Choose equity funds in keeping with your risk profile

I am 35 years old and have a daughter who is one year old. I started two systematic investment plans (SIP) in 2017 with a three-year lock-in period: ₹5,000 each in DSP Tax Saver and Nippon India Tax Saver. Recently I bought a new fund offer of Nippon India Mutual Fund for ₹10,000. I opened a Sukanya Samriddhi Yojna for my daughter last month by making a deposit of ₹20,000. I have two goals: my daughter’s higher education and have a retirement corpus. My monthly income is ₹90,000-1 lakh. Please review my portfolio

—Sanjay Lenka

It is good that you are starting a corpus for your daughter’s education from her initial years. The investments are helping you save tax is an added advantage. You have started monthly investments for ₹10,000 in two equity-linked savings schemes (ELSS). However, Nippon India Tax saver is an underperformer so should be changed. While you can redeem or switch a part of the investment which is long term (held for more than three years from the date of purchase of each transaction), short-term investment (held for less than three years) needs to be held till the lock in gets completed. Also, it is better to avoid any new schemes (NFOs) and it is recommended that you pick and invest from among existing performing schemes. It will also be better to increase investments in your existing monthly schemes.

It is also recommended that you increase your monthly investments. Calculate the surplus of your income over expenses and invest that regularly. Create various baskets of investments. As all your financial goals are long-term, sticking to the equity asset class via mutual funds, subject to your risk profile, is the way forward but do make an emergency corpus which can be invested in short-term debt funds.

Also, ensure that you are adequately covered for life, and you and your family have health insurance.

Surya Bhatia is managing partner of Asset Managers. Queries and views at mintmoney@livemint.com