BackAsk Mint Money | MIPs typically invest up to 80% in debt and the rest in equity
Ask Mint Money | MIPs typically invest up to 80% in debt and the rest in equity
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I am 35 years old and want to plan for my retirement. My investment horizon is 20-25 years. My present portfolio is as follows: I have monthly investments in HDFC Top 200 Fund (1,000), Reliance Regular Savings Growth ( ₹ 5,000), HDFC Equity Fund ( ₹ 1,000) and Reliance Growth Fund ( ₹ 4,000). Are the funds good for the long term? I have ₹ 4 lakh. Please suggest some funds where I can invest.
—Suraj Jain
Equity asset class is the recommended asset class for such kind of tenor. As far as funds are concerned, you can spread your portfolio and you need to do an asset allocation.
You have a large-cap fund in HDFC Top 200. The amount invested is quite low. In diversified funds, you are investing ₹ 6,000 and you have exposure to two funds. Between the two, you can continue HDFC Equity and can stop Reliance Regular Saving.
Also, your exposure in mid-cap funds is through Reliance Growth. The fund has had an average run. However, for the last few quarters, the fund has shown good performance and you can hold on.
You need to review the funds regularly and in case of under/non-performance over two quarters, you should consider switching the fund.
In addition, you can also consider hybrid funds as a category. HDFC Prudence and HDFC Balanced are good consistent performers in this space.
For the cash you have, you can look at the existing funds and can enter in the same via a systematic transfer plan or STP. Alternately, you may consider debt funds. High debt yields make this asset class attractive as going forward it is likely that interest rates will come down.
Dynamic bond funds is a good asset class in this category and here Birla Sun Life Dynamic Bond is a good fund. Another asset class which is worth considering is monthly income plans. This is a mix of debt and equity; typically 80% is in debt and 20% in equity. Reliance MIP and HDFC MIP have done well in this category.
Besides investments, you should also make sure that you have adequate insurance. As a thumb rule, you can have six to seven times of your income as your sum assured. Look at term insurance here. It is recommended that you buy the same via the online mode.
Queries and views at mintmoney@livemint.com
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