Mutual Fund Portfolio review - First time investor

Q & A Forum › Category: Mutual Funds › Mutual Fund Portfolio review – First time investor

Gaurav asked 8 years ago

Hi Sreekanth, Thanks for the blog, it's extremely helpful. I'm 24 years old single, have take home salary of 40K per month. I have not made any investment yet but wants to start it now after realizing my mistakes of not investing earlier. My monthly expenses are 17K and wish to invest 23K per month in mutual funds. I have 1.9L in my savings account. I am planning to keep maximum 20K in the saving account, 50K in Liquid funds as emergency money and remaining 1.2L in following mutual funds as lump sum. I have parents but they are not financially dependent on me. I wish to invest for more than 10 years. ## My Portfolio: Lump-sum LIQUID FUNDS (Emergency saving) 50K 1. Axis Liquid Fund - Direct Plan (G) 1.2L in following funds for 1 time in same proportion as SIP (25K each in small cap, 14K each in other funds) SIP ELSS 2.6K 2. Axis Long Term Equity Fund - Direct Plan (G) 2.6K 3. Birla Sun Life Tax Relief 96 - Direct Plan (G) Balanced Fund (Less profit in Bull phase but less loss in Bear phase) 2.6K 4. HDFC Balanced Fund - Direct Plan (G) Small-Mid cap funds(High returns - High risk) 5K 5. DSP BlackRock Micro Cap Fund - Direct Plan (G) 5K 6. Reliance Small Cap Fund - Direct Plan (G) Large cap funds 2.6K 7. SBI Blue Chip Fund - Direct Plan (G) Diversified Equity 2.6K 8. ICICI Prudential Value Discovery Fund - Direct Plan (G) No fund is overlapping more than 25% with any other fund I occasionally earn more from freelancing but that is not consistent and guaranteed earning(earned 60K in last 3 months) so please suggest me where to invest that extra amount. I have not yet bought any kind of insurance policy so please advise me about that also to minimize tax deductions. Thanks in advance

3 Answers

1 Vote Up Vote Down

Best Answer

Sreekanth Staff answered 8 years ago

Hi Gaurav, I have to appreciate your analysis and clear cut thinking. After considering your age, financial profile & investment horizon - Your MF portfolio looks good. But somehow I sense that there are too many funds i.e. 7 Equity funds in your portfolio. Anyways, you have checked the portfolio overlap so shouldn't be an issue. You may consider investing the EXTRA income in Small cap & Diversified Equity funds/ELSS funds. Your other priorities can be;

Consider buying a stand-alone Personal Accident Insurance cover.
Buy a Health Insurance plan for self. You can claim the premium as tax deduction u/s 80D. Are your parents covered with health insurance?
In case if you hare falling short of investment requirement u/s 80c, suggest you to invest the EXTRA income in ELSS funds and this can be claimed as tax deduction.

Kindly go through below articles;

You are not too late to invest :) Infact you are starting your investment journey at the right time. All the best!

0 Vote Up Vote Down

Gaurav answered 8 years ago

Thanks a lot for the answer. I really appreciate your time and help. Thanks a ton!!

0 Vote Up Vote Down

Tejesh1100 answered 5 years ago

First one should understand what mutual funds are: MFs are investment vehicles that collects money from several investors, and the investment in securities like stocks, bonds and debts, and other monetary instruments. Before you can invest you need to have a bank account and you must be a KYC(Know Your Customer) number along with PAN number and Aadhaar number.
You should understand what kind of mutual funds are available and which you will need to invest in according to your risk appetite is it Equity or Debt or Both(Hybrid funds).
Which funds do you invest in?