Though all investments started as SIPs, she stopped investing in these funds after the SIPs ended in 12-36 months. Of the five SIPs, only one SIP of `500 is still running.
Now wants to invest `5,000 every month in some equity funds.
Opted for the dividend option in most of these funds, which means she is periodically withdrawing from the investments meant for long term.
Received a dividend of `46,199 in the past 10 years from an investment of `1.08 lakh. As a result her portfolio is not very big at `1.53 lakh.
Existing mutual funds are good schemes and she should continue holding them. But she should shift from the dividend and dividend reinvestment option to the growth option.
Note from the doctor The new funds will give you a blend of growth and value investments.
Investment of `5,000 a month may not be enough. Try increasing the amount.
Review your portfolio at least twice a year and rebalance if necessary.
I am 45 and want to invest around `20 lakh in mutual funds. Looking at the current situation, would it be advisable to go for equity schemes? I am looking at a time horizon of 3-5 years and expect 10-15% returns. Please suggest schemes and an appropriate strategy for me.
For your time horizon and return expectation, you can go with a 60:40 equity-debt allocation. You can start by investing the entire amount in debt funds. Put `4 lakh in Birla Sun Life Dynamic Bond Fund and another `4 lakh in HDFC Medium Term Opportunities Fund. The remaining `12 lakh can be invested in liquid funds of SBI Mutual Fund and Franklin Templeton Mutual Fund. Then start systematic transfer plans (STPs) into equity funds from these fund houses. Start a monthly STP of `33,000 each into SBI Bluechip and Franklin India Prima Plus. In about 18 months the entire `12 lakh would have got invested in equities. If you have any requirement for money post 3 years, first withdraw from the debt funds. You can towards the end of the 4th year, start moving the equity funds in short-term debt funds through STPs so that you reduce your exposure to equity closer to your last year.
I have started SIPs of `10,000 each in Kotak Select Focus and SBI Bluechip Fund for my children’s education about 7-10 years away. Is this a risky move?
Both Kotak Select Focus and SBI Bluechip are large-cap funds. Since your goals are fairly long-term, these funds, based on their risk-adjusted performance, are good choices. If you increase the investment amount in the coming years, you can go for balanced funds which are less volatile.