I invest Rs 5,000 through a systematic investment plan (SIP) in HDFC Top 200 (Rs 1,000), DSP BlackRock (Rs1,000), Tata Equity Infra (Rs1,000), IDFC Premier Equity Fund (Rs1,000). Is my selection okay? I want to increase my investment by another Rs 5,000. Suggest some funds.
You have not indicated the scheme you are holding in DSP BlackRock. I am assuming it is either DSP BlackRock Top 100 or DSP BlackRock Equity, the flagship schemes from the fund house. Also, I suspect that you are investing Rs 2,000 in IDFC Premier Equity fund since that is the minimum SIP amount for that scheme. If the assumptions are right, you have chosen your schemes well for SIP and you have a well-diversified portfolio. For the additional Rs5,000, you don’t need to look for new funds. You should bolster your current portfolio by adding Rs1,500 each to HDFC Top 200 and the DSP BlackRock scheme. With the remaining Rs2,000, you can either choose a conservative route and invest in a hybrid scheme such as ICICI Prudential Dynamic or take an aggressive route and invest in HDFC Midcap Opportunities.
I am 45 years old and have been investing in mutual funds through SIPs quite some time now. I invest Rs 2,000 every month in ICICI Infrastructure Fund (December 2007), Reliance Growth Fund (July 2008), Sundaram Smile Fund (December 2007), while I started an SIP of Rs 5,000 each in December 2010 towards DSP BlackRock, HDFC Top 200, Sundaram Select Midcap, Reliance Regular Saving, Tata P/E. I want to build a corpus of Rs 25 lakh for my daughter’s marriage who is 14 years now. I also want Rs 2.5 crore for my retirement. Is my fund selection correct or do I need to make any changes?
Let us make some assumptions with regard to the time frame for your financial goals. Assuming you retire at 60 years, you have 15 years to accumulate Rs 2.5 crore. Also, let’s assume your daughter will get married after 10 years. Assuming a 15% long-term compounded annual growth rate from the equity markets, you will need to save Rs 40,000 per month for your retirement and Rs 9,500 per month for your daughter’s marriage. You should increase your savings over a period of time.
Split your portfolio based on these goals. Each portfolio should have its own asset allocation plan between different types of investment instruments and should be monitored separately. The funds you have listed cover almost all categories of assets. You have five large-cap-oriented funds, two small/mid-cap-oriented funds and a sectoral fund. You can consider replacing one of the two mid-cap funds with HDFC Midcap Opportunities fund, but the other schemes are fine.
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