Portfolio construction

Hi, To be frank there is no right or wrong approach for this kind of scenario. Personally, I have three goals, I maintain common funds (if required) across portfolios, but created different SIPs with different amount based on my target goal value. Kindly read: https://www.relakhs.com/my-mutual-fund-portfolio-mf-picks/ So, you can create four different portfolios with different SIP amounts but can maintain same set of funds, as all your goals are long-term ones. Suggested articles : https://www.relakhs.com/calculate-kids-education-goal-amount/ https://www.relakhs.com/retirement-planning-calculator-3-easy-steps/ https://www.relakhs.com/best-mutual-fund-schemes-2017/ https://www.relakhs.com/best-mutual-fund-scheme-risk-ratios/

" you can create four different portfolios with different SIP amounts but can maintain same set of funds, " Thanks for instant reply. When you suggest common set of funds for all the goals, How to track individual goals and risk associated with them, My plan is to keep single multicap fund per goal and for longer goal (20+ years, Marriage of KIDS) - I can invest in Midcap fund. and later point it can be switched to Balanced/Multicap fund Please share your thought on my proposed plan. 

Hi, My opinion is same as yours, did you get my point? As opined by you, a Multi-cap can be part of all your goals. But the allocation of SIP amount can be different based on your Goal target amount. The risk which is specific to that Fund will remain same across your portfolios. Yes, you strategy to switch to a balanced fund or some other safer bet (relatively) as the goal year approaches, is prudent.  

Now i am clear what you mean different SIP Amount. What i am trying to explain is, i am not keeping same funds for all the goals. Here is my plan. Retirement : 1  Large cap , 1  Mid cap   = 2 Funds  Son Education : Single Multicap Daugther Education : Single  Multicap Marriages :  1 Mid cap fund. So all are unique funds. Not going to use same set of funds across portfolios.

Hi, You may follow your strategy. One suggestion can be, try to identify multi-cap funds or mid-cap funds which have low portfolio overlap (as of now). https://www.relakhs.com/mutual-fund-portfolio-overlap-comparison-tools/

I have found that Overlap as follows Mulitcap : 35%
Mid cap : 36 % My query  is,  This overlap will be there always whenever fund manager buy/sell stocks,
We can not completely  avoid this overlap. But what is the permissible range of overlap for our selection of funds. I have notice that , you have constructed your portfolio with each fund from each category(Balanced/Mid/ELSS/Small).   Have you designed it just because of avoid overlap or any specific reason.  

Hi, Yes, it may be next to impossible to avoid overlap among the portfolios. But point is, when investing its advisable to pick funds from different fund houses and also better to avoid if overlap is say as high as 60% or 70% (example). There is no point in having two of such funds in portfolio. Kindly note that Overlap is just one of the tools/factor to consider when selecting the funds, its not THE FACTOR..  

Hope the simple way of constructing portfolio,  Just each 1 fund from category.

1. Large cap
2. Mid cap
3. Small cap

this should be unified portfolio for all the goals, and the SIP amount will be invested as per Target goal. So you can replace either of this fund during the review, if you find its under performing. Do you find any consequences in this single portfolio approach. Kindly share your views.

Which portal is good for investing Direct plans. I am checking with Invezta and unovest. 

Hi, There are plenty of options now to invest in Direct plans. Some charge nominal subscription fee and may provide various Value added services.

• Invezta.com
• Orowealth.com
• Bharosaclub.com
• Mymoneysage.in
• Unovest.co etc.,

You may also have a look at MF Utility online platform. This is MF industry sponsored one. Read: https://www.relakhs.com/mfutility-invest-direct-plans-mutual-fund-schemes-online/

I have query regarding tracking of each goals, when you invest common set of funds( 4 funds in total) for all long term goals(7 goals). I have total SIP of Rs 55000 for all 7 long term goals, I am investing into 4 funds. How to track each goal in this common 4 funds value.  Can you please explain , how you track and review your portfolio for your goals

Hi, You may set up dummy portfolios with same set of MF Schemes on online platforms like moneycontrol / economic times etc.,

Can you please bit elaborate on setting dummy portfolios. I am not clear on it. I am investing total SIP amount of all the goals in to 4 funds. How to track each goal in that total value. like instance, Son education completed 12% out of 100% of goal value.  

Hi, Kindly visit portfolio link in moneycontrol. Add your funds under one portfolio, and can track them.   

Hi, Thanks for your response,  My query is not about the website used for tracking goals.  In general , how do you track each goal progress, when you invest only 4 funds in common for all 7 long term goals. I am summing up Required SIPs of all 7 goals and invest into 4 funds in single Basket. Now i am confused , how to  track each goal with respective to goal tenure. Hope you also maintaining some 4 funds common for your 3 goals, How do you manage/track each goal.

Hi, You can have different SIP amounts (two different folio ledgers) if the same funds are in two different portfolios and can track them. In my case, except Birla MIP I do not have any other common funds across different goals. In you case : Let's say you have HDFC balanced fund in your Retirement goal portfolio and also in Kid's education goal portfolio. You may create two different SIPs with different ledger folios.  Even if you can make additional lump sum investments in these funds, you can easily track the current value Vs required goal Corpus amount.    

Thanks for your reply . Hope folio ledgers means i have create different folios for same fund.  This is my Goals : 1.Retirement 2, Son UG 3. Son PG 4. Son Marriage 5. Daughter UG 6. Daughter PG 7. Daughter Marriage   Total sum of SIP for all the 7 goals are 59K per month. I am planning to invest in the below Single basket(Portfolio)  :

1. Quantum Long term
2. Franklin prima plus
3. Sundaram Select mid cap
4. PPF long term value

For tracking each goal, you mean that i need to create ledger folios for these 4 funds. Totally 7 x 4 = 28 Ledger folios i have to create . But do you think its too messy. Thats reason i was asking how seamlessly manage and tracking each goal. Hope i am making my query better for your suggestion.

Hi, This is one of the options. Else, you may take help of any Robo advisory platforms, where they can have system enabled tracking tools.   

How to calculate the required amount for Term insurance. It must include current expenses and future goals. Do you have any post on calculation part or ideas to arrive the Sum Assured amount.

Hi, I am planning to publish an article on this, very soon. Meanwhile, you may use the calculator available in the below article ; https://freefincal.com/new-calculator-simple-insurance-calculator-for-the-young-and-salaried/ https://freefincal.com/comprehensive-insurance-calculator/