Portfolio review (long term savings)

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Hima Bindu asked 7 years ago

Hi Sreekanth, I have a investment potential of 50000 per month and would like to invest in MFs for long term.

Could you give your thoughts for the below portfolio?

Index Fund UTI Nifty Index Fund Large Cap HDFC Top 100 Equity Fund Multi Cap UTI Equity Fund Multi Cap Adity Birla Sun Life Equity Fund Balanced Advantage ICICI Pru Balanced Advantage Fund Mid Cap DSP Mid Cap Fund Mid Cap Franklin India Prima Fund Debt Franklin India ST Income Plan Debt ICICI Pru Credit Risk Fund Short Term Goals Franklin India Ultra Short Bond 2. Apart from this could you also suggest a liquid fund to save emergency fund on adhoc basis?

14 Answers

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Sreekanth Staff answered 7 years ago

Hi, May I know if you already hold any investments in MF Schemes? Or is this the first time that you are planning to pick MFs? What is the criteria based on which you have shortlisted these funds?? You may consider HDFC Liquid Fund / ICICI Prudential Liquid Plan... Related articles :

Hima Bindu replied 7 years ago

Hi Sreekanth,

I have lumpsums invested in ICIC Pru Long Term (30K), ICICI Pru Balanced (35K), HDFC Balanced Fund (35k).

The above portfolio is to cater to long term goals like children education, marriage and retirement corpus put together. I would like to divide the 50000 per month in the above portfolio via SIPs in MFU.

These funds were suggested by our adviser.

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Sreekanth Staff answered 7 years ago

Hi, Index fund (UTI) can be included. You may avoid investing in HDFC Top 100 & UTI Equity fund. Birla Equity fund can be included. You already have couple of balanced funds hence can avoid ICICI Bal adv fund. Can make additional investments in HDFC balanced fund instead. Can pick Franklin Prima fund and avoid DSP mid cap. Suggested Three debt funds, you may avoid and can ask for a Dynamic Debt Fund. Do you invest/save in EPF/PPF??

Hima Bindu replied 7 years ago

Thank you Sreekanth for the prompt response,

Yes. Have just started to invest in PPF. Currently, 5000 p.m but would increase it to 10K p.m next yr.

1. The purpose of “Franklin India Ultra Short Bond” is to fund the recurring School fees, which in our case is quite high. Do you suggest any other fund for the same? (We intend to start investing in this fund from March’19 but will start using it only in 2020.)

2. Could you explain how Dynamic Debt Fund is better than the Debt Funds?
Also, could you suggest a Fund based on the portfolio changes you suggested, please?

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Sreekanth Staff answered 7 years ago

Hi, Since you mentioned that all the listed funds (including debt funds) are for long term, hence suggested Dynamic debt fund. If the purpose of Ultra Short term debt fund is to meet short term commitments, you may kindly go ahead with Franklin UST bond fund. But, kindly be aware that debt funds are also risky compared to relatively safer Bank FDs/RDs.

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Hima Bindu answered 7 years ago

Thank you Sreekanth for the prompt response. I have made changes to my financial plan overall based on your suggestions. Keep let me know your thoughts. Short Term - School Fees - Bank RD
Emergency Fund - RD for now. Shift to RD and FD later

Long Term
PPF 5000each (me and my husband)

Long Term in MFs (Kindly let me know if the % division is ok)
UTI Nifty Index Fund 10%
Adity Birla Sun Life Equity Fund 40%
HDFC balanced fund 15%
Franklin India Prima Fund 35%

Adhoc for any unexpected lumpsum
ICICI Pru Liquid Fund (Can be used as Emergency Fund if needed)

2. For kids inheritance, is it good to open PPF minor account or open a Sukanya Samridhi account? (I have 2 kids, 8 & 6). I am inclining towards PPF as the same account can be used by them later too. Please tell me if I'm missing something here and if there is a better option. P.S. I dont have any fixed amount in mind here, this would be over and above what we are investing with goals in mind.

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Sreekanth Staff answered 7 years ago

Hi, PPF / SSA, both are decent long term saving schemes. Do note that, interest rate on Sukanya Samriddhi deposits can be slightly higher than PPF's. In terms of Liquidity/withdrawal rules, PPF scores more points. Tax benefits are same. So, may be, you can open both PPF & SSA. SSA for the younger kid??

Hima Bindu replied 7 years ago

Thank you, as always, very prompt 🙂

Kindly let me know your thoughts in this too.

Short Term – School Fees – Bank RD
Emergency Fund – RD for now. Shift to RD and FD later

Long Term
PPF 5000each (me and my husband)

Long Term in MFs (Kindly let me know if the % division is ok)
UTI Nifty Index Fund 10%
Adity Birla Sun Life Equity Fund 40%
HDFC balanced fund 15%
Franklin India Prima Fund 35%

Adhoc for any unexpected lumpsum
ICICI Pru Liquid Fund (Can be used as Emergency Fund if needed)

Sreekanth Staff replied 7 years ago

May I know the expected investment horizon for these investments??

Hima Bindu replied 7 years ago

15 years and above

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Hima Bindu answered 7 years ago

As always, very prompt. Thank you. :) Kindly let me know your thoughts on the below portfolio too. Short Term – School Fees – Bank RD
Emergency Fund – RD for now. Shift to RD and FD later Long Term
PPF 5000each (me and my husband) Long Term in MFs (Kindly let me know if the % division is ok)
UTI Nifty Index Fund 10%
Adity Birla Sun Life Equity Fund 40%
HDFC balanced fund 15%
Franklin India Prima Fund 35% Adhoc for any unexpected lumpsum
ICICI Pru Liquid Fund (Can be used as Emergency Fund if needed)

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Sreekanth Staff answered 7 years ago

May I know the expected investment horizon for these investments??

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Sreekanth Staff answered 7 years ago

Hi, Birla Equity Fund though a multi-cap fund, has currently own more than 60% of its corpus in Large cap Stocks. UTI Nifty fund is also a large cap based fund. The portfolio overlap between these two currently is more than 40%. But, do note that the portfolios do change over a period of time. So, you may allocate slightly higher % to Balanced fund and lesser % to Birla Equity fund to start with.

Hima Bindu replied 7 years ago

ok..so may be this is better?

Long Term in MFs
UTI Nifty Index Fund 10%
Adity Birla Sun Life Equity Fund 20%
HDFC balanced fund 30%
Franklin India Prima Fund 40%

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Sreekanth Staff answered 7 years ago

Fine, you may go ahead with your investment plan. Keep reviewing your portfolio periodically, say once in a FY. Do not churn your portfolio frequently. Accept short term volatility or negative performances... Related articles :

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Sreekanth Staff answered 7 years ago

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Hima Bindu answered 7 years ago

Thanks a bunch!

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Hima Bindu answered 7 years ago

Hi Sreekanth, Ive been trying to post another question but there seems to be a glitch. Q: Is there any indicative list insurances salaried people get in general? I know its a confusing question. Let me explain the context.:) I was going through some of your posts and came across EPF account related post in which you mentioned that we get a 3L insurance on EPF account. This was completely news to me. Likewise - there could be other services which provide insurance as a by product and most of us are not aware of it. Is it possible to list down such services, though only a indicative list? We could use it as a check list and make a note of it. :) Thanks in advance.

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Sreekanth Staff answered 7 years ago

Hi, Yeah, its an EDLI scheme of EPFO. The assurance benefit to an eligible employee will now stand at a minimum of Rs 2.5 lakh and will be capped at Rs 6 lakh. An employee can check out with his/her Employer if there is any group term insurance cover. Some Corporate Salary accounts (banks) offer Personal Accident covers which many employees are not aware of.

Hima Bindu replied 7 years ago

ok, thank you.

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Sreekanth Staff answered 7 years ago

May I know if you got any error while posting a new Question??

Hima Bindu replied 7 years ago

Yes, When I’m clicking on “ask your question” link, it says the page in not available.

Sreekanth Staff replied 7 years ago

Ok..will check on this error. Thank you for letting me know this..