As for future tax-saving requirements, you can consider Invesco India Tax Plan or Aditya Birla Sun life Tax Relief 96
Investments should be in a mix of schemes that have had a better track record of performance and consistency
I am 28 years old. I am an aggressive long-term investor (15-20 years). I have been investing ₹2,500 each via systematic investment plans (SIPs) in SBI Blue Chip fund, L&T Emerging Businesses fund, HDFC Small Cap fund, Motilal Oswal Multi Cap 35 fund and ABSL Pure Value fund for the last one year. I finalized these funds based on my own research. All funds are direct growth plans. Please review these funds and let me know if my selection is okay.
If you invest ₹12,500 a month for 20 years, you can expect to have more than ₹1.2 crore in your portfolio by the end of your tenure (assuming 12% CAGR portfolio returns over the period). You have an aggressive, all-equity portfolio with one large-cap fund, one value-oriented diversified fund, one multi-cap fund, and two small- and mid-cap funds. The fund choices are a mixed bag in terms of quality and track record. I would recommend a shuffle of funds in this manner—you can replace the L&T fund with the L&T Midcap fund from the same fund house. Instead of SBI Bluechip fund and HDFC Small Cap fund, you can go with HDFC Top 100 fund and SBI Small Cap fund respectively. The ABSL fund can be replaced with a multi-cap fund from the same fund house—the ABSL Equity fund. Once you do these changes, you will have a similarly aggressive portfolio as you do presently, but in a set of funds that have had better track records of performance and consistency.
I started investing in Reliance ELSS (equity-linked savings scheme) in 2016. It has run into loss throughout this three-year period and now has been taken over by Nippon Insurance. Should I continue investing in this mutual fund or consider shifting to another ELSS? If yes, which fund should I choose?
It is time to switch out of this fund and move to a better fund for your tax-saving needs. This fund ranks near last in its category in terms of returns over one-, three-, and five-year terms, as of current date. In the period that you mention, while the funds in this category on average returned 11.31% (in three years, annualized), this fund returned 3.96% annualized.
You should move your investment out of this scheme as and when the lock-in period expires and invest in funds from the Mint50 list of schemes. As for your future tax-saving requirements, you can consider Invesco India Tax Plan or Aditya Birla Sun life Tax Relief 96.
Srikanth Meenakshi is co-founder, PrimeInvestor.in. Send in your queries and views at firstname.lastname@example.org