in the mid cap category. Is it good enough to start off?
Would like to buy a house by 2025. That is what i am planning. Kindly advise
Jeena-If your goal is short-term (5 years), then simply avoid any equity products.
Hi Basu.
Thanks for the informative blog. I learnt a lot as a new investor in MF.
I have one general question which may not be relevant with the topic.
I want to know which web interface (like fundsindia, scripbox,invezta, MF utility etc..) should I choose to invest and track.
Or
Should I go for individual fund house site and invest.
P.S. I want to invest only in direct plans as I know in long term Direct will have big difference in total gain amount compare to Regular.
Avik-Use MF Utility.
Can you plz share some insight about “Kotak Select Focus Fund direct growth”.
I am thinking to invest in it for long term 15 years as I analyzed its performance is good last 4 years.
Is CRISIL rating is reliable for choosing funds ??
Please suggest.
Avik-But it is a multi-cap fund with good performance so far. Do invest with proper asset allocation.
Hello Basu,
I am planning to start an investement in SIP & MF and they are new to me.. not a rocket science but i had refrained in investing in them for a long time.
Could you please review my portfolio and advice me the funds accordingly
1-ppf 7lacs
2- Sukanya acc 3 lakhs
MF-
DSP BR Mirco cap -50000k lumpsum
PLanning to start an SIP of 5 k each on below MF
1- Kotak Select focus fund (large cap)
2- Kotak emerging quity or Reliance small cap or Mirae emerging bluechip
looking forward to you advice
Akash-What is the time horizon of this investment?
I am looking for long term.. next 5 to 10 yr or more. Thanks for a quick revert.
Akash-Be specific, there is 5 years long gap between your LOOKING.
I am planning for investment for a period of 10 yrs.
I already am investing 1.5l in my PPF and SSY account every year. Plus have insurance policy for 1 lakh that i pay every year.
Am not looking for any tax saving MF investment provide it get me a better return than investing in Equity MF.
I am bit confused on which MF should I select for SIP as I am planning on Investing 20 every month on sip.
Am planning to Select max of 2-3 Sip for this purpose.
Akash-Forget for a moment about funds and all. Concentrate on the above post carefully. You will get answers about how to move into MF.
I want to start an MF with minimum investment for 20 years with minimum of 12% return. Please suggest me one good Mutual fund in SIP to invest. My target is to recover the interest amount I am paying for my Home Loan of 7 lakhs for 20 years. Please suggest.
Poonam-Equity Oriented Balanced Fund from above list.
HI Basu, thanks for the prompt response. Can you pinpoint one such fund because I am totally new to this and do not have at all any idea which will be the best for long term with good return. Please suggest.
HDFC Balanced Fund or ICICI Balanced Fund.
Thanx for prompt response.
Even i need to have 1lakh 30 k by 2018 march. How much minimum and in what fund do i need to invest to get that amount.
Poonam-Is it different from your earlier query? How long you want to wait for this lump sum which you get in 2018?
S it s different from previous query. I need 1lakh 30 k in march 2018, so may be 9 months from now.
Poonam-Use Ultra Short Term Debt Funds from the list of my post “Top and Best Debt Mutual Funds in India for 2017“.
Hi Basu,
Good morning. I am 36 yrs, newly entering equity. I have started investing for long term (>10 yrs) as ELSS. I want invest more than 1.5 lac per annum. I am a moderate risk taker, expecting 12% returns after 10 yrs.
Can you please suggest me which equity I have to opt?
Balanced/multi cap/large cap/mid cap/small cap
Thank u in advance.
Pappy-First do the asset allocation as I said above, then within the asset class, choose the funds which I listed in above post.
Thank u for your quick reply.
I have decided Debt:equity of 30:70. I want to choose any one of following to limit the number of funds.
a) Equity oriented balanced fund
b) 70% Equity (large/mid/small) + Short term gilt fund (30%)
c) 70% Equity (multi cap) + Short term gilt fund (30%)
Pappu-Choose the option B.
Hi Basu,
Thank u for your reply. Sorry for more query.
Kindly suggest me the proportion of large/mid/small cap, if I am moderate risk taker. Thank u in advance.
Pappu-Large Cap/Mid Cap/Small Cap in the ratio of 60:30:10.
Thank u very much.
Best wishes for you too.
Hi Basavaraj, Good morning !
My current investment details :
Axis LTE Mutual Fund( Tax) 4,000
Franklin Mutual Fund(Tax) 4,000
Franklin Smaller co Mutual Fund 4,000
Mirae Emerging Bluechip -Direct (G) 4000
LIC Quartley installment ? 5,163.00
I am planning to invest one more fund for 4k monthly which would be short term 1.5 to 2 yrs. I can take risk. Let me know which will be best to opt .
few which i selected as :
1.Birla Sun Life Small and Midcap Fund – Direct Plan (G)
2.L&T Midcap Fund -Direct (G)
3.Birla Sun Life Frontline Equity Fund
4.L&T Emerging Businesses Fund-DP (G)
or MIP or any other….
Sudhakar-Don’t enter into equity if your time horizon is just 2 years. Rest you have to decide.
Thanks for reply ! i would be getting 7k each month from other income for next 18 months.. so i thought of investing it .. i am fine with taking risk too. would you suggest any other good options to proceed
Sudhakar-It is easy to say that “IM FINE WITH TAKING RISK”, but hard to face the reality. However, at the end of the day it your money. Hence, it is YOU who has to take a decision. But in my opinion, STAY AWAY.
Thanks for your suggestion Basavaraj !
would you suggest any other to invest ? i will have 30 K each month for next 1.5 yr for savings.. so thinking where to invest instead of lying in saving bank account.
Do let me know where can i invest this. The one purpose is in case after 1.5 years if want to buy any property i will need to withdraw this amount as single shot
Hi Basu,
A common query!
I have 10-20 year retirement goal and investing debt- equity ratio as 30-70%. Moderate risk taker. Can you advise which one of the below portfolio is better? I am planning to have a proper allocation in equity itself for better diversification.
a) large cap fund,- 1, mid cap-1 and small cap -1 (currently I have)
or
b)2- 3 Multi cap funds ?
In option a –> Even Mid and small caps have large cap allocation in it. vice versa all funds have others in it.
In option b –> Multi cap funds have a mandate to shift any caps according to the current market in which we can’t guarantee the proper equity allocation of mid,small and large caps.
So both options have their own loop-hole in it.
kindly advise which one makes my portfolio well diversified and down fall risk reduction?
Hari-I know that some % of funds always tilted towards large cap (even if they mentioned mid cap or small cap). However, in case of selecting the funds separately like large cap, mid cap and small cap, you know how much % is in what type of capitalization of stocks. But same you can’t predict with multicap funds. They have the mandate to move as per fund manager’s view (I am saying fund manager’s view but many fail to follow the opportunity). Hence, I stick to separate and feel comfortable.
Thanks Basu for your prompt response!
However I am planning to add ELSS funds for tax saving in span of 10-20 years. (considering ELSS is the best tax saving and wealth creation instrument). I understand that ELSS funds are considered Multi cap funds. In that scenario, if I opt some Multicap(ELSS) funds, my portfolio is in correct mix?
Currently my portfolio has large cap :60% mid:30% and Small 10%. (Rs 6000)
I am planning to add Franklin tax shield and Birla tax relief -96 in equal amounts (Rs 2000 per fund monthly SIP).
Is that a correct mix? Kindly advice
Many thank in advance and sorry for increasing my queries in to sub levels?
Hari-You add multi cap fund. But do remember to track the movement of the fund. Otherwise, you end up in higher exposure to particular market cap stocks.
Sure Basu! Thanks a lot.
Hello Sir,
I have investments in following funds through SIP since Oct 2015 for 15+ years, Request to review investments:
1. Axis LTE – Direct G – 4000
2. Icici pru val discovery – Direct G – 2500
3. UTI mid cap – Direct G – 2500
4. Lump investment of 9000 in DSPBR – Direct G.
I am planning to add Franklin india small co and 1 balanced fund. Please advise..
Mukul-Where is your debt portfolio?
Debt part in PPF – 30 K and FDs – 20K.
Mukul-Why so much high exposure towards mid cap and small cap? Why can’t retain one large cap, one mid cap and one small cap fund ONLY?
Hi Basu, I posted this question on another section just now and realized i should have posted it here, please ignore the other one (sorry). I visit your webpage once in a while to check out the investment atmosphere in India since i am an NRI and have very limited options in investing in India. Thanks in advance for dolling out quality advise for free, for otherwise uninformed investors like me. Looking for some advise today, I have an Ultra long term FD in an Indian bank maturing soon which is to the tune of about 8 lakhs (my only investment in India) and was thinking of moving it to an investment vehicle which may give me slighlty more interest/return than a conventional Fixed Deposit (since FD interest at historical lows). I dont need this money for the next 10 years (or more) and this is just to allocate som money on Debt (getting may be slighlty higher interest rates). Can you give me some suggestions, may be a Balanced Mutual Fund ? or is it prudent to put it on a Debt fund ? Can you please give a suggestion ? thanks in advance
Divakaran-Debt to Equity in the ratio of 60:40. In debt, select either ultra short term debt funds or short term gilt funds. In equity, one large cap and one mid cap enough. So totally 3 funds. That’s it.
Hi,
First of all I would like to say that you are helping to people who seek your help which is very good. I like that so much + you are giving advice with proper formulation which is also good. I got your reference from quora, I read above comments and as your replying I thought to ask as well 🙂
I am going to start my investment as I was busy in other stuff. you can consider me as a fresh. I dont have any knowledge and I want to achieve few things as a Goal.
goal 1 – buy a Car (5 yrs) – 6Lcs
goal 2 – investments (3 yrs ) – 5Lcs
goal 3 – Furniture (2 yrs) – 3 Lcs
I can invest up to 5000/Month
I think goal 3 is first priority and then Goal 1 and then goal 2
Please suggest good Funds, I know your first answer will be read abouve post but if you can suggest directly any good fund, I will review and take that SIP.
Thanks,
Gopal
Gopal-Skip from equity mutual funds. Because your all goals are within 5 years time horizon. Instead, I suggest you to use either Ultra Short Term Debt Funds or Short Term Gilt Funds.
I am impressed. Thank you for really quick reply. Support lines are not such Quicks 🙂
1. Can you suggest me good funds?
I checked but I am not clear on that.. and this funds gives about 9-10% return. I am not sure these are good or OK.
2. If I plan Rs. 2000 – Rs. 3000 investment for long term say 10 – 15 – 20 yrs, which fund you suggest. directly give your best fund name, so I will review that.
Thank you so much 🙂
Gopal-Refer my post “Top and Best Debt Mutual Funds in India for 2017“.
Thanks very much Basu.
If my understanding is correct, asset allocation is something which I need to spread my money into different investments according to age and goal.
If age between 20 to 30
EQUITY – 70%
Large cap – 45%
Mid and Small cap – 25%
DEBT – 30%
Debt fund – 15%
Cash/FD – 15%
If age between 30 to 45
EQUITY – 60%
Large cap – 40%
Mid and Small cap – 20%
DEBT – 40%
Debt fund – 20%
Cash/FD – 20%
If age between 45 to 60
EQUITY – 30%
Large cap – 30%
Mid and Small cap – 0%
DEBT – 70%
Debt fund – 40%
Cash/FD – 30%
Please correct me if I am wrong.
rtech-Age based asset allocation is one of the biggest MYTH.
Thanks Basu for your reply.
One doubt though, If i invest in one multi cap and one small cap then what fund should I choose for other to not affect the diversifcation? large cap or mid cap
rtech-When you invest in multicap fund, then they have mandata to move the investment to any market cap. Hence, it is hard to say whether you have to include large cap or mid cap.
Hi Basu,
I am 27 and new to Mutual Fund. I would like to invest in 2 or 3 funds. I already invested in tax saving Axis long term ELSS fund. My goal is for long term (above 10 years), so probably asset allocation is 30% debt and 60% equity based on your suggestion. Could you please suggest funds to invest.
ICICI Pru Value Discovery Fund (Multi Cap) – 2000/- (or) Any Large Cap
HDFC Midcap Opp Fund (Mid Cap) – 2000/-
Franklin India Smaller Companies Fund (Small Cap) – 1000/-
Are the above funds are good to proceed?
Invested:
Axis Long Term Equity Fund (ELSS) – 2000/-
LIC
FD
Thanks in advance for your great work.
RJ-My fund selections are already available in above post.
Hi Basu,
Thanks for your reply.
So I can go ahead and invest in these 3 funds.
ICICI Pru Value Discovery Fund (Multi Cap) – 2000/- (or) Any Large Cap
HDFC Midcap Opp Fund (Mid Cap) – 2000/-
Franklin India Smaller Companies Fund (Small Cap) – 1000/-
You are doing great job helping others with your insights.
RJ-Yes, but with proper asset allocation.
Hi Basu
Great information loved it. Kindly help me with my portfolio. First time investing in SIP.
Age – 33 years old
Invest – will do it for next 20 years
Goal – To get 1 cr by 2037
Can invest in SIP – Maximum of 5000 INR per month.
Investment already done
PPF – 60000 INR per year
TERM insurance – 5000000 sum assured
LIC Life insurance – 20,517 premium per annum
Medical policy – 2 lakhs
Kindly suggest which which mutual fund to invest
Sanjeeb-They are listed in above post.
Yeah I have read the entire post, if you can take extra pain and suggest 5000 INR which fund what amount i should put in
Hi Basu,
Thanks for all your Replies. Really Appreciate all your efforts for these Analysis and guiding People.
I am investing below Mutual Funds since last 1 Year. Time Horizon is 15 Years
1) ICICI pru focussed bluechip fund : 4000
2) ICICI Discovery Fund : 4000
3) HDFC MidCap : 8000
I am investing PPF : 150000 per year
Questions:
1) Shall I continue on these selected Mutual Funds
2) Is it advisable to take NPS with the investment of 50,000 Yearly
3) Shall I opt for Small Cap as well. If yes then can u please suggest one. I thought of DSBR Micro Cap but seems its stopped now.
Regards,
Rishi
Rishi-Why you felt doubt about own recently started MF investments? Funds are good and you have to continue with proper asset allocation. I don’t think NPS is a great investment product (considering tax and illiquidity issues). You can use small cap to small extent.
Thanks Basu for your Guidance. 🙂 Most of my Colleagues/Friends have become Fan of your Blogs. Its really Helping us
Regards,
Rishi
Rishi-Pleasure to know this 🙂 But I am still in learning curve.
Hi Basu,
Good Evening ! !. Hope you are doing good.
Got Few more thoughts today … 🙂
I am dropping the thoughts of investing in Small Funds and Instead I am planning to increase SIP from 4000 to 8000 for ICICI pru focussed bluechip
So it will be like below
1) ICICI pru focussed bluechip fund : 8000
2) ICICI Discovery Fund : :4000
3) HDFC MidCap : 8000
I am investing PPF : 150000 per year one Time
Question
1) Please guide me if my Asset Allocation is fine w.r.t to LargeCap/MultiCap/Midcap for 10-15 Years Time Frame.
2) I guess next time I need to decrease my PPF Investment to 100000 Yearly to maintain 30:70 Ratio Debt:Equity Ratio. Correct?
Regards,
Rishi
Rishi-Yes, you are in right track and assumptions about asset allocation is also as you said. Go ahead.
Thanks a lot Basu 🙂
Hi Basu!!
I have shortlisted following MFs after reading your post for SIP, all Direct mode:
1. Franklin India Bluechip(G)- Rs 2000
2. ICICI Pru value Discovery(G)- Rs 1000
3. HDFC Mid Cap Opp. Fund(G)-Rs 1500
4. Franklin India Smaller Cos Fund(G)- Rs 1500
My age is 28 and i am willing to stay invested for long time (10+ year).
I am also investing Rs. 50,000 yearly in PPF.
please share your opinion regarding above selected funds.
One question regarding above funds is all of they have allocated maximum percentage of their assets in Banking/Finance sector in their portfolio.Will it affect the diversification in my portfolio.
Pankaj-You can go ahead with this. Banking or Finance may be over weighted. Hence, I suggest you to avoid multi cap funds like Value Discovery.
Thanks for your prompt reply.
can you suggest other fund in this category, Franklin India prima plus is also having 25% allocation in banking/finance sector
Pankaj-My selections are listed above.
In multi cap category, two funds from your list are:-
1. Franklin India Prima plus and
2. ICICI Pru value Discovery(G)
You suggested to avoid icici Pru value disc…. and Franklin India prima plus have similar weightage of allocation in banking/finance like icici….
That’s why I asked about other fund….
My other question is….What could be alternative of multicap fund.
Thanks for your reply again.
Pankaj-When you have large cap, mid cap and small cap separately, then you no need to have multi cap.
Thanks for your reply.
30yrs male,married,1yr old son. Aggressive investor.
I’ve started SIP’s of 13K on below funds from Jan2017.
Investing until Jan2019. But planning to withdraw in 2020 or 2021.
Large cap-SBI Bluechip Direct-G = ? 1,500.00
Multi cap-ICICI Pru Value Discovery Direct-G = ? 1,500.00
Mid Cap-Mirae Asset Emerging Bluechip Direct-G = ? 5,000.00
Small Cap-Franklin India Smaller Companies Direct-G = ? 2,000.00
Thematic & Sector
Franklin Build India Direct-G = ? 1,000.00
ICICI Pru Banking and Financial Services Direct-G = ? 2,000.00
Would you please advice whether my fund selection and amount allocation is good?
Thank you.
Rajesh-I will not suggest any equity instruments for such a short term goal. Rest you have to play with your aggressive nature.
Thank You Basavaraj for your swift reply :)..
Sorry for asking a lame question.
If we leave out the time horizon,
Is the funds and allocation hold any good for my portfolio?
Rajesh-Leave out for how long? Be specific while investing.
Basu, I am surprised at the kind of patience you have in answering for FREE all the questions. Hats off and kudos to you. May your tribe grow and may you continue gathering all the goodwill of the folks benefiting from your posts!.
Hello Basu,
Good Morning. How are you? I was reading your post and planned to invest in DSPBR Micro Cap Fund, however they have stopped taking new application for the said fund. They are re-directing to look at small & midcap fund managed by the same fund manager.
I thought to inform you, relevant changes can be made to that category if you think viable.
Thank you.
Ashish-In Midcap, DSPBR is not the ONLY option for us. Think beyond any single fund.
Dear Basu,
I am 32 years old looking forward to a long term (15 year) investment in SIP. Based on the above listing, comments and readings I have selected the following SIPs. Request if you can please guide me with the investment plans.
Goal :
1. 3 Crores by end of 2032 for buying Home
2. 5-6 Crores by end of 2045 (Retirement Amount)
1. ICICI Pru Focussed Bluechip Equity Fund – 5000/month
2. Birla Sun Life Frontline Equity Fund – 5000/month
3. Icici Pru Value Discovery fund(G) – 5000/month
4. HDFC Midcap Opp Fund – 5000/month
5. DSPBR Micro Cap Fund(G) – 5000/month
Apart from the above I have currently invested in the below
1. LIC – ~60,000/year for a period of 21 years (~5000/month; Starting 2011)
2. PPF – 150,000/year (Plan to invest for 30 Years; Starting : 2016 )
3. NPS – 50,000/year (Plan to invest for 30 Years; Starting : 2016)
4. NPS Employer Contribution – ~50,000/year (Plan for 30 Years; Starting : 2016)
5. PF Employer Contribution – ~ 50,000/year (Plan for 30 Years; Starting : 2015)
6. FD – 10,000/month (Plan for 1 year term)
Please let me know in case you need any details that I might have missed out. I humbly request you to please suggest and guide me with any changes I might need to make in my investment pattern/strategy or even allocation of the amount so as to maximize the return after 15 years (2032) and at time of retirement (2045).
Sincerely apologize if my question is silly.
Thank you very much in advance.
Regards,
Avisek
Avisek-Financial Planning can’t be created based on your few lines of sharing. However, in case of Mutual Funds, why you selected two large cap funds? One large cap fund is enough. Also, manage the asset allocation based on the above post for your respective goals.
Thank you Basu for your reply. It will be helpful if you can please guide me in a bit detail. Please let me know what else I may provide for making a balanced investment strategy. I understand that 2 large cap funds are redundant and I mistakenly wrote it instead of or.
Please suggest the best one out of 1 and 2.
I will be very grateful if you can please guide me with the SIP investments in a bit more detail, in terms of choice of funds and detailed asset allocation by each fund. I am very new to SIPs and would be highly obliged if i can get some expert guidance from you.
Hope to hear something positive from you.
Thank you again for your time and explanation.
Regards,
Avisek
Avisek-You can choose any one between the large cap. Fund selection you already did. Regarding asset allocation, refer my above post.
Namaste sir!
I want your suggestion
On my current sip
Sir I am 27 years old
And my goal is child’s education
My son is 2 years old
SIP,
1;FIPP-5000
2;HDFC MID CAP OPP.-4000
3;I pru value discovery-7500
4;I pru focused blue chip-2500
Akhilesh-Read the above post fully. Where is your asset allocation?
Hi Basu,
How and when one can decide that his/her fund is doing well? By comparing with what benchmark? Would appreciate if you can share any link for the same, if available.
Thanks in advance.
Mahesh-By comparing the benchmark we usually compare the fund performance.
Hi Basu,
I am investing following MFs since 2011
1. HDFC Top 200 Growth – 2000 Rupees
2. HDFC Balanced – 1000 Rupees
3. HDFC Tax Saver Dividend – – 1000 Rupees
4. Sundaram Select Mid cap regular growth – 1000 rupees
I have started one more from this January in Franklin India smaller companies growth (1000 rupees).
I am looking for longer term investment with asset allocation ratio of 70:30.
Could you please advise on Funds selected
Thanks and Regards
Nilesh
Nilesh-Where is your debt portfolio?
But should i consider investing this funds ?. I don’t have debt funds.
Nilesh-Do the basics of investing as I explained above, then think about funds.
i am already doing investment of 30000 yearly in PPF and have tax saving FD’s.
Nilesh-Funds are good but what I am saying is do it with conscious investing and review once in a year at least.
Thanks
Dear Basu sir,
I am planning to invest in SIP(Systematic investment plan).Whether to invest in march end or april first week…because for all working employees they will get salaries & bonus in march last week.
Could you please tell ur suggestion.
Harsha-Do you invest to achieve your financial goals or looking for MUHARAT for investment?
Sorry,My point is since most of the working employees will get salaries & bonus in march last week.
will there be any effect of this on Mutual funds?
Harsha-No work and you can invest it any time with proper asset allocation based on time horizon of the goal. Sorry if my question is bit harsh to you.
I am beginner in investing Mutual funds/SIP…sorry if my question was weird
Harsha-It’s alright 🙂
Hi Basavaraj,
I am pleased to find a genuine financial advisor, I talked with lot of advisors but none of them could explain my simple questions or could exlpain why, how etc.!!
I gone through your post (Mutual Funds, ELSS & short term), all users comments and your genuine responses to each and ever query. Hatsoff to you!!!!
I am new entrant to the mutual fund investment & financial planning hence was digging your post, reply to understand it in better way…
Planning for retirement, 20 years from now, with asset allocation ratio of 70:30.
From your list, I have shortlisted below mutual funds:
ICICI Pru Focussed Bluechip Equity fund (Large cap) … 5000 Rs/Month
SBI Magnum Mulitplier Fund (Multi cap) … 5000 Rs/Month
HDFC Mid Cap Opp Fund (Mid cap) … 5000 Rs/Month
DSPBR Micro Cap Fund (Small cap) … 5000 Rs/Month
HDFC Balanced Fund (Balanced Fund) … 5000 Rs/Month
RD … 10000 Rs/Month
For tax saving:
DSP BlackRock Tax Saver Fund (Large cap) … 5000 Rs/Month
Birla Sun Life Tax Relief 96 (Balanced fund) … 5000 Rs/Month
NPS (Tier-I)… 4200 Rs/Month
Tax saving FD, PPF or NSC … 2000 Rs/Month
Additionally I have 5 lakh corporate medical policy for my family. I have 3 lakh in my saving account as for any kind of emergency.
I am still bit confused with maintaining balance between investment & tax saving. Can you please help on it.
I am OK with handling 3 or more mutual funds, also I am OK with readjustment of mutual funds, debt media & amount.
Thanks!!!
Sai-One large cap and one mid cap is enough (if you are fond of risk, then a small portion of small cap). Also, whether you calculated the equity portfolio considering the mutual funds (both tax saving and non tax saving) and also the equity portion in NPS?
You no need to have MORE funds. Two to three funds enough.
Thanks for prompt reply!!!!
I wanted to use equity funds and dept such a way so as my investment and tax saving purpose gets solved.
Per your comment, I will go ahead with one large and one mid cap and little bit of small cap portion:
ICICI Pru Focussed Bluechip Equity fund (Large cap) … 10000 Rs/Month
HDFC Mid Cap Opp Fund (Mid cap) … 10000 Rs/Month
DSPBR Micro Cap Fund (Small cap) … 5000 Rs/Month
RD &or FD= 10000 Rs/month
For tax saving:
DSP BlackRock Tax Saver Fund (Large cap) … 10000 Rs/Month
NPS- 5000 Rs/month
FD (5yrs) &or NSC &or PPF = 5000
Does this looks balanced? I am more than 3 on funds which I know is not per your advice. But couldn’t get how to balance. Can you help me so as I wisely spread amount between equity and dept (70:30 ratio and retirement 15 yr horizon) so as my tax saving and investment purpose is solved.
Sai-Now you are on track. But in my view NPS is not a great retirement product. Balancing for first 1-2 years not required. Later on you can start doing.
Hi Basavaraj,
Thanks a lot for such detailed yet simple analysis!
I am investing in Mutual Fund through SIP route from last two years.Request to kindly review my portfolio and suggest for any modifications,if any.
ELSS: Axis Long Term Equity Fund(G)–3000
Large Cap: ICICI Prudential Focused Blue Chip Equity Fund(G)-3000
Small Cap: Franklin India Smaller Companies(G)-2000
Balanced Fund: HDFC Balanced Fund(G)-1000
Diversified Equity:Franklin India High Growth Companies(G)- 1000
I have noticed that the Axis Long Term Equity Fund is under performing. Please suggest whether should I stop further SIP in this fund and shift other ELSS fund?
Thanks in advance!
Rahul-Without knowing your financial goals, how can I guide you?
Hi Basavaraj,
I am investing in the funds for my long term goals.(Retirement, Child education, Child Marriage).
Rahul-Refer my above post properly and understand the importance of asset allocation based on time horizon of various goals.
Thanks for the informative article Basu. Till 2015 I was only saving through PPF and one Endowment LIC policy. But last year I planned to start saving using Mutual funds and had below 2 Mutual Funds and my PPF:
UTI Long Term Equity Fund (SIP) – 3500/-
Axis Long Term Equity Fund (SIP) – 2500/-
PPF 30000/-
This year I am planning to add two more funds as below (previous ones will be continued):
ICICI top 100 (SIP) – 2500/-
SBI Ultra Short Debt Fund (yearly once) – 30000/-
Could you please review and suggest if this is the correct allocation to the various types of MFs or I need to replan.
Pooja-You can continue both the tax saving funds. But why two funds than one? Also, for your investment, I don’t have any idea of time horizon. Hence, it is hard for me to guide you.
Thanks Basu for your inputs. Here is more details…
I started investing in tax saving mfs couple of years back and then I was in wrong impression that investing in one single fund can be risky in long term so I decided to divide it in two. Let me know if I need to discontinue one of these, if not ill continue both.
Horizon of my planning… I have divided it in three parts
1) after 3 years for my marriage.
2) after 7 years for buying a house.
3) for retirement.
Again I am a complete novice in investment and may be my above break is not perfect or even good considering long term planning.
So kindly guide me accordingly, like do I have to correct my planning and what all options I have for investing in that direction.
My current investment also includes vpf 30000/- yearly. One query here too.. if ppf can be an alternative for debt does vpf can be an alternative of any type of funds.
Pooja-Refer the post properly and you have to do asset allocation for your 3 yrs, 7 yrs and retirement goal accordingly. Yes, VPF and EPF also be considered as your debt portfolio.
Thank you and Sure ill do so. Can you help me with couple of more doubts as below:
1. As you described different types of equity funds in this post are all good for any time horizon ? Or anyone is good for long term or mid term planning?
2. Is there any time restriction to keep money in debt mfs ?
Pooja-1) All are good for an equity portfolio. However, you have to do asset allocation based on time horizon.
2) NO.
Here is my asset allocation, I am not including PPF in this as its not fitting in the time horizon of short term and VPF is already pre declared for long term:
1. Long Term Planning (30% Debt + 70% Equity)
VPF: 30000/- annually
ELSS Fund (Axis and UTI): 6000/- SIP
2. Mid Term (40% Debt+60%Equity)
Debt Fund: SBI Magnum Gilt Fund: 2500/- SIP
Large Cap: ICICI Top 100: 20000/- annually
Mid Cap: HDFC Mid cap opp fund 25000/- annually
3. Short Term (100% debt)
Debt Fund: Birla Sun Life Floating 30000/- annually (amount will vary depending upon surplus amount ill have at any time)
Kindly review and let me know if above allocation is good to go. And if any correction is needed.
And thank you for your valuable feedback and guidance.
Pooja-1) Retain one ELSS. 2) SBI Fund modified duration is around 3+ years, whereas your goal is midterm. Hence, stick either to short term gilt or ultra short-term debt funds. In my view, one large cap (with around 60% exposure in equity %) and one mid cap (with 40% exposure in equity %) is fine than owning one multi cap and one midcap (with higher exposure) for such mid-term goal.
3) I think the fund is ultra short term (if it is so), then continue.
Thanks Basu.
1. Finalized Axis ELSS.
2. I checked your post on Debt funds and there SBI magnum gilt funds are mentioned as Gilt Short Term so I selected it. if its not appropriate per my time horizon ill invest in Birla Sun Life Floating rate fund instead.
Also modified the percentage as 60+40 among large cap (ICICI Pru Focused bluechip) and mid cap (HDFC Mid Cap Opp fund) in equity.
3. yes its Ultra Short Term Debt Mutual Fund.
Thanks again for your valuable advice and feedback.
Pooja-Better to stick to short term gilt.
Hi Basu Ji,
Firstly many thanks for answering my previous queries.
As per your article, suggestion and my analysis I have built my portfolio with 30-70 composition comprising 4 funds for my long term goals . All funds are Direct growth plans.
One large cap – SBI Bluechip
One multi cap – ICICI Value Discovery
One small caps- Franklin smaller companies.
One Micro Cap – DSPBR micro Cap – Here portfolio overlap is less than 15%
Now I want to increase my SIP amount in my portfolio to achieve my goals.
I understood that mid and small caps valuations are at very high and remarkable corrections are expected in near future.This may lead higher volatility and lower returns. Is this true ?
kindly advise which Cap I need to go for my further SIP increment considering the current situation.
I will also make sure the new SIP amount addition will not affect my 30-7.0 debt-equity ratio. Kindly advise which category (CAP) is ideally good to increase SIPs in my portfolio i.e. Large cap or Mid Cap or small cap or Multi cap?
Hari-“mid and small caps valuations are at very high and remarkable corrections are expected in near future.This may lead higher volatility and lower returns” is based on hindsight view. I look forward for long term. I suggest the lower small cap always. Because I don’t want unnecessary volatility in my portfolio.
Thanks Basu! So can I take this applies to ELSS funds as well? I mean I need to select ELSS funds with major allocation of large cap stocks to avoid volatility. Is that right?
Hari-Yes.
I wish to invest an amount of 1Lakh in mutual funds for a period of 10 years. As of now i do not have any experience in investing in mutual funds. my questions are
1. what would you advice whether to invest 1 Lakh in one go or go for a SIP of 10000 PM. in the first case can you give me an advice as to which funds to choose.
2. Despite my best efforts i fail to understand the algorithm behind investment. If i plan to take the help of an online portal like scriptbox, fundsindia or goalwise for a SIP. which one would you advice for a novice like me. On the other hand if you are providing financial services i will be glad to invest through you.
Thanks
C.K. Dharan
Dharan-1) It is purely based on your comfort. In my view, one go is best. But if you are apprehensive, then break into 5-6 and then invest.
2) None of the said middlemen will personalize you based on your risk and all. If you are uncomfortable with DIRECT, then choose an adviser of your area.
Dear Sir,
I am investing via SIP in three mutual funds since three years for my retirement (another 22 years)
UTI Opportunties – 5000
ICICI Pru discovery – 5000
Reliance Equity Opportunties – 5000
ICICI pru long term equity (tax saving) – 4000
I choose the funds based on advice three years back but now I am evaluating my portfolio. UTI Opportunities and Reliance equity opportunities funds are not performing for more than year or two. Please suggest should I continue with SIP or change funds.
Thanks,
Vijay kumar
Vijay-Where is your debt allocation? Why two multi cap funds (ICICI Discovery and Reliance)? UTI as per me is good fund.
Dear Sir,
Currently I invest about 30000 per year in PPF. Pls suggest if I should stop SIP in reliance eq opportunity and pick one mid cap fund instead from the list.
Vijay-Stop Reliance and before entering into Midcap, check the portfolio overlap between Midcap fund (you want to choose) and with ICICI Long Term and ICICI Discovery. If the overlap is less than 30-40 then choose one mid cap. Otherwise, it is not required.
Thanks!. If I stop Reliance in which I have about 1.5 lakh invested (since last 3 years) should I keep the amount lying in the same or should I systematically transfer it to rest of the mutual funds I am investing in.
Regards
Vijay-If your goal is long term and also with proper asset allocation then why can’t invest lump sum in go by redeeming from Reliance to the existing funds?
Hi Basu,
Thanks for your support . I have started a SIP for my retirement goals as per your advice. I want to start another SIP for my children’s education goal . Time horizon is 10 years. Please advise if the below distribution is good.
1-Quantum Long term equity – 3500
2-Mirae Asset Emerging Blue Chip fund – 3000
3-Icici prudential Value discovery fund – 1000
4-L& T India Value fund – 1500
5-HDFC balance fund – 1000
Regards,
Deb
Deb-Where is your asset allocation?
Hi Basu,
This is only the equity part. I will invest 30% in debt in Birla Sun Life Floating Rate Fund – Long Term .Please advise the if the funds are good . Do you advise to remove or add any fund? Is one debt fund enough for the portfolio?
Deb-One Ultra short Term Fund is enough for debt. Retain all funds. But come out of L&T Fund. Because you already having Mirae Fund. Do the asset allocation as I mentioned above.
I wish to accumulate a fund of 30 Lakh after 10 years. Can you suggest me a SIP investment plan (RS 10000/15000 per month ). or any other alternative investment plan
Chandan-You can select the above funds with proper asset allocation between equity and debt as discussed above and start investing.
Sir,, my age is 29. I want to invest 10k per month in mutual fund.Kindly provide some details or a portfolio so that i can open and invest as SIP.
Pranjal-Refer above post properly.
Hi Basavaraj
I am planing to invest 10K per month for the next 4 years for my kid
Could you please suggest me the suitable split which can yield me modest returns
regards,
Jawad Shaik
Dear Basu,
After reading your blog about SIP. I understand that investing in many SIP’s is not a good idea. I already invested on 11 no’s SIP for last one year. Now i want to closed some. Please suggest me which should i close. my investment goal are 10 years and investing 1000 on each SIP. please see below.
1)Franklin india bluechip fund-1000
2) Franklin india prime plus-1000
3) franklin india prima fund-1000
4) ICICI prudential dynamic plan cumulative option growth-1000
5) ICICI prudential export & other service growth-1000
6) ICICI prudential focused bluechip equity retail growth-1000
7) Kotack emerging equity scheme-1000
8) HDFC midcap oppotunities fund growth- 1000
9) magnum midcap fund-1000
10) BSL frontline equity -A -1000
11) BSL mnc fund-growth -1000.
I have ppf for 150000 per year.
I have FD & NSC.
waiting for you reply.
Thanking you
Sujandasgupta-I replied to your email.
Dear Sir,
My current portfolio is as follows:
1. Birla SL Front line Equity Direct-5000 Rs SIP p.m
2.DSP MicroCap Direct-5000 Rs SIP p.m
3. HDFC Mid Cap Opportunity Regular-5000 Rs SIP p.m Through ICICI direct
Additionaly i have invested lumpsum Amounts to following:
1. UTI Transportaion and logisitcs growth regular: 260000 Jun 2016 through ICICI direc
2. HDFC Balanced Fund regular : 195000 dec 2015 Through ICICI direct
I have few questions:
1. Since HDFC is not available in mfu online utility can i switch any other similar SIP plan.
2. Whether i should remain invested in my lumpsum purchases or should i move to to separate funds.
3. do you see any benefit if i move away from ICICI direct for current funds and start similar funds in mfutility ( after finishing locking period)
My investement horizon is 7-10 years. I am currently paying home loan EMI of 35000 INR as well. health and term insurances are covered.
Vivek-Where is your debt portfolio and what allocation you are following?
Sir,
I am really new investor and invested with poor advice of ICICI direct. Currently my lumpsum and hdfc sip is through icici and other are shifted to mfutility. lately After going through your articles i understand the importance of allocation. I can invest 10K more on SIP after march.
Please suggest suitable allocation considering my investment horizon. would you suggest my lumpsum purchases which is more than 1 year old to transfer to debt lumpsum via mfutility?
thanks in advance.
Vivek-Refer the post properly. You will understand the asset allocation I suggested.
Hi Basu Sir,
I see your Blog on a regular Basis. I request your Opinion on the below Asset allocation.
My Horizon is 12 to 15 years. My expectation is 12 to 13 % return
I am investing on the below Equity Funds.
Franklin India Blue-chip Fund (Large Cap) –> 4k
ICICI Prudential Value Discovery Fund (Muilti Cap) –>2k
HDFC Mid-Cap Opportunities Fund (Mid cap) –> 2k
DSP BlackRock Micro Cap Fund – Regular Plan (small Cap) –>2k
For the Debt , i have PPF of 10k per month.
So, please do explain if this is good or i need to change any portfolios.
Thank you
Best regards
Ravi Kumar
Ravi-Carry on with yearly once review and portfolio rebalancing.
Hello Basu,
I am 33 and have below SIP portfolio(includes mine and my spouse)(investing since 2016)
1. SBI bluechip – 5K (15-20 yrs for child higher education)
2. DSP BR microcap – 5K (5-10 yrs for vacation planning)
3. Franklin smaller companies fund – 5k (5-10 yrs for next car)
4. Franklin Higher growth companies fund – 5k (5-10 yrs for wealth creation)
5. UTI midcap – 5k (5-10 yrs for new business at 45)
Does these funds right choice for my goals. I may increase sip amount on these funds based on income and bonus components every year. Pls suggest.
Can you also suggest right fund for retirement planning.
thanks,
Santhosh
Santhosh-The problem in your investment are as below-
a) No asset allocation between debt and equity for each goal based on time horizon.
b) Single fund for each goal. Instead each goal must have one large cap, one mid cap and one small cap in equity portfolio.
c) No equity in case your goal is just 5 years.
Thanks for quick response Basu. Do you mean that one should have total of 9 different sip investments if planning for 3 long term goals.
Santosh-9 different SIPs in 3-4 funds ONLY but not on 9 different MUTUAL FUNDS. Use same funds but all cap funds must be included.
Dear Sir,
The entire media talking about equity mutual funds. It is a very good way to saving retirement/ for kids education or another long term goal.
As an investor, my question concerns the laws that govern these mutual funds.
I understand that the fund houses cannot be held responsible for the ups and downs of the stock market. But my concern is, how are these AMC Companies held responsible by the government so that tomorrow they do not close shop like Chit fund?
Kumar-There are enough checks and rules by SEBI including the % of stocks they hold. You no need to worry.
Dear Sir,
As your mentioned that “Once you understand how much is your return expectation from each asset class, then the next step is to identify the return expectation from the portfolio.
Let us say you defined the asset allocation of debt:equity as 30:70. Return expectation from debt is 7% and equity is 10%, then the overall portfolio return expectation is as below.
(70% x 10%) + (30% x 7%)=9.1%.” If return from PPF 8 to 9 % why should people go to MUTUAL FUND…This is fully high risk.
Mr Kumar,
You are contradicting your own statement. You only saying that Debt return is 7% and saying PPF returns is 8 to 9%. As far as I know, PPF is also debt instrument and interest rate is decreasing also now.
Kumar-PPF RISK FREE?? Check your facts, interest rate risk is also there.
Hello Sir,
Lower interest rate of FDs has pushed me to park some money in Mutual Funds. I am a beginner and a 35 year old women and have planned to invest for 10-15 years. For this I can take out Rs. 10,000/- per month. Am prepared for all ups and downs as I know that market situation keeps changing. Was trying to look for a guidance from internet and reached your site. Glad to find you. Could you please advise if my selection for following funds is fine?:
SBI BLUE CHIP FUND – REGULAR PLAN – GROWTH Rs. 2000
HDFC PRUDENCE FUND – REGULAR PLAN – GROWTH Rs. 1500
ICICI PRUDENTIAL NIFTY NEXT 50 INDEX FUND – GROWTH Rs. 2000
BIRLA SUN LIFE SHORT TERM FUND – GROWTH Rs. 2500
SBI MAGNUM GILT FUND – LONG TERM – REGULAR PLAN – DIVIDEND Rs. 1500
regards, Garima
Garima-I already replied to your Forum question.
Hello Basu,
I am NRI 48 years, own a house. have term and family health cover. have a daughter9(13) and son(9) and started saving after going through your blogs and your guidance and advice.
Present contributions
Jivan anand -8000
UTI pension -5000
HDFC balance 5000
Tata balance -5000
Franklin India short term debt -5000
Franklin India Prima plus (growth)- 5000
Have FD – 10 lac ( also as emergency fund)
UTI from past 3 years but all other MF’s since 5 months SIP investing.
Goal- to archive 50 lac corpus. 30 for daughter’s marriage and 20 lac for retirement kitty.
Time horizon- 10+ years
* Shall I switch from Tata balance to HDFC balance(merge to reduce the funds)
* I shall Increase the contribution now and then
* wants to invest 5 lac Lump sum in HDFC balanced fund
* 4-5 more years for Jivan Anand -so I will continue.
Kindly advice any addition or deletion in above funds or to increase or decrease the contribution.
Thanks
Josy-
-If you have separate debt portfolio, then why the balanced funds and that to more than one?
-One large cap, one mid cap and one small cap enough. Whether you continue or increase.
-Without knowing your time horizon, how can I say HDFC Balanced Fund best for lump sum?
-Its left with you to continue or hold Jeevan Anand.
Thanks Basu
-Cancel Tata balanced fund and continue with HDFC balanced,
-I will cancel Franklin Debt and start Franklin Blue chip
– I will hold Franklin Prima plus (large&mid cap)
-Jeavan Anand hold as Debt and only four more premium left to complete 16 yrs.
-wants to invest lump sum in HDFC balanced and hold for 10+ years Pls. suggest any better fund than this for 10+ time horizon. HDFC,Franklin preferred as already holding folios
-should I hold UTI pension?
Kindly advice
Josy-“I will cancel Franklin Debt and start Franklin Bluechip”-Why canceled debt and started equity? Will you be able to re-balance your portfolio with Jeevan Anand? Think and retain this product. HDFC Balanced is good for 10+ years time horizon. Why to select new fund for each fresh investment?
Many thanks sir,
I will follow your advice
Thanks again
HI Basu,
I am planning to invest lump sum money in the following ratio. This is for my equity portfolio (70%). I have done 30% asset allocation in Debts – PF, PPF etc apart from this.
SBI Blue Chip Fund – Direct (G) 30%
Franklin (I) Bluechip – Direct (G) 30%
ICICI Pru Value Discovery Fund (G) 15%
HDFC Mid-Cap Opportunities Fund (G) 15%
Mirae Emerging Bluechip Fund (G) 5%
DSP-BR Micro Cap Fund – Direct (G) 5%
They all are for long term more than 10 to 15 years.
Kindly suggest /advise if my portfolio is diversified enough and not over purchased.
Thanks
Nikhil
Nikhil-Why two funds within same category? Why not a single fund?
Thanks Basu. Just to diversify risk!! Is it worth?
Nikhil-It will not diversify but creates overlapping.
Thanks Basu. Dos this makes sense?
SBI Blue Chip Fund – Direct (G) 50%
ICICI Pru Value Discovery Fund (G) 20%
Mirae Emerging Bluechip Fund (G) 20%
DSP-BR Micro Cap Fund – Direct (G) 10%
Also, please shed some light how should we decide in which portion we should distribute our investment among large cap , mid cap ad small cap?
Thanks Nikhil Gupta
Nikhil-This may look fine. There is no specific rule of how to distribute among market cap funds. However, try to avoid over exposure towards small and mid cap funds.
Hi Basu,
Iam planning to invest in mutual fund and my goal is for a period of 5 years ,to create a corpus for my child’s education.
Monthly SIP is about Rs. 3000 . Let me know of good funds to invest and also is it the right time to invest since market is going up?
Vinod-The funds are listed above. Good time is NOW to reach your goals fastly.
Dear Sir,
I have been following your website a long time. I am 36 years old. My details are :
1) I have EPF, FD & RD Rs. 2 lac.
2) For my child education I want invest in Mutual fund for 10 years under SIP Rs. 2000/- PM.
3) In our area, there is only SBI Fund House. Hence I want to invest only SBI fund house in direct plan, Which funds are suitable for me ?
Suman-You no need to worry to search nearest AMC. You can do it online.
Dear Sir,
My current age is 36, I have planned to work till 46.
1. I want to have 20 Lacs at the end of 10 years for my business and sons education. How much amount should I invest monthly and which are the best funds to invest.
2. I would like to invest for 20 years for my retirement. I need to have 50Lacs at my age 55. How much money to invest and what are the funds to invest.
Kindly suggest.
Regards
Shiva
Dear Basu,
I am 42 years old. I have accumulated Rs 50 Lacs in Saving Account, Rs 30 Lacs in PPF account and Rs 30 Lacs in PF. I dont want to invest in Real estate anymore. This is surplus cash and I am looking for 15 years horizon of investment to support my retirement. What’s your recommended investment strategy?
Lalan-Refer the post from the beginning. I already explained it.
Hello,
My current investment SIP MONTHLY from last 15 months are :
TATA BALANCED FUND REGULAR oaln monthly dividend :4000 rs
L&T INDIA VALUE FUND:3000 rs
BIRLA SUN LIFE ADVANTAGE FUND dividend:3000 rs
I am looking to invest more in equity fund around 3000 month
Can you suggest some?
Thanks
Jignesh-How you selected these funds? What is the time horizon of this investment? Why dividend option and why not growth?
My friend who is a financial adviser suggested it.Time horizon is for five years.And the current investment started 15 months back.I was thinking of re-looking into the investment
Jignesh-I think you not read my post properly. If your time horizon is just 5 years, then simply avoid any equity product.
Hi Basu,
My Goal is to build wealth of Rs 1 Crore in Next 15 Years
Please suggest if below is allocation is fine
EQUITY : (70%)
1) ICICI Pru Focused Blue Chip 4000
2) ICICI Pru Discovery 4000
3) HDFC Mid Cap Opportunities 8000
4) HDFC Balanced Fund 5000
DEBT Fund (30%)
PPF : 9000 monthly
Regards,
Rishi
Rishi-If you already having separate debt portfolio, then a balanced fund? Just ignore it.
Thanks Basu for your Suggestion. Can you please suggest one more Fund of 500ok.
Hi Basu,
I am planning to add Rs 5000 more to my SIP. Please suggest to which Mutual Fund I can add to below Existing Funds (Large or Multi or Mid Cap)
Equity
1) ICICI Pru Focused Blue Chip 4000
2) ICICI Pru Discovery 4000
3) HDFC Mid Cap Opportunities 8000
16000 Monthly as of now.
DEBT
1) 9000 PPF
Regards,
Rishi
Rishi-Refer above post properly. Understand the time horizon and importance of asset allocation. If you not did that then first priority should be towards that.
Dear Basu
I had a query and was waiting for your reply for past two days. But looks like, it is deleted??!!
Thanks
Josy-I never deletes comments. Check once again. If it is missing then it is during the server migration of blog. My blog recently moved to another server. If you commented during that migration period, then there is a probability of missing. Hence, I request you to comment once again with your doubts. I will reply.
Waw! that’s great of you sir.I was wondering as it never happened to me before as well as to my colleagues at my office,we all immensely benefitted from you.
Many of the bloggers gets upset with repeated query but in your case I have seen people asking and taking advice even in the name of Narendra Modi and Abdul Kalam. But your focus is always on subject.
Never mind I will post my query again.
GOD bless you and may your tribe flourish!
Josy-Sure waiting for your comment. Usually, when we shift to the new server and during propagation time, some user comments may miss. It is natural but it was necessity for me to move to upgrade.
Having more fund does not give you enough diversification. Instead, in many cases, it may create you portfolio overlapping and leads to underperformance. >>> Overlapping in my point of view in simple terms means, stocks will be same in both funds. Let me give you an example in a different way.
Fund A – large cap – Investment amount 2000 for 10 years Sip = Suppose, first fund is giving 14% return then total amount (invested amount + interest) will be 5,24,182.77.
Fund B – large cap – Investment amount 2000 for 10 years Sip = Suppose, first fund is giving 13% return then total amount (invested amount + interest) will be 4,93,361.30.
Total Fund A and Fund B = 1017544.07
Now, lets go by your point with 2 EXAMPLES.
1) Investing only in one fund. Investment amount 4000 (SAME AMOUNT) for 10 years Sip = Suppose, fund is giving 13% (CHOOSING LESS % HERE) return then total amount (invested amount + interest) will be 9,86,722.60. (HERE loss is 30821.47
2) Investing only in one fund. Investment amount 4000 (SAME AMOUNT) for 10 years Sip = Suppose, fund is giving 14% (CHOOSING HIGHER % HERE) return then total amount (invested amount + interest) will be 10,48,365.53 (HERE profit is 30821.46).
Probality here is that returns will be above average (instead of loss or litte extra profit)
Now, in a common person simple terms, I think, its better to choose 2-3 large funds/small/mid cap etc (from top 3-4 funds in each category) cause, it is difficult for a common person to track and monitor who s fund manager etc on 2-3 year basis. I dont think 70% of the investors are doing that. Suppose, if I only have to invest 3k and I have 3 top funds in that category then why not split amount in 3 funds cause, it will be less risky (then investor dont have to worry, too much on who is fund manager etc). As per above chart, franklin blue chip 5 years return was 13.10% and ICICI one (large cap) was 15.60%.. I understand, ICICI one will give high returns but who can tell future? So, if a investor select both funds then his return % will be 14.35%. What I am MISSING here?? I hope, you are getting my point. To me, I am feeling more secure in selecting 2-3 funds in each category. Suppose, I have to invest 10K then I will prefer to go in 10 funds with 1K amount. I really want to know, what I am missing here. Plz reply. Thx!
Pankaj-So holding more funds means more returns?? Do you think holding more funds means all your fund managers generate alpha over what the single fund generate? What if all funds investing majorly in few stocks or sectors?
Basavaraj, frankly speaking that was the doubt in my mind. 🙂 You know, I was just trying to play safe.
I was planning to invest 30 k per month in equity and 15k in debt (Just got good hike lol).
Plan 1 >>> 30k equity = 8 k large cap + 8k multi cap + 7 in mid cap + 7 in small cap.
then I thought, why not play more safe and invest as per article (just split amount) >>>>
Plan 2 >>> 4 large cap (2 k each) + 4 multi cap (2k each) + 3 mid cap + 3 small cap = 14 funds. (different funds houses/good rating/ consistent past performers). ONE IMPORTANT point >>> Overlapping % of 9 out of 14 funds is below 23% and remaining ones 33%)
I know, its very difficult to track 14 funds but just to save my money, I was planning to do that. Basavaraj, my only question is to you is, if we forgot about pain in tracking 14 funds as compare to 4 funds (which I truly believe and accept it>> it is painful) but I will manage that. Do you think, it is wise idea to opt for PLAN B or simply stick to Plan A.
One last thing, you know, if we go to Amc’s or any other similar places (no body is suggesting correctly but all points on your blog making sense so, I selected 95% of the funds from your blog) so again your opinion is very imp to me cause, it is my hard money which I am going to invest.
When my portfolio is diversified between all caps and have enough debt funds (fd’s ppf etc) then whats harm in Plan A and PLAN B except my pain to track more funds??? Many thanks!
Pankaj-When underlying stocks or sectors are same then in what way by mere adding of more and more funds will create diversification? It is like investing in FDs from Bank A, Bank B and Bank C, where all Banks (A,B and C) providing you the same interest rate.
Two reasons why diversification within same fund category is not necessary:
1. According to your example your loss is 30k while getting almost 10 lakh. This is 3% loss in 10 years, ie 0.3% loss in one year. Is it worth the effort of monitoring and analyzing fund performance of both funds for 10 years? Investment is not a plant and forget strategy, periodic monitoring of funds is needed which requires effort and expertise.
2. All funds in same category have positive high correlation. Some times market is good for large cap, some times for small cap. If you have multiple funds in largecap itself, when one fund fails (when largecap fails) all funds fail. Instead if you diversify to mid and small cap and across equity and debt, it is will be a wise strategy.
This is why diversification is done, not to maximise returns (0.3% more), but to reduce risk (not all funds fail you at the same time)
Jerry-Thanks for sharing 🙂
Hey Jerry, thanks for your input too 🙂 Ya, I am getting your point also. You know, if we look at mid and small caps then % difference is huge so that profit % is also huge. So, if we invest big amount then with pain, return will also be more… Please read my second response and would also welcome your suggestions. Thx thx 🙂
Dear Basu,
My age is 30. My monthly salary is 80,000 and my living expense is Rs30, 000 per month. I am keeping six months of living expenditure as my emergency fund i.e. Rs2, 00,000.
My investment are in ratio of 30:70(Debt: Equity) for long term goals as below for 10-15 years
1. SBI – Blue chip – DP growth – Rs2000
2. ICICI Pru Value disc – DP Growth – Rs2000
3. Franklin small companies – DP Growth – Rs1000
4. DSPBR Microcap fund – DP Growth – Rs1000
5. Fixed Deposit – Rs3000
Currently I am paying LIC retirement policies of Rs5500 per month to get tax advantages. Along with I am going to start ELSS of Rs3000 from April 2017 in DSPBR tax saver for 10 years to save tax.
At the moment I have Rs5.5 lakh in my salary account and this will be keep on accumulating every month every month after my living expenses. I don’t want to keep the excess money i.e. Rs3, 50,000 ideally (after emergency fund) in my salary account as this will only get 4% interest. So kindly clarify my below queries with high liquidity.
1. I understand that the possible ways of money maximization techniques such as Swipe in Account, Monthly Income plan and debt funds etc. I am ready to invest 50% conservative and 50% moderate risk taking investment. Kindly advise the suitable options?
2. Please note that I was paying Home loan until last month and it is completed now. This was the reason for investing only Rs10, 000 out of my total salary of Rs80, 000. Considering this, can you please advise the tweaks required for my investment portfolio?
Hari-1) Without knowing the time horizon, it is hard for me to guide.
2) Repeating the same answer of what I said above.
Basu,
I am planning to invest equities for next 15-20 years.
My Financial Goals are
1. Daughter’s Education & Marriage – 2028 to 2035
2. Retirement corpus to beat the inflation . I am planning my retirement in 2037
If this is the case, kindly advise my query 1 &2 according to my data.
Hi Basu,
1. As mentioned I need to park my excess money somewhere so that I will get more interest than FD but if I need that money for any purposes (which exceeds my emergency fund), that should be easily withdrawn (but in reality, I can wait to grow for the next 2-3 years)? Kindly suggest that option or suggest some better fund?
2. I have a plan to exit my endowment insurance policies covering them with appropriate pure term plan – Can I come out immediately as I paid premiums for 3 years ? Is it wise?
3. After exiting of insurance policies with term plan cover, where I can park my existing premium amounts ? As stated earlier , I have below funds & SIPs.
SBI – Blue chip – DP growth – Rs2000
ICICI Pru Value disc – DP Growth – Rs2000
Franklin small companies – DP Growth – Rs1000
DSPBR Microcap fund – DP Growth – Rs1000
waiting for your response ! Kindly help!
Hari-1) Use Ultra Short Term Debt Funds.
2) Better to do that.
3) You have to identify the financial goals and based on that start investing.
Thanks Basu for such a precise and honest answer!!
For Question 3,
My goals are,
I. Daughter’s Education (2037 to 2040) ? Expected to have Rs 35 Lakhs considering inflation rate 6%
II. Retirement corpus of 1 crore ? I am planning my retirement in 2037. I have few land properties and I can sell and liquidate it for my retirement funds. Through this lets say I will get 50 L
Investment horizon is until my retirement. i.e. 15 to 20 years
Please advise that
a) Considering endowment exit and that amount flowing into mutual funds, now my portfolio would be as read follows. Again almost 30-70 debt ratio. Is this portfolio suffice for both goals?
• SBI – Blue chip – DP growth ?2000
• ICICI Pru Value disc – DP Growth ?1000
• Franklin small companies – DP Growth ?1000
• DSPBR Microcap fund – DP Growth ?1000
• DSPBR Tax Saver fund? 3000
• Fixed Deposit ?4000
b) Do I need to have separate portfolios for different goals or my existing portfolio suffice? If so kindly advise the funds with SIP amounts
c) If no new funds needed and more money to be invested in the existing funds, kindly suggest the required amount to achieve my goals?
Hari-1) Why two small cap (Franklin and DSPBR)? Retain anyone.
b) It is your comfort. If you can manage in a single folio, then you can do so. Otherwise, separate for each goal.
c) This many funds suffice. Regarding, investable amount, I can’t plan it and write down the whole planning here.
Thanks Basavaraj! Please advise the place where we can discuss about this?
I think I need to have separate portfolios for my goals as If I need to withdraw money for Goal1 which affects goal 2 when I have only one portfolio. Can you advise whether I need to have different funds for my different portfolios or choose the same funds as mentioned earlier?
My two goals are below and can invest 20 years atleatst through SIP.
I. Daughter’s Education (2030 to 2034) ? Expected to have Rs 35 Lakhs considering inflation rate 6%
II. Retirement corpus of 1 crore in 2040.
Hari-You can have same funds for all your goals. But you can create different folio numbers just to identify.
Sure, Thanks Basu!
Dear Basu,
To answer – why two small caps?
1. DSP fund is Micro cap and Franklin is small cap. I thought of getting benifit from Micro cap stokes along with small cap.
2. Portfolio overlap between funds is less than 15%
so now my portfolio comprising one micro cap, one small cap, one multi cap and one Large cap
Please advise still this affects the returns ?
Also I am planning to add “HDFC Children’s Gift Plan- Growth” (Balanced fund) of Rs 2000 per month for 10 years.
Kindly advise this fund selection is okay for child education?
Hari-If the overlap between DSPBR and Franklin fund is just 15%, then you can retain. Stay away from a product which claims to be made for CHILD FUTURE.
Hi Basu,
I am planning to invest 20000/ per month – in SIP. I have enough debt in forms of F.D.
Below are my goals and time horizon
1-Goal -Child education
Time horizon -(in 2026)
2- Goal- Retirement
Time horizon (in 2037)
Can you please advise if the below asset allocation is ideal for me?
1-ICICI Pru Focussed Bluechip Equity Fund – 4000/- (Large Cap)
2- HDFC Midcap Opp Fund – 2000/- (Mid Cap)
3-DSPBR Micocap Fund(G) – 4000/- (Small Cap)
4-Icici Pru Value Discovery fund(G) – 2000/- (Multi cap)
5-ICICI Pru Balanced Fund – 4000 /- (Balanced fund)
I would like answers for the below question.
How to distribute between different types of funds for each goal considering only equity part?
To make it clear:-
a)What is the ideal combination for child education goal? (Example- large cap+Balanced+Small cap)?
b) Similarly, what is the ideal combination for retirement goal (Ex-large cap+Multi cap+ Mid cap etc.)?
Regards,
Deb
Deb-Forget as of now about asset allocation within equity. But what asset allocation you are following between debt and equity? Whether your debt is easy enough to re-balance to make sure the same % of allocation?
Hi Basu,
I am allocating 70% equity and 30% debt. When you say same % allocation, do you mean 50 % equity and 50% debt?