I am a 51-year-old retired single woman. I have Rs 60 lakh in my PPF, Rs 12 lakh in tax free bonds, Rs 1.25 crore in bank deposits, Rs 93 lakh in stocks and Rs 89 lakh in mutual funds. The shares are in Asian Paints (1,400 shares) RIL (424) and TCS (136). My mutual fund portfolio comprises Axis Bluechip (Rs 8.38 lakh), Kotak Flexicap (Rs 14.74 lakh), Mirae Asset Emerging Bluechip (Rs 2.77 lakh), Mirae Asset Hybrid Equity (Rs 3.02 lakh), Mirae Asset Large Cap (Rs 7.40 lakh), Parag Parikh Flexicap (Rs 59,000), ABSL Corporate Bond (Rs 3.73 lakh), ABSL Savings Fund (Rs 13.60 lakh), Kotak Savings Fund (Rs 13.43 lakh), SBI Magnum Ultra Short Duration (Rs 18.12 lakh) and ABSL Liquid (Rs 3.29 lakh). Currently, only one SIP of Rs 5,000 is running in Mirae Asset Emerging Bluechip. Is my portfolio suitable as long-term investments? I can invest Rs 30,000 a month. Please suggest options.
Naveen Kukreja, CEO and Co-Founder, Paisabazaar.com, replies: Your total investment portfolio is worth Rs 3.8 crore, about one-third of which is in stocks and other equity related instruments and the rest in fixed income instruments. I am assuming you have an income source to derive an investible surplus of Rs 30,000 after catering for expenses. You do not need to dip into existing investments to sustain your post-retirement expenses. My first suggestion would be to steadily increase equity allocation to 50-60% of your total portfolio, after factoring in risk appetite and time horizon. I also suggest you shift your direct stocks exposure to equity mutual funds if you do not have the expertise to take buy and sell calls on your own. Continue with your existing investments in Axis Bluechip, Mirae Asset Emerging Bluechip, Mirae Asset Hybrid Equity, Mirae Asset Large Cap, Parag Parikh Flexicap and Aditya Birla Sun Life Corporate Bond Fund. You may shift your investments in Kotak Flexi Cap to Parag Parikh Flexicap Fund due to the former’s continued underperformance. I will also suggest you continue with your existing SIP in Mirae Asset Emerging Bluechip whereas the rest of your monthly investible surplus can be invested in either of these two large cap index funds —Tata Index Sensex or HDFC Index Sensex Fund —through SIPs of 1 year tenure. In case you have a taxable income, you can invest in either Mirae Asset Tax Saver and/or Axis Long Term Equity Fund through SIPs to save income tax under Section 80C. I suggest you park your emergency fund in bank deposits offering interest rates yielding above 6% p.a. The rest of your holdings in bank deposits, ultra short duration funds and liquid funds should be moved to short duration debt funds for generating higher returns. You can consider ICICI Prudential Short Term and HDFC Short Term Debt Fund.
I am 26, unmarried and earn Rs 25,000 a month. I want to invest Rs 1,000 a month in mutual funds through SIPs. I am paying an EMI of Rs 15,000 for an education loan and also pay a premium of Rs 20,000 a year for a LIC policy. I am also investing Rs 1,000 a month in PPF. Please suggest funds I can invest in. My investment horizon is 15 years.
Vidya Bala, Co-Founder, PrimeInvestor.in, replies: First, we would like you to understand the kind of insurance policy you have taken. If it is a pure life cover, fine. But they typically come with lower premiums. If it is a money back, there is a high chance it is a low returning option. Please see if you need it now. Otherwise prefer PPF over it. On Rs 1,000 a month, go with a simple index fund like UTI Nifty 50 index plan. It won’t need you to track actively. You can slowly increase investment as your savings increase.