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I am 31 years old and have the following investments in mutual funds, apart from the yearly 1.5 lakh in Public Provident Fund (PPF) and 50,000 in the National Pension System (NPS): lump sum in Axis Liquid Fund (for exigencies) and HDFC Liquid Fund (for wife’s current educational needs); systematic investment plans (SIPs) of 5,000 each in Axis Blue Chip Fund (systematic transfer plan from Axis Liquid Fund), Axis Long Term Equity Fund, HDFC Hybrid Equity Fund, SBI Blue Chip Fund, SBI Magnum Multicap and Franklin Equity; and of 1,000 in Axis Banking and PSU Fund. I would like to diversifying into international funds. I want to buy a house in five years, and have long-term goals of children’s education and having a retirement corpus of around 10 crore-15 crore. Am I investing in the right schemes?

—Name withheld on request

Given that your data is not sufficient and your requirement is long term, we are assuming that you will need the corpus for your children’s education in 15 years and you’ll retire at 60. We can assume a return of 8% (may be even lower) for PPF and NPS and 9% for mutual funds. Assuming a 15-year tenure for your PPF, at a return of even 8%, you will have only 40.7 lakh. With NPS, at 50,000 per year, the corpus will grow to 52 lakh if it delivers 8% in 29 years.

Your 31,000 in SIPs for 29 years at a conservative 9% will grow to about 5.1 crore. At the returns assumed, you will need to double your SIPs to reach your goal of 10 crore. So, the best is to gradually increase your savings.

Coming to your fund choices, as a broad observation, avoid excessive exposure to a single fund house. Even if there is no risk with the asset management company, there will be style duplication. This is something we have seen in Axis funds. Hence, in future add less to these.

On specific funds, consider stopping SIPs and later exiting HDFC Hybrid Equity, SBI Bluechip and Franklin India Focused Equity. Hybrid funds in general are showing high volatile performance and older ones like HDFC have not fared well. Instead shift them to your existing equity and debt fund (Axis Banking and PSU). Use Parag Parikh Long Term Equity for the equity part. You will get some international exposure through that. Shift SBI Bluechip Corpus too into this fund once your SBI holdings cross a year. One large-cap fund should do.

Instead of Franklin Focused Equity, use a mid-cap fund like Kotak Emerging Equity to provide some pep to your portfolio. Of course it will make it a bit more volatile. But it should be okay for a long-term portfolio like yours.

Srikanth Meenakshi is co-founder, PrimeInvestor.in

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