Morningstar recommends that readers consult their financial advisers. Below are just broad guidelines. You can view our fund analyst reports here and check performance of funds here.
I am 38-years old. For the past few months, I started investing in the following SIP's:
- L&T India Value Fund: Rs 5,000
- SBI Bluechip Fund: Rs 5,000
- SBI SmallCap Fund: Rs 5,000
- Tata Digital India Fund: Rs 5,000
- L&T Midcap: Rs 10,000
- SS
Your current portfolio allocation:
- Value Fund: 16.67%
- Large Cap: 16.67%
- Mid Cap: 33.33%
- Small Cap: 16.67%
- Sector – IT: 16.67%
Your portfolio has a huge skew towards mid and small cap stocks. We recommend reducing this exposure and increasing it to large-cap and multi-cap funds. Large-cap funds should form the core holding on an investor’s portfolio since they provide stability.
We recommend that you exit the technology fund. Ideally a sector/thematic fund should not be more than 5-10% of an investor portfolio and that too if they would like to express a specific view regarding a sector and are in position to take such a call, especially with respect to entry and exit. The other factor you must consider is that you work in the IT sector, so your variable pay/ stock options are linked to how the tech sector does. By investing into a technology fund, you further increase your dependence towards one sector.
14 days ultra short-term debt funds giving 19%+ rate of return. What are the risks?
- Arun Sawhney
The simple annualized return of debt funds over the short term can be misleading. Always consider the absolute returns of a fund for periods less than 1 year. Ultra Short Duration Funds maintain a duration between 3 to 6 months. They are ideal for an investment horizon up to 1 year.
Looking at the low interest rate two years back, I had invested almost 80% of my retirement corpus in ICICI Balance Fund. My average cost is around Rs 28. Please advise. I can hold for another 5 Years.
- N K Chandak
We are clueless regarding the constituents of your portfolio, but 80% into one single fund is not ideal. While ICICI Equity & Debt Fund (erstwhile ICICI Balanced Fund) is a well-managed strategy, it is important to note that the fund will invest between 65-80% of the portfolio into equities. Given that you’re a retiree, we would ask you to consider your risk-return profile and more importantly your liquidity needs. If you are relying on your investments to generate a regular income for monthly expenses, we would urge you to reallocate a significant portion of your portfolio towards fixed income funds (65%) where returns are less volatile, and the balance in equity (35%) for growth.
You can invest into a mix of Ultra Short Duration, Short Duration, Corporate Bond, Large Cap and Multi Cap funds.
I am 40 years old. I want to accumulate Rs 2 crore in 15 years. Please guide me to the appropriate funds and the amount required every month to achieve my goal. Can I do an SIP for my 13-year old child?
- Hitesh Sawlani
- Corpus: 2 crore
- Investment period: 15 years
- Monthly SIP: Rs 40,000
- Asset Allocation: Equity:Debt = 70:30
- Fund Category Allocation: Large Cap/Multi Cap (40%), Mid cap (20%), Small Cap (10%), Short Duration/Corporate Bond (25%), Low duration (5%)
- Yearly Increase in SIP: 10%
Yes, you can register a SIP for your child as a sole holder with you as the guardian.
I have been investing in SBI Bluechip and HDFC Hybrid Equity fund for the past 2 years. Which one must I stop?
- Subhadip
Both are well managed funds. SBI Bluechip is a large-cap oriented equity fund and has an excellent track record over the long term. HDFC Hybrid Equity invested 65-80% of the portfolio into equities with a large-cap bias and is an extremely well-managed strategy. Investing in equity can create significant wealth over the long run, but it is important for you to stay invested.
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