Review choice of funds every year to ensure the portfolio remains healthy2 min read . Updated: 05 Aug 2020, 11:13 PM IST
The value of ₹4 crore-5 crore would be significantly different from today in 25 years
I am 31 years old. My long-term portfolio is: ₹4,500 in Aditya Birla Sun Life Tax Relief 96 and Axis Equity Saver; ₹2,000 in Mirae Asset Emerging Bluechip; and ₹1,000 each in L&T Midcap, ICICI Prudential Bluechip and Franklin US Feeder. The short-term investments are ₹1,500 in Franklin India Savings and ₹1,000 in Axis Banking & PSU Debt. I also have a lump sum of ₹10,000 each in L&T Money Market and Axis Banking & PSU Debt. My medium-term investments are: ₹500 in ICICI Prudential Balanced Advantage, plus I have systematic transfer plans (STPs) of ₹1,000 each for 10 months in Canara Robeco Conservative Hybrid and ICICI Prudential Balanced Advantage. Please review my portfolio.
It’s not clear what you mean by long-, short- and medium-term investments. I am assuming they are all part of the same portfolio, and you have a time horizon of at least seven years. I am also assuming that you have a total of ₹4,500 in equity-linked savings schemes (ELSS) and not ₹4,500 in each fund. You can stop the systematic investment plan (SIP) in ABSL Tax Relief 96. There is no need to have multiple ELSS funds for smaller amounts, and Axis Equity Saver is the better of the two. Also, you can stop SIP or STP in L&T Midcap, Canara Robeco Conservative Hybrid and ICICI Pru Bluechip. This is to reduce the number of funds.
Additionally, the ICICI fund is lagging behind the index. Once you cross the exit load period or when you need the money, you can exit these funds. You can also exit L&T Money Market and reinvest in Axis Banking & PSU Debt. You would run your SIPs as follows: ₹4,500 in Axis Long Term Equity and ₹4,000 in Axis Nifty 100. Please redirect STPs to ICICI Prudential Balanced Advantage, and retain the SIPs in Mirae Asset Emerging Bluechip, Franklin US Feeder, Franklin India Savings, Axis Banking & PSU Debt and ICICI Prudential Balanced Advantage.
I am 30 years old and invest ₹10,000 in Axis Bluechip; ₹6,000 in Mirae Asset Emerging Bluechip; as well as ₹5,000 each in ICICI Prudential Bluechip, Kotak Standard Multicap, Nippon India Small Cap and Motilal Oswal Nasdaq 100 FoF. All are direct growth plans. I have a long-term horizon of 25 years with a target of ₹4 crore-5 crore for retirement. I plan to raise SIPs by 10% every year. Please review my portfolio.
With your amount of investment ( ₹36,000 a month), it is very likely that you will reach your target of ₹4 crore-5 crore with either time to spare or extra corpus. This would be true if you keep increasing your monthly investments every year. However, please note that the value of ₹4 crore-5 crore would be significantly different from today in 25 years. For example, if you assume a modest inflation of 5% in the next 25 years, what is worth ₹4 crore today would need to be ₹13 crore at the end of the term. Regarding your portfolio, you are investing into a diverse set of funds including an international fund. The funds are of good quality, including Nippon India Small Cap. Please continue investing in this portfolio, but remember to review the funds every year to ensure the portfolio remains healthy.
Srikanth Meenakshi is co-founder, PrimeInvestor.in. Send in your queries and views at email@example.com
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