I am 32 years old and my current salary is Rs 2 lakh per month. My monthly investments in mutual funds (MFs) are Rs 11,500—DSP BlackRock Top 100 Equity-Growth (Rs 1,000), HDFC Top 200 Fund–Growth (Rs 1,000), Franklin India Bluechip Fund Growth (Rs 1,000), ICICI Prudential Dynamic Plan Cumulative (Rs 1,000), HDFC Mid Cap Opportunities Fund Growth (Rs 1,500), Sundaram Select Midcap-Appreciation (Rs 1,000), Reliance Banking Fund-Growth Plan-Growth (Rs 1,500), ICICI Prudential Technology Fund–Growth ( Rs 1,500), Reliance Diversified Power Sector Fund Growth Plan-Growth (Rs 1,000) and Birla SunLife Midcap Fund Plan A–Growth (Rs 1,000). I have four unit-linked insurance plans in which I invest Rs 10,485. I have a fixed deposit (FD) of Rs 5.25 lakh and Rs 3 lakh family floater plan. From last year, I have been investing Rs 20,000 annually in infrastructure bonds. I have a parental house. However, I plan to buy another house. I pay Rs 27,000 as rent and an equated monthly instalment of Rs 6,500 for my car. My long-term requirements are Rs 50 lakh for my son’s education in the next 15 years and Rs 1.2-1.3 crore to buy a house within 10 years. Will my current investments help me meet my goals? I also have Rs 35,000 surplus per month. Please suggest a term insurance (Rs 1 crore) and what is your view on fixed maturity plans (FMPs)?
Your income level and your current savings do not match with each other. Your savings need to be increased.
Most of the funds you have picked have a good track record but you need to prune your funds selection. In the large-cap space, you can limit yourself to one fund. Similarly, in the mid-cap space, you have three funds. You can stick to HDFC Midcap Opportunities. You also have exposure to three sectoral funds. Unless you strongly believe in any sector, you should let the fund manager do the stock picking which will be the case in any diversified equity fund. You can add diversified equity funds to your existing portfolio. For this, you can consider HDFC Equity, Fidelity Equity and Franklin India Prima Plus. You can also consider a hybrid fund; HDFC Prudence and HDFC Balanced are good picks. Lastly, you can have some exposure to gold funds.
You should move your fixed deposits partially to FMPs. These debt funds are locked in for a specific time—six months to three years—and offer returns similar to FDs but are more tax efficient. You have invested too many Ulips. You need to check their performance, expenses under various heads, surrender charges and then decide if they need to be continued. You can consider buying a term plan online.
As far as your goals are concerned, you can achieve it. But ensure that you save regularly and increase your savings every year along with the increase in your salary.
Surya Bhatia is a certified financial planner and principal consultant, Asset Managers.
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