I am a 34 year old unmarried government employee on a net salary €42,000. I have an investment horizon of 15-20 years. My investments include deposits of approx €4.5 lakh, as well €4 lakh in the Public Provident Fund (PPF). I have invested in the following systematic investment plans (SIPs): SBI Equity Hybrid Fund— €1,000, SBI Small Cap— €500, Kotak Standard Multicap — €1,000, Mirae Asset Large Cap €1,000, Mirae Asset Emerging Blue Chip— €1,000, Mirae Asset Mid Cap €1,000, Axis blue chip — €1,000, Axis Midcap— €500, Axis Small Cap— €500, ICICI blue chip — €500, Nippon Small Cap— €500. I also wanted to start a SIP in the PGIM Midcap Opportunity Fund.
I am a 34 year old unmarried government employee on a net salary €42,000. I have an investment horizon of 15-20 years. My investments include deposits of approx €4.5 lakh, moreover €4 lakh in the Public Provident Fund (PPF). I have invested in the following systematic investment plans (SIPs): SBI Equity Hybrid Fund— €1,000, SBI Small Cap— €500, Kotak Standard Multicap — €1,000, Mirae Asset Large Cap €1,000, Mirae Asset Emerging Blue Chip— €1,000, Mirae Asset Mid Cap €1,000, Axis blue chip — €1,000, Axis Midcap— €500, Axis Small Cap— €500, ICICI blue chip — €500, Nippon Small Cap— €500. I also wanted to start a SIP in the PGIM Midcap Opportunity Fund.
I pay an Equalized Monthly Rate (EMI) of €12,000 to repay a home loan from €12 lakh and contribute €2,750 per month to the General Provident Fund (GPF). I can take a reasonable level of risk and want to know if my investments will ensure a reasonably good corpus.
I pay an Equalized Monthly Rate (EMI) of €12,000 to repay a home loan from €12 lakh and contribute €2,750 per month to the General Provident Fund (GPF). I can take a reasonable level of risk and want to know if my investments will ensure a reasonably good corpus.
Subscribe to read more
—Name withheld upon request
While your portfolio is good overall, we believe it may need a bit of restructuring to better align with your goals. We advise you to place your SIPs in the hybrid fund SBI Equity and invest the amount in a passive fund that invests internationally in order to geographically diversify your portfolio. We recommend you to consolidate your small cap programs as there are three programs in the portfolio and stop your SIPs in SBI Small Cap and Axis Midcap and consolidate the SIPs in Nippon India Small Cap Fund. You could also stop the SIP in Mirae Asset large-cap funds and use an index fund instead.
Continue your SIPs in Mirae Asset Emerging Bluechip and Mirae Asset Midcap Fund as these funds have outperformed over time. The new SIP you plan to launch may also be allocated to the Mirae Asset Midcap Fund to consolidate your portfolio rather than adding the PGIM midcap opportunities to the portfolio.
Assuming your salary grows at 8% per year, expenses increase at 6% per year, through a combination of PPF, GPF, and mutual funds, you should have a meaningful retirement fund that allows for a comfortable retirement at age 60 should .
My sister is getting married in 15 months. My family members want to save some money for the wedding for this short duration. Where should we park our funds?
—Name withheld upon request
Given that you have a short-term holding period, it’s important to stay away from avenues in volatile assets like stocks. We recommend a mix of ultra-short funds with the high credit quality of the underlying bonds and arbitrage funds. Arbitrage funds take advantage of the differences between the cash and futures markets and maintain a fully hedged portfolio. These funds also have tax arbitrage versus traditional fixed income instruments, as they are taxed like equity at a long-term capital gains tax rate of 10% if held longer than 12 months.
Vishal Dhawan is a Certified Financial Planner and Founder of Plan Ahead Wealth Advisors, a Sebi registered investment advisory firm.
Comments are closed.