Does my DIY mutual fund portfolio need any changes?

If you have any mutual fund queries, message on ET Mutual Funds on Facebook. We will get it answered by our panel of experts.

Getty Images
I am a 40-year-old state government employee. I need a retirement corpus of Rs 1 crore. My time horizon is 15 to 20 years. I have a risk appetite of moderate to high.

I have been investing:
1) Rs 1,000 per month in EPF(GPF) since April 2005 (subject to increase frequently) and
2) Rs 3,000 per month in PPF since January 2018.
3) 5 mutual funds since April 2018 SIP of Rs 1,500 to each fund Direct Growth option: Axis Bluechip Fund, Mirae Asset Large Cap Fund, Mirae Asset Emerging Bluechip Fund, Kotak Standard Multicap Fund, HDFC Small Cap Fund.

I am also investing Rs 5,000 per month in Sukanya Samriddhi Yojana since January 2018 for my daughter's marriage.
Does my DIY Portfolio need any changes or rebalancing?
- Arup Kumar Mondal


We will confine our comments to mutual funds. You have chosen good schemes. However, your allocation is not in line with your profile. You have chosen two large cap schemes, a large & mid cap scheme, multi cap scheme, and small cap scheme. Since your risk profile is moderate to high, you should have a mix of multi cap schemes and mid cap/small cap schemes. The proportion of mid cap would depend on how much extra risk you are ready to take for extra returns. You can invest in a multi cap scheme like Kotak Standard Multicap Scheme and a mid cap scheme.

  • 15.1%Annualized Return for 3 year
  • >3 years Suggested Investment Horizon
  • 3.6 YearsTime taken to double money
  • 13.48%Annualized Return for 3 year
  • >3 years Suggested Investment Horizon
  • 3.8 YearsTime taken to double money
Also read: Best mid cap mutual funds to invest in 2019


You need to invest Rs 19,819 every month to create a corpus of Rs 1 crore in 15 years. We are assuming an annual return of 12 per cent for the calculation. A word of caution: a nice round figure like Rs 1 core will not be enough to take care of your retirement. You should work with real numbers, inflation, and taxes to reach a realistic target corpus.

For more, read: Rs 1 crore or Rs 2 crore? Use real numbers, inflation, taxes for realistic retirement corpus
Rs 1 crore or Rs 2 crore? Use real numbers, inflation, taxes for realistic retirement corpus
1/5

You are creating a retirement corpus to draw a regular income to take care of your living expense after retirement. So, you can take your current annual living expense and inflate it for every year to find out its future value. Once you know this, you can calculate how much corpus do you need to generate the income at a modest rate.

You are creating a retirement corpus to draw a regular income to take care of your living expense after retirement. So, you can take your current annual living expense and inflate it for every year t..
Read More

There is no universal inflation rate for all future goals. For examples, the inflation is very high for education, health care cost, etc. However, most financial planners believe you can use 7-8 per cent to calculate lifestyle inflation.

There is no universal inflation rate for all future goals. For examples, the inflation is very high for education, health care cost, etc. However, most financial planners believe you can use 7-8 per ..
Read More

You should revisit the assumed inflation figures once in three to five years and take needed action in your portfolio. It will help you in achieving your financial goals in time.

You should revisit the assumed inflation figures once in three to five years and take needed action in your portfolio. It will help you in achieving your financial goals in time.

You are going to living another 20-25 years after retirement because of increased life expectancy due to advances in health care. This means you should have large retirement corpus. And what if you outlive your assumed expected life? You should be prepared for that as well.

You are going to living another 20-25 years after retirement because of increased life expectancy due to advances in health care. This means you should have large retirement corpus. And what if you o..
Read More

Long term capital gains on equity mutual funds of over Rs 1 lakh are taxed at 10 per cent. You should also include the taxes in your calculations as you need to pay taxes every time you sell your investments, be it equity or debt mutual funds.

Long term capital gains on equity mutual funds of over Rs 1 lakh are taxed at 10 per cent. You should also include the taxes in your calculations as you need to pay taxes every time you sell your inv..
Read More

Download
The Economic Times Business News App
for the Latest News in Business, Sensex, Stock Market Updates & More.
Download
The Economic Times News App
for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
READ MORE
ADVERTISEMENT

Top Mutual Funds

3 M(%)
6 M(%)
1 YR(%)
3 YRS(%)

READ MORE:

LOGIN & CLAIM

50 TIMESPOINTS

Save with Tax planning SIP's

More from our Partners

Loading next story
Text Size:AAA
Success
This article has been saved

*

+