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Q: 28-year-old Raunak Surana writes to us from Rajasthan. I started investing in mutual funds since January 2018. I am currently investing Rs 20,000 per month as SIP in mutual funds linked with my goals. Please suggest me about my portfolio, are these funds good, do they need any change either in specific fund or amount of SIP pertaining to my goals.
My portfolio is-
1. For child's education - Rs 1 crore in 20 years
Funds are - a. ICICI Bluechip: Rs 5,000 per month. b. ABSL Focussed Equity: Rs 2,500 per month c. ABSL Tax RLF 96: Rs 2,500 per month
2. For child's marriage - Rs 1 crore in 27 years
Funds are - a. HDFC Midcap Opp: Rs 2,500 per month. b. PPFAS Long Term Equity: Rs 1,500 per month.
3. For my retirement - Rs 4 crore in 32 years
Funds are - a. Mirae EMG Bluechip: Rs 2,500 per month. b. Axis Multicap: Rs 2,500 per month. c. Tata Consumer: Rs 1,000 per month
All funds are growth option and direct plan. I have a term plan of Rs 1.5 crore from Max Life and health insurance from Max Bupa (Floater).
A: Good to see that SIP planning is done on goal based and proper ear marking is done on the fund for specific goals. If the amount you invest in goals generate 14 percent CAGR (compound annual growth rate) for the period, then you meet all the goals for the amount. If it generates 12 percent CAGR, then we fall short of third goal that is retirement.
Funds selections are majorly good choice. Look to stop Parag Parekh Long Term Equity and start SIP in Tata Equity P/E, which is a good multicap fund. Should stop SIP in Tata India Consumer as it’s a sectorial fund and if you don't understand this sector, you may not come to know when to exit from the scheme.
Look to add good small cap funds like Reliance Small Cap or L&T Emerging Businesses as there is not a single small cap fund in the portfolio. You should look to increase you term cover as the goals mentioned is very low at least to take of all your liability and monthly expenses of your dependent family for the next 30 years.
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