I am 43, and work as a professor. I need Rs 1 crore by 2024 for my son's overseas higher education. My present portfolio is ICICI Bluechip (Rs 22 lakhs) and the balance portfolio is worth Rs 31 lakhs. The latter is done via monthly SIP's in ICICI Prudential Equity and Debt (Rs 10,000), ABSL Equity (Rs 15,000), Mirae Asset Large Cap (Rs 15,000), Reliance Small Cap (Rs 5,000) and HDFC Small Cap fund (Rs 5,000).
- Dr Aruna
The funds in your portfolio are good and you can continue with your existing investment and SIPs. Given your goal is only 5 years away, we would consider you start moving investments into a mix of fixed income and equity funds, instead of a pure equity portfolio. This is being done to reduce the volatility of the portfolio and reduce the probability of large drawdowns in the portfolio value as you approach closer to your goal date.
To start with, allocate 30% of your portfolio towards Fixed Income funds like Banking & PSU Debt & Corporate Bond Funds. As you approach closer to the time period of the goal, ramp up your fixed income allocation sequentially.
Increase your SIP amounts by 15% annually to ensure you have a good chance of meeting your investment goal in 2024.
I'm investing in L&T Midcap for the past 1 year (Rs 5,000 SIP). The fund has underperformed the category and benchmark significantly last year. Should I be concerned and switch to some other funds in the category like the Axis Midcap or it was just one bad year for the fund and it'll bounce back? Should I increase my SIP amount?
- Aditya
We recommend you continue to hold your investment in the fund. The fund has been a stellar performer over the long term. Soumendra Nath Lahiri is a very experienced manager and has done a stellar job of managing the fund. Every manager will go through short term relative underperformance, which is a function of short term market cycles. Over a full market cycle we expect the fund to do well.
Increasing your SIP amount should depend upon your overall risk return objectives and investment time horizon.
I am new to funds. My risk appetite is moderate. My SIPs are Rs 10,000 each in ICICI Prudential Blue Chip, Axis Blue Chip, Kotak Standard Multicap, and Rs 5,000 in HDFC Small Cap. I want to invest an additional Rs 15 lakh as lumpsum investment. My investment horizon is 26 years.
- Snehanshu
The funds in your portfolio are good. You can view our observations on these funds in the below link.
With regards to the lumpsum investment, stick to 65% in equity and 35% in debt. Your equity investments can be staggered over a period of 6 months. Given your risk appetite and time horizon, you can look at a small-cap or mid-cap fund.
View our fund analysis here.
Presently invested in lumpsum Axis Blue Chip (Rs 50,863), Franklin Ultra Short Bond - Institutional (Rs 1,10,357), Kotak Standard Multicap (Rs 24,767), Mirae Asset Emerging Bluechip (Rs 10,495), SBI Banking & Financial Services (Rs 50,175). I need to save for my child’s education (15 years) and retirement (19 years). I have to invest Rs 5 lakhs. I plan for Rs 30,000 SIP.
- Soumendra B
Your current investment is skewed towards Ultra Short Duration Fund. Given your investment time horizon and goals we recommend you could build a portfolio with an allocation of 70-75% in equity and the rest in fixed income.
The current funds you are invested in are fine.
For your lumpsum investment, since you already have a reasonable allocation towards Ultra Short Duration funds, we recommend allocating the lumpsum towards equity funds. Since you have a reasonably long investment horizon, you can allocation a portion towards mid-cap funds too. Stagger these investments over the next 6 months to reduce timing risk. Around 60% of the SIPs can go towards Large & Multicap Funds, and 40% towards mid-cap funds.
For SIP investments, on an ongoing basis you can make the following allocations:
- Short Duration/ Corporate Bond Funds: 20-25%
- Large Cap & Multicap Funds: 50%
- Mid & Small Cap Funds: 25-30%
You can find a list of highly rated funds here.
I am a 42-year old investor. These are my monthly SIPs. HDFC TOP 100 (Rs 7,5000), HDFC Small Cap (Rs 7,500), SBI Small Cap (Rs 2,500), SBI Small Cap (Rs 2,500). L&T Midcap (Rs 7,500), Reliance Small Cap (Rs 5,0000), Mirae Asset Emerging Bluechip (Rs 2,500).
- Rahul
The funds you are invested in are good, but you are overallocated towards mid and small cap funds. We recommend reducing your relevant exposure to 35-40%. Reallocate this to large cap/multi cap funds. Additionally allocate 20% towards fixed income funds for liquidity and risk diversification.
You can pick from this list.
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