I am 37 years old NRI. I have made investment in MF, which is approx 35 Lacks through SIP from the year 2017 and currently my portfolio is around 1 CR. I have done all investment through NRO account. I would like to keep continuing my SIP for the next 5 years. My portfolio is diversified. My Question here is how much corpus I can expect & How much tax I have to pay if withdrawing after 5 years. any advise?

Ans: Rs 60,000 monthly investment can get you to achieve the goal.

Above funds are fine, however sectoral exposure should be avoided to the extent possible.

Ans: Assessing Your Mutual Fund Portfolio for Optimal Growth

Current Portfolio Overview:

Your current mutual fund portfolio comprises several funds across different categories, including Mirae Asset emerging blue chip fund, Aditya Birla Sunlife 96 tax relief, Axis long term Equity fund, Canara Robeco Equity tax saver fund, and Sundaram Diversified equity.

Evaluation of Current Investments:

Your portfolio demonstrates a diversified approach, spanning both large-cap and tax-saving funds.

Assessment of Fund Performance:

Mirae Asset Emerging Blue Chip Fund: This fund has shown consistent performance historically and may continue to deliver good returns over the long term.

Aditya Birla Sunlife 96 Tax Relief: As a tax-saving fund, it offers the dual benefit of tax savings under Section 80C and potential capital appreciation.

Axis Long Term Equity Fund: This ELSS fund has a track record of delivering robust returns and can be considered for long-term wealth creation.

Canara Robeco Equity Tax Saver Fund: Similar to other ELSS funds, it offers tax benefits along with the potential for capital appreciation.

Sundaram Diversified Equity Fund: This fund focuses on diversified equity investments and aims to generate wealth over the long term.

Recommendations:

Review Fund Performance: Evaluate the performance of each fund against its benchmark and peers to ensure it aligns with your investment objectives.

Consider Market Conditions: Assess the current market conditions and economic outlook to gauge the potential performance of your funds in the future.

Consult a Certified Financial Planner: Seek guidance from a Certified Financial Planner (CFP) to review your investment strategy and make informed decisions based on your financial goals, risk tolerance, and investment horizon.

Consolidate and Rebalance: Consider consolidating your mutual fund holdings to streamline your portfolio and reduce overlap. Rebalance your portfolio periodically to maintain an optimal asset allocation mix.

Stay Invested for the Long Term: Avoid making impulsive decisions based on short-term market fluctuations. Stay invested for the long term to benefit from the power of compounding and potential wealth creation.

Final Thoughts:

In conclusion, maintaining a well-diversified mutual fund portfolio is essential for long-term wealth creation. Regularly monitor your investments, review fund performance, and seek professional advice to make informed decisions aligned with your financial goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: Your portfolio reflects a diversified mix of funds across various categories, including large-cap, mid-cap, small-cap, flexi-cap, and sectoral funds. However, having such a wide array of funds may lead to overlap and redundancy in your portfolio.

Here are some suggestions:

Consolidation: Consider consolidating your portfolio by reducing the number of funds. Focus on quality rather than quantity. You can achieve diversification with fewer funds that cover different market segments effectively.
Review Technology Sector Allocation: The allocation to the technology sector through ICICI Pru. Technology Direct Plan seems relatively high compared to other sectors. Ensure that you are comfortable with the risk associated with sector-specific funds and that it aligns with your overall investment strategy.
Assess Performance: Evaluate the performance of each fund regularly to ensure they are meeting your expectations. Monitor factors like fund manager consistency, expense ratios, and portfolio composition.
Long-Term Goals: Assess whether the selected funds align with your long-term financial goals and risk tolerance. Make adjustments if needed to stay on track with your objectives.
As for estimating the corpus after 20 years, it depends on various factors such as the rate of return, investment amount, and market conditions. Since predicting future market performance is uncertain, it's challenging to provide an accurate projection. However, you can use online SIP calculators to get a rough estimate based on assumed rates of return.

Lastly, consider consulting with a financial advisor or planner who can provide personalized advice based on your financial situation, goals, and risk tolerance. They can help optimize your portfolio for better performance and alignment with your objectives.

Ans: With a monthly expense goal of 50k and current corpus of 40 lakhs, you'd ideally want a corpus that can generate this income sustainably. To generate 50k monthly, assuming a 5% annual withdrawal rate, you'd need approximately 1.2 Crores. Given your SIP of 85k per month and current corpus, you'd need to continue investing for about 10-12 years to achieve this target, considering an average annual return of around 10%. Continuing your SIP and possibly increasing contributions as your income allows can expedite reaching your goal. Given your ability to work longer, extending your SIP horizon can also provide a buffer for unexpected expenses. It's always advisable to review with a financial advisor to tailor your plan.

Ans: Here's how you can plan for your retirement, considering your current situation:

Reaching 1 Crore Corpus:

Additional SIP: To reach 1 crore in 5 years, assuming a 12% annual return (aggressive assumption, actual returns may vary), you'd need to invest an additional Rs.33,000 per month (using a SIP calculator). This adds to your existing SIP amount.
Investment Strategy:

Continue Existing SIP: It's good to continue your existing SIP as it forms your investment base.
Diversify for Growth: Consider a diversified aggressive portfolio for the additional SIP to potentially maximize growth within a 5-year timeframe. This could include:
Large-Cap Funds: Invest a portion in large-cap funds for stability and growth.
Multi-Cap Funds: Invest a portion in multi-cap funds for broader market exposure and growth potential.
Mid-Cap Funds (Optional): A small portion in mid-cap funds can add growth potential, but also carries higher risk.
Consultation is Key: These are general suggestions. Consulting a Certified Financial Planner (CFP) is highly recommended. They can consider your risk tolerance, existing MF portfolio, and desired retirement corpus to create a personalized investment plan.

Remember:

Market Volatility: The stock market is volatile. There's no guarantee of 12% returns, and you might face fluctuations.
Review Portfolio: Regularly review your portfolio with your CFP to ensure it aligns with your evolving goals and risk tolerance.
Alternative Scenario:

If a more aggressive investment approach concerns you, consider working a few extra years to reach your desired corpus. This reduces the monthly SIP amount required.

Reaching your retirement goals is achievable! Plan wisely, diversify, and seek professional guidance for a secure future.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in