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Mutual Fund Corner. Q: 48-year-old AP Singh writes us from Pune. I have a SIP in the following mutual funds: a) Rs 1,000 per month in Motilal Oswal Focused 25 Fund-Growth (Focused) b) Rs 2,000 per month in ICICI Prudential Bluechip Fund-Growth (Large Cap) c) Rs 1,000 per month in Invesco India Large Cap Fund-Growth (Large Cap) d) Rs 2,000 per month in Reliance Large Cap Fund-Growth Plan Growth Option (Large Cap) e) Rs 1,000 per month in SBI Bluechip FFund-RegularPlan-Growth (Large Cap) f) Rs 2,000 per month in Mirae Asset Emerging Bluechip Fund-Direct Plan Growth (Large and Mid) g) Rs 3,000 per month in Aditya Birla Sunlife Tax Relief 96 (G) h) Rs 10,000 per month in Axis Long Term Equity Fund (G) j) Rs 1,000 per month in UTI CCP Advantage Fund (Multi-Cap) While serial 1 a) to f) are meant to be a saving with adequate returns to beat the rate of inflation, g) and h) are in my wife's name for saving tax (She gets Rs 16,500/- per month against house rent) and j) for my nine-year-old son's higher education, as and when it becomes due (I also have two daughters aged 22 and 18 years in graduation final year and class XII respectively) . While serial j) commenced from 2009, the other SIPs have started since the last one year. I am a central government employee, due to retire in another 6-9 years depending on my promotions. I am also depositing Rs 20,000 per month in my Provident Fund (PF). I am also paying an EMI of Rs 11,100/month for a personal loan taken from State Bank of India (to be paid over the next five years). I already have a 3 BHK flat on rent since 2009, where I plan to settle down post-retirement.
A: 1. In your beat inflation bucket, you have four large-cap funds and one large and mid-cap fund. Funds in the same sub-category have a lot of. Individually all are good funds, but they are not adding anything to your portfolio together. We would advise have only one large cap fund and do look into large-cap index funds which have very low expense ratios.
I would like to know whether my SIPs are in consonance with my stated objectives. Please guide me. 2. For son’s education, you are investing Rs 1,000 per month since 2009. If we assume you will be investing for eight more years (when your son turns 17) a reasonable expectation would be a corpus of Rs 5 – 6 lakh. If you think this is enough then good, else start allocating more to this goal. 3. You have a personal loan of Rs 11,000 per month, you may want to pre-pay your loan and invest less for a few years and then start investing more. 4. Tax saving is fine.
5. You have PF and tax-saving funds which will contribute to retirement and the post-retirement house is taken care of so that’s good.
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