I’m 44 years old and my aim is to accumulate ₹15 lakh over the next 10 years. In November 2020, I invested about ₹70,000 in shares. In the same month, I also started SIPs (systematic investment plans) in the following funds: ₹3,000 in Edelweiss Balanced Advantage Fund – Dynamic Asset Allocation; ₹1,000 in Motilal Oswal Focused 25; and a lump sum investment of ₹10,000 in Edelweiss US Technology Fund of Fund. I can spare another ₹3,000 for SIPs. Please advise on how to achieve my goal.
—Name withheld on request
If you invest ₹7,000 a month for the next 10 years, your investment value at the end of the tenure, assuming 10% annual returns, would be close to ₹14 lakh. If you add on the returns you get, hopefully, from your lump sum investment and your stock call, there is a fair chance that you will reach your goal in this period.
However, you need to increase your SIP from the current ₹4,000 to ₹6,000 (or better yet ₹7,000 as you are capable of) in order to do so.
You are investing in a balanced advantage fund and a focused fund (diversified). Given your time frame and expectations, you can allocate the additional money into equity funds. A diversified fund in the form of Parag Parikh Flexi Cap and a midcap in the form of DSP Midcap would be good additions.
I have been making SIPs in the following funds for the past one-and-a-half years. Some are for ₹5,000 and others for ₹6,000. 1. IDFC Govt Securities Fund – Investment – Growth; 2. Nippon India Nivesh Lakshya – Regular – Growth; 3. UTI Flexicap – Growth; 4. SBI Focused Fund – Regular – Growth; 5. Axis Bluechip – Growth; 6. ICICI Prudential Bluechip – Growth; 7. Axis Midcap – Growth; 8. Kotak Emerging Fund – Growth; 9. DSP Healthcare – Regular – Growth; 10. Tata Digital India – Regular – Growth; 11. Mirae Asset Tax Saver – Regular – Growth; 12. Principal Hybrid – Regular – Growth; 13. Franklin India Feeder US Opportunity Fund – Growth; 14. HSBC Brazil Fund – Growth.
—Name withheld on request
I presume your question is to comment on your portfolio holdings. To do so, I will go ahead and assume that this is a long-term portfolio (to be invested for at least five years).
Firstly, there are too many funds in this portfolio even if you are investing close to ₹75,000 a month in them. So, my first recommendation would be to consolidate your holdings into fewer schemes.
You can remove the many esoteric funds from your portfolio—the Brazil fund, the healthcare fund, the digital fund; all these do not belong in a general-purpose long-term portfolio. You can consolidate the amount going to these funds among other holdings.
Among the others, you can reduce the large-cap funds (Axis and ICICI) into just one, and better yet make it an index fund. The solitary debt fund in your portfolio is a government bond fund, which means that you need to be prepared for some volatility during your investment tenure.
As such, overall, this is a high-risk portfolio and you will do well to derisk it.
Srikanth Meenakshi is foun-ding partner, Primeinvestor.