Child Future Planning (Portfolio Allocation)

Q & A Forum › Category: Financial Planning › Child Future Planning (Portfolio Allocation)

Rashi asked 8 years ago

Hi Srikanth, I am planning to invest in my child future investment ( education or marriage etc). She is 3 years old. I have read through your articles on child planning, type of mutual funds, best equity funds etc. As per your formula about saving through SIP mutual funds, i should invest about 9000 INR monthly for next 13-14 yrs to achieve my goal amount. Below are the shortlisted funds

Franklin India Smaller companies - 2000/-
DSP BR Micro Cap - 2000/-
ICICI Prudential Value Discovery - 2000-
HDFC mid cap - 2000/-
Birla Sunlife Frontline equity - 1000/-

Could you comment if this portfolio allocation is fine between, small, mid, multi and large cap fund. I also checked the overlap between these funds.It ranges between 7% to 18% except Birla Sunlife and ICICI Prudential have 30% overlap. Is this alright? If not could you suggest an alternative fund for either of them. Thanks Rashi

1 Answers

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Sreekanth Staff answered 8 years ago

Dear Rashi, Kindly note that fresh investments in DSP micro-cap have been temporarily suspended. The rest of the portfolio looks fine. ICICI value discovery fund though it is a multi-cap fund, as of now, it has higher allocation to large-cap stocks, hence there is a slightly higher overlap with regular large-cap fund like Birla Frontline equity fund, but that should be ok. Suggested readings : https://www.relakhs.com/best-mutual-fund-scheme-risk-ratios/ https://www.relakhs.com/200-day-moving-average-dma-mutual-funds/ https://www.relakhs.com/mutual-fund-direct-plans-vs-regular-plans/

Rashi replied 8 years ago

Hi Srikanth, which fund would you suggest to replace DSP micro-cap

Sreekanth Staff replied 8 years ago

Hi..Asyou are picking Franklin Smaller Cos fund, which is a small cap oriented fund, then that should serve the purpose I believe..