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Sanjeev

Sanjeev Govila

Financial Planner 

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Colonel Sanjeev Govila (retd) is the founder of Hum Fauji Initiatives, a financial planning company dedicated to the armed forces personnel and their families.
He has over 12 years of experience in financial planning and is a SEBI certified registered investment advisor; he is also accredited with AMFI and IRDA.... more

Answered on Mar 28, 2024

Asked by Anonymous - Mar 13, 2024Hindi
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Hello Sir, I plan to invest in the following funds for 2 years through SIP from April 24. Investment holding time frame is 15 years. Nipon India Small Cap (10K); HDFC Small Cap (10K); HDFC Mid Cap Opportunities Fund (7.5K); Motilal Oswal Nifty Mid Cap 150 Index Fund (7.5K); Mirae Assets Large & Mid Cap (5K); ICICI Pru Value Discovery (10K). All funds selected are of Growth option and Direct investment option. Requesting your expert comments in the fund selection/ amount allocation. Looking forward to your response. Thanks.
Ans: In the mentioned funds, most of them are of Small & Mid cap categories and they carry higher risk in comparison to most other categories.
Although, in the recent past these funds have delivered decent returns supported by the ongoing market rally, you should be ready for the uncertain volatilities and may witness negative returns in the short term.

Secondly, funds overlapping in a similar category increases the concentration risk of the portfolio and returns may be impacted during market stress. Hence, it is recommended to diversify the portfolio among categories & across the market capitalization.

The investment horizon in mid & small cap should be of 7+ years for decent returns.

As you have mentioned your investment horizon as 15 years, these funds could be the suitable investment but in the absence of any idea of your risk appetite, it is difficult to assess that. Therefore, selection of funds should be based on your risk appetite, investment horizon and your goals not on the basis of their performance.
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Answered on Mar 28, 2024

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Dear sir, I am having MF portfolio around 12.5 lakhs invested through SIP and lumpsum both ways. MF holdings are:- Mirae large & mid cap-3.2 lakh Mirae mid cap-3.4 lakh Parag parikh flexi-3.0 lakh Parag parikh elss-75 k Kotak emerging equity -1.0 lkh Nippon small-65 k Motilal midcap- 4k (just started) Tat small cap 3k (SIP recently started) I recently switched from axis mid cap to kotak Emerging. I am confused about mid cap funds which one should I keep whether motilal or kotak emerging. Kindly suggest Whether my portfolio is well diversified or any changes required. I want to exit one mid cap or keep all 3 in portfolio considering overlap.
Ans: Your portfolio is well diversified across various categories and designed for long-term horizon.

Currently, you have three mid-cap funds in your portfolio i.e. Mirae Asset Mid Cap Fund, Kotak Emerging Equity Fund, and Motilal Oswal Mid Cap Fund.

Motilal Oswal Mid Cap Fund is currently investing only in 30 stocks which makes it focused in nature. The market surge has helped the fund achieve strong returns over the last year, but these returns have not been steady and have not had a particularly strong track record. Thus, we advise you to discontinue making investments in this fund.

You have investments in two Mirae AMC funds in your portfolio. We advise you to diversify your investments among different AMCs to lower the risk of concentration and to take advantage of the various investing strategies that AMCs follow.

We suggest you to continue to invest in Kotak Emerging Equity Fund since the fund has a good track record, past performance and it is well diversified as compared to its peers.
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Answered on Feb 10, 2024

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Hi, I am investing 3.5 lacs every month in small and mid cap SIP for the last 2 years. My son will be going to study abroad. Should I fund his education from the MF or should I take a student loan and not touch the MF?
Ans: Deciding between using your mutual fund investments or a student loan for your son's abroad education requires more details like estimated education cost, living expenses, travel expenses, etc.

By considering your inputs, here are some pros and cons:-

Using portfolio for education:-

Pros:- As you have been investing in a mutual fund for the last 2 years, assume that your portfolio is generating potentially higher returns compared to loan interest rates, and in the long-term horizon (5-7 years) your portfolio becomes stabilized and the compounding helps to creates a good corpus for your future goals.

Cons:- If you withdraw the portfolio now, it will affect the compounding and the generated capital gain is taxable & it may also incur the exit load. In the short-term horizon, fluctuating markets might impact the value of the portfolio, potentially falling short of education costs.

Take Education Loan:-

Pros:- Lower interest rates are set off with the portfolio returns and it also provides suitable repayment options. It offers benefits like tax deductions.

Cons:- Add the financial burden on you, if you repay the loan and if your son repays the loan it becomes a debt for him after the completion of education but it also creates a sense of responsibility for your son and he experiences how to manage the finances.

We have explained you to the pros and cons of taking an education loan or using a portfolio for the same. To decide the same please calculate the estimated cost of education and also consider the portfolio return and education loan interest rate.
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Answered on Feb 06, 2024

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Answered on Feb 06, 2024

Asked by Anonymous - Sep 22, 2023Hindi
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Hi sir, I am 32 year old earning 42 LPA. I have 20 lakhs invested in stocks, 17 lakhs in mutual funds, 13 lakhs in PF, 3 lakhs in PPF, 2 lakhs in govt. bonds and 12 lakhs in FD. I want to retire by 45 with monthly pension of 2 lakhs post tax growing 7% annually. What should be my corpus amount and how should I invest per month in above instruments to reach it.
Ans: To achieve your retirement goal of a monthly pension of Rs 2 lakhs post-tax, growing at 7% annually, you'll need to calculate the required corpus. For this, I’m unable to let you know your exact corpus amount since I have no information about your current expenses, risk tolerance, life expectancy and other financial goals.

With assumptions like an 85-year life expectancy and an aggressive risk profile, you might need around Rs 7.75 crore at retirement (age 45). This considers a 7% inflation rate and 13% pre-retirement returns.

Right now, you have Rs 67 lakhs saved, split between equity and debt. However, solely relying on these might only sustain your desired lifestyle till age 60 only. To make sure you have enough until 85, you need to invest an additional monthly investment (SIP) of around Rs 1 Lakh along with your existing investments of Rs. 67 Lakhs. Also, slowly build up an emergency fund equal to 6 months of your expenses.

The response to your query is based on limited information and consulting a financial advisor is highly recommended. He/she can create a personalized plan considering your expenses, risk tolerance, and other goals. There are some free financial calculators (for retirement planning) available on google, you can also refer to the same for the calculation.
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Answered on Feb 06, 2024

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Answered on Feb 06, 2024

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Hello Sir,My name is Girish aged 38 years and I have been going through your suggestions on the MF.I have started SIP in the following mutual funds.1. ICICI Prudential Bluechip Fund (G) - investing since a month - 5,000 per month 2. SBI Blue Chip Fund (G) - investing since a month - 5,000 per month 3. HDFC Balanced Advantage Fund - Direct Plan (IDCW) - investing since 14 months - 2,000 per month4. Nippon India Large Cap Fund - Regular Plan (G) - investing since 2 months - 2,000 per month 5. Parag Parikh Flexi Cap Fund - Direct Plan (G) - investing since 2 years - 2,000 per month 6. UTI MNC Fund - Direct Plan (G) - investing since 14 months - 2,000 per month I would like to know if my portfolio is good. I will be planning to invest for the next 10-15 years. What would be the corpus at the end of 15 years?Do you foresee any changes to be made in my portfolio? Please suggest.
Ans: It's great that you're investing your monthly surplus in SIPs to build your wealth.

You have a well-diversified portfolio and the funds in your portfolio are performing well in the current market scenario. In the finance planning of any portfolio, we consider many factors, including client age, risk profile, current asset allocation, etc.

All mentioned funds are performing good and have good potential in long-term. However, UTI MNC Fund - Sectoral funds focus on a specific sector or industry and it is difficult to predict which sector will perform and how long. Hence, we recommend to go for diversified funds to avoid the concentration risk
.
If you continue the monthly investment of Rs 18,000 for the next 15 years the accumulated corpus will be 89.92 lakhs approx. at the average growth rate of 12% for 15 years.
Note - the amount may get differ at that time as the actual return can be vary.
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Answered on Feb 06, 2024

Asked by Anonymous - Oct 30, 2023Hindi
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Hello sir, My age is fiifty and jave invested a capital of 39 lacs in mutual funds , 28 lacs in post office instruments. will be retiring at an age of 55 to 58. years. Can you suggest me the approximate capital value that i amy accumulate thro ugh my invested amount after 10 years to ahve an monthly income of 1 lacs or so. Invested amount: SBI Blue chip SBI Equity and Hybrid fund SBI Flexi cap fund SBI Contra fund Kotak emerging equity fund HDFC Fexicap fund HDFC MID Cap opportunities fund ICICI Banking and financial services fund HSBC infra structure DSP Mutual fund
Ans: As per your query, you require Rs 1 lakh per month (today’s cost) after retirement. Considering inflation to maintain same purchasing power you would be requiring around Rs 1.58 lakh per month approximately. Thus assuming you will be retiring at 58 and life expectancy till age 75, you require bulk investment of 1.38cr as on date assuming inflation 6% and expected return of 10%.

The amount invested as on date for MF and Post office scheme is around 67 lakhs approx., if the same grows at an average of 8% it will be 1.24Cr (but same can vary based on nature of investment in post office scheme) thus you are deficit in current time for the aforesaid goal, same can be fulfilled by SIP of Rs 90 K for next 8 years, otherwise you will fall short of money for later years of monthly income required.

The suggestion on investment avenues and choice of product also depends on further aspects such as risk appetite, asset allocation and cashflows etc. Prima facie your portfolio seems concentrated in similar fund houses that further not suitable for maintaining well diversification reducing overall risk.
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