Q&A: Don’t let volatility derail your long-term investments
Equity as an asset class gives higher returns over a long duration
I invested in mutual funds 15 years ago and had opted for dividend payout. However, my residential address and my phone number have changed since then. I never updated the details with the fund house as I was getting payouts via cheques. How can I find out if any dividend has been declared since then and how can I claim them?
To update your address details, you need to contact the asset management company (AMC) and do a KYC (know-your-client) update. Investor addresses are maintained in a central KYC database maintained by regulated entities called KYC registration agencies (KRA).
A simple update form submitted with identity and address proofs can take care of this issue. Once done, all the AMCs where you have invested will get the updated address automatically.
Also, you should enquire why your dividends are being sent as cheques and not as digital transfers to your bank account. If there is a preference that you have selected in this regard, I would urge you to change it, since direct credit is the most trouble-free way of getting dividend and redemption payouts. Once you have taken care of these, you should talk to the AMCs to see if there are any unclaimed dividend payments. In that case, the AMC will reprocess the payments and ensure your money comes to your bank account.
I am 31 years old and have five systematic investment plans (SIPs) for long-term goals such as retirement, children’s education and their marriage. The funds are: Axis Long Term Equity Fund-Direct Growth (since 27 months); SBI Blue Chip-Direct Growth (17 months); Franklin India Smaller Companies Fund-Direct Growth (17 months); Mirae Asset Emerging Bluechip Fund-Direct Growth (1 month); and Aditya Birla Sunlife Advantage Fund-Direct Growth (1 month). I plan to stay invested for at least 20 years. Is my portfolio fine?
You are investing Rs33,000 every month across a range of funds. Every month, 42% of your investment goes to mid- and large-cap funds, 21% to a large-cap fund, another 21% to a small-cap fund, and the remaining 16% to a tax-saver fund (Axis Long Term Equity is a diversified tax-saving fund). Note that some of these categorisations could be subject to change during the streamlining of funds by asset management companies.
Right now, you have an aggressive portfolio with 100% equity allocation, which is fine for long-term investment horizons. Please make sure you stay invested in your portfolio not just during bull market phases but also during volatile conditions.
Also, please get your portfolio reviewed annually.
Srikanth Meenakshi is co-founder and chief operating officer, FundsIndia.com
Queries and views at firstname.lastname@example.org
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