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My MF Investments

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Topic starter

Hi Sreekanth,

Thank you for your kind proposal to review my MF portfolio.

I have created MF portfolio as below. I am investing some of these funds from past 6 years.

  1. kid Higher Education (6Y away)
    • PPFAS flexicap
    • Kotak Equity Hybrid
    • Bank FD
  2. Wealth creation (Self)
    • PPF+EPF
    • ICICI money market fund
    • Axis Growth Opp. Fund
    • Quant Quantamental Fund (Just started)
    • Direct Stocks
  3. Wealth creation (Spouse) ( at Present small contribution to only 4th Fund)
    1. HDFC short Term F
    2. PPFAS conservative hybrid fund
    3. SBI equity hybrid Fund
    4. DSP Nifty Midcap quality50 ( 6months old)
    5. Direct Stocks

I have parked 6months emergency fund in Bank FD.

Also I have accumulated crash fund which is about 10% of my portfolio. Is it fine to keep this much in cash waiting for market crash.

You’ve been very helpful.

4 Answers
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Dear Nagaraj,

Glad to know that you are following a Goal-based approach!

1 - Is your Bank FD (for kid's higher education) locked for 6 years? Or you accumulate multiple FDs (with smaller deposit amounts)?

2 - What is your strategy for picking 'ICICI money market fund' and HDFC Short term fund for long term wealth creation?

3 - May I know if you have adequate life and health cover?

4 - Have you calculated the Target Goal amounts for your Financial Obligations (goals)?

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Topic starter

Thank you for your kind reply.

My answers for the above points are as below:

1. Not locked, just created for Debt allocation. Please suggest.

2. Same as above, Debt allocation of the portfolio.

3. I have Health Insurance and Term Insurance.

4. Not exactly calculated. However I have kept some target amount.

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Hello,

In your wealth creation portfolios, instead of Debt funds, you may consider adding Large cap index funds like UTI Nifty 50 fund or UTI nifty next 50 fund.

You may park your Crash fund as 2 to 3 Fixed deposits for 3 to 9 months duration. But, you need to be ready to break them if need arises (if markets dip).

If you have some target amount, suggest you to kindly work backwards from the future date to current date and calculate the expected periodic investments, to reach those target goals. This gives you an idea, if to increase your contributions.

nagaraj Topic starter July 27, 2023 8:36 pm

@sreekanth Thanks for your kind review. Will consider your recommendation.

nagaraj Topic starter July 27, 2023 9:11 pm

@sreekanth Sorry to bother you again. confused, whether move debt to equity at one go or not. I will be glad to hear from you on this.

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You may stop future contributions to these Debt funds and start investing in the above suggested ones.

You can redeem the accumulated amounts of these debt funds and re-invest in direct equity (for long-term), when you believe that the markets have corrected quite a bit.

Please be aware of the tax implications on such redemptions.

Suggested reading:

Mutual Funds Taxation Rules FY 2023-24 (AY 2024-25) | Capital Gains Tax Rates Chart

nagaraj Topic starter July 27, 2023 10:59 pm

@sreekanth Highly appreciated.

Sreekanth Reddy July 28, 2023 9:49 am

You are welcome dear.
Keep visiting Relakhs and spread the word about our work among your friends and well-wishers plz..
Cheers!

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