Ask our experts – June 2024

I have been investing Rs. 30,000 per month in 13 funds : 1. Axis Small Cap Fund-D-G, 2. Quant Small Cap Fund-D-G, 3. ICICI Pru Equity & Debt Fund-D-G, 4. Motilal Oswal Midcap Fund-D-G, 5. Parag Parikh Flexi Cap Fund-D-G, 6. ICICI Pru  Bluechip Fund-D-G, 7. Quant Large & Midcap Fund-D G, 8. HDFC Index S&P BSE Sensex direct plan-d-g, 9. SBI Contra-D-G, 10. Nippon India Small Cap Fund D-G, 11. Quant ELSS Tax Saver Fund-D-G, 12. Quant Midcap Fund-D G, 13. Quant Quantamental Fund Growth.
Now I am planning to add Rs.10,000 more for the monthly SIP. Please analyse my mutual fund portfolio and give suggestions.

You can top up the existing performing funds according to your investment horizon and risk appetite. You may reduce the total number of funds in the portfolio for better management and easy monitoring. 

Please find below the rating of the schemes as per our analysis. A 5 star means best in the category and 1 star is least preferred scheme in a portfolio. The funds which are currently in a 3-star rating are mainly due to the  scheme’s recent underperformance in comparison to its peers. You may keep these funds for the time being while continuing to monitor their performance for another 6 months to see whether any additional action is necessary. Certain specific thematic/ Recent NFOs which are not under our research purview are mentioned as Not rated. 

I am a 40-year-old and want to create a pension fund. Can you suggest a mutual fund to invest for long term.  

Preparing for retirement and creating a corpus for the future is important. We would have been able to provide you with a more tailored plan if you had shared your risk profile, amount required every month for expenses and investment expectations.  

Assuming you are searching for equity-based mutual funds and would like to invest systematically over the long term, the two recommended categories are Multicap and Flexicap. We suggest you get help from an investment advisor to assess your risk tolerance in detail and determine if small- and mid-cap funds should be included in your portfolio, as they tend to perform well in the long-term but have higher risk. 

I’m a 49-year-old NRI, retiring next year. I plan to invest Rs. 40 lakh after I retire.  My goal is to earn Rs. 1 lakh per month, after ten years. How can I invest this amount. Please give me some suggestions. 

 
We require some more information like your risk profile, preferred asset class for investing Rs.40 lakhs, etc to help suggest better investment options. 

Let’s look at this in 2 parts. One is the growth period for Rs. 40 lakhs (10 years) and the next is periodic withdrawal from the corpus built post 10 years. 

10 years is a reasonably good time period for long-term investing in asset classes such as equities. If your risk appetite permits, you shall consider that. 

Coming to the withdrawal requirement of Rs.1 lakh per month, a lot would depend on the rate at which your capital is growing and what would be the general interest rates prevailing at that time. 

We would always suggest considering withdrawals from fixed income or debt-oriented asset class. 

Assuming your capital of Rs. 40 lakhs grows at 14%, you have a possibility of building a corpus of Rs.1.48 crore. You can move that to a fixed income fund and assuming the yields / interest rates stays around 7% even after 10 years, then you could plan and set up a withdrawal to the tune of Rs. 86,500. That is a broader equation. In simple words, the rate of withdrawal and the rate at which your corpus is growing will have an impact on the fund balance.