Sir I am 78 years old. I have no liabilities. I have a house worth two corores. I am living with my daughter and son in law. They're extremely well off. Since I am living with my daughter I have no expenses. This is my background. My...

Sir I am 78 years old. I have no liabilities. I have a house worth two corores. I am living with my daughter and son in law. They're extremely well off. Since I am living with my daughter I have no expenses. This is my background. My assets are as follows. 1) PPF RS.20lakhs. 2)PMYY SCHEME. 15Lakhs. 3) Fixed deposit 15 lakhs 4) Health insurance both 5lakhs each 5 ) Immovable property worth 5lakhs 6) Gold bond maturity value 1lakh 7) Physical gold and silver 20 lakhs 8) Shares worth 100000 rs.asof today 9) Mutual fund worth rs.18 lakhs as of today. Below l am giving details of the funds most of them purchased on issue price all regular growth. 1) Aditya Birla Sun Life focused equity fund Units 1200 2) DSP world gold fund growth regular Units 500 3) Franklin India flexi cap fund growth regular. Units 35 4) HDFC banking and financial services fund growth regular. Units 1160 5) HDFC defence fund growth regular Uni1000 6) HDFC mid cap fund growth regular Units 260 7) HDFC flexi cap fund growth regular Units 25 8) Hsbc value fund growth regular Units 430 9)Hsbc elss fund growth regular Units 490 10) Icici prudential Pharma and health care fund growth regular Units 780 11) Icici prudential India opportunities fund growth regular. Units 2200 12) Icici prudential manufacturing fund growth regular Units 3000 13) Icici prudential flexicap fund growth regular. Units5000 14) Icici prudential housing opportunities fund growth regular Units 2500 15) Icici prudential balanced advantage fund growth regular. Units. 550 16) Icici prudential psu equity fund growth regular. Units Units 2700 17) Kotak global innovation fund growth regular. Units 1200 18) Kotak international REIT fund growth regular. Units 500 19 ) Nippon india low duration fund growth regular. Units 10 20) Sbi blue chip fund growth regular Units 1000 21) Sbi infrastructure fund growth regular Units 500 22) Sundaram focused equity fund growth regular. Units 1300 23) Tata mid cap fund growth regular plan growth. Units 335 units 24)iUti nifty 500 fifty index fund growth regular. Units 18050 25)Uti flexi cap fund growth regular Units 1020 26)Uti small cap fund growth regular Units 5000 27) Uti master share units regular plan Units 210 28) Uti mid cap fund growth regular Units 700 29) Hdfc transportation fund growth regular Units 2500 Opinion required 1) I want to exit Kotak global innovation fund and Kotak international REIT fund and Dsp world gold fund. 2) I want to start 4 SIP of2500 rs. per month. a) Sbi blue chip fund b) Uti flexicap fund c) Multi asset fund of Hdfc or lclcl or Aditya Birla Sun Life d) not sure which fund Request you to suggest how to make best review of my investment. I would prefer to invest indirect growth instead of regular growth. Would it be convenient if invest inSWP or overnight fund or floater fund and give standing instruction to to invest in SIP? How to track my investments on daily basis ? Waiting eagerly for your reply. Your's sincerely PS: All nomination in the name of my wife. She is equally well invested in Bank FD PMVYYOJANA AND PPF and MF (very small amount of 5lakhs as today.

Ans: It seems you have a diversified investment portfolio, which is commendable. Here are some suggestions based on your requirements:

Exit Strategies:

Exiting funds that no longer align with your investment goals or if you wish to reduce exposure to certain sectors is a prudent move.
New SIP Allocation:

Starting SIPs in well-established funds across different categories such as large-cap, flexicap, and multi-asset funds can offer diversification and potential growth.
SWP or Systematic Withdrawal Plan:

SWP can be a suitable option if you wish to generate regular income from your investments. Consider reinvesting the redeemed amount into a liquid or floating rate fund, depending on your liquidity needs and risk tolerance.
Tracking Investments:

Utilize online platforms provided by mutual fund houses or third-party financial aggregators for tracking investments. Maintain a consolidated spreadsheet or use investment tracking apps for easy monitoring.
Nomination and Legal Aspects:

Ensure all investments and assets have proper nomination details and legal documentation. Keep your spouse informed about the investment details and maintain organized documents for easy access.
Consult a Financial Advisor:

Seek guidance from a qualified financial advisor to tailor your investment strategy according to your financial goals and risk tolerance.
Prioritize risk management and ensure your investments align with your objectives. Regularly review your portfolio's performance and make adjustments as needed to stay on track towards achieving your goals.

I am Working as central government employee. I am married and have no children. My wife is a home maker. I am sharing comprehensive details about my investments in various mutual funds for your review. In addition to the mutual funds, here is a summary of my current financial situation: Recurring Deposits: I have bank recurring deposits totaling approximately ?8 lakhs. Income and Expenditure: Monthly Net Income: ?95,000 (after TDS, NPS and other deductions) Monthly Expenditure: My monthly expenses range from ?45,000 to ?50,000. This amount does not include the EMI for my land investment. NPS Contribution: Monthly Contribution: ?22,000 (This includes both employee and employer contributions.) Current NPS Holdings: ?21 lakhs I have recently transitioned my NPS fund management to HDFC Pension Management Company which has following allocation: Equity: 49.64% Corporate Debts: 30.21% Government Securities: 20.15% Real Estate: Co-own a land for which I have availed loan from bank with EMI of Rs. ?19,000 per month Insurance: Have term insurance of Rs. 1cr, (I am planning increase cover to 2 Cr.) Family is covered under Central Government Health Scheme (CGHS) which is reimbursement type facility (not cashless). MUTUAL FUND PORTFOLIO MFs where SIPs are discontinued 1. Axis ELSS Tax Saver Fund- Invested lump sum Rs. 75,000/- in Feb & March 2020 2. Canara Rebeco ELSS Tax Saver Fund- Currently invested Rs. 53,000-/- 3. Mirrae Asset ELLS Tax Saver Fund- Invested lump sum Rs. 75,000/- in Feb & March 2021 4. Parag Parekh ELSS: - Currently invested Rs. 1,05,000/- 5. Canara Rebeco Bluechip Equity Fund- Currently invested Rs. 87,000/- (due lack of knowledge and chasing top performer, I have ended up in investing various ELSS fund) MFs where SIPs are continued 1. Quant ELSS- Rs. 5,000/- PM 2. Parag Parikh Flexi Cap- Rs. 3,000/- PM (chose this fund as better alternative of Large cap fund) 3. Quant Small Cap- Rs. 3,000/- PM- (started SIP for exposure to Small Cap) 4. Kotak Emerging Equity- Rs. 3,000/- PM (started SIP for exposure to Mid Cap) 5. Tata Nifty Midcap 150 Momentum 50 – Rs. 3,000/- PM (started SIP for exposure to Mid Cap) As on date, portfolio distribution as Debt- 5.17 % Other- 3.80% Equity- 90.98 % (of total equity 69.80 % in L-Cap, 16.53 in M-Cap and 13.66 in S-Cap) I would appreciate your detailed review of my portfolio and financial condition. Specifically, I am looking for insights into the following areas: • Should I redeem my funds in which SIPs are discontinued which would attract LTCG or should I just continue to hold them? • I have now started to rebalance my portfolio and aim to have distribution of my equity as 50-55% in Large CAP, 35-30% in Mid Cap and 15-20% in Small Cap. Is this a good approach to achieve good return? • I haven’t invested in any debt fund because I have RDs of 8 lakh, which I think, act like both fixed income asset and emergency fund. Is my understanding correct? Or should I invest in some debt fund (pure debt fund or hybrid fund)? • Should I take exposure to international funds and gold funds? • Any recommendations for optimizing my mutual fund portfolio for better performance. Thanks.

Ans: You have done well in diversifying your investments. Your portfolio has a good balance between equity, fixed income (recurring deposits), and NPS contributions. Let's discuss specific aspects of your situation to further optimize your portfolio.

Mutual Fund Portfolio Review
Discontinued SIPs: ELSS Funds

You have several discontinued SIPs in ELSS funds. ELSS funds offer tax benefits but come with a three-year lock-in period. Since these funds are no longer in your active SIP portfolio, consider the following:
Tax Impact: Redeeming these funds will attract long-term capital gains (LTCG) tax. For gains above Rs 1.25 lakh, LTCG is taxed at 12.5%. You should evaluate the taxable impact before redeeming. If the LTCG is substantial, staggering withdrawals across financial years could help minimize tax liabilities.
Performance Monitoring: Review the performance of these funds. If they’re underperforming compared to other ELSS or diversified funds, it might be better to exit. On the other hand, if these funds are delivering good returns, you could hold them for more growth.
Redemption Timing: Since these are tax-saving funds, check the lock-in period status. If the lock-in period is over and the fund’s performance isn’t aligned with your goals, you can consider redeeming them.
Active SIPs: Small, Mid, and Flexi Cap Funds

You have active SIPs in small-cap, mid-cap, and flexi-cap funds. Your strategy to diversify across different market caps is sound, but it's important to monitor:
Market Volatility: Small and mid-cap funds tend to be more volatile. While they can offer higher returns, they are also riskier. Having a balanced exposure across large, mid, and small caps helps manage risks.
Fund Performance: Keep an eye on the performance of your small and mid-cap funds. Ensure that they are consistently performing well against their respective benchmarks.
Review Flexi-Cap Allocation: Flexi-cap funds provide the flexibility to invest across market caps. It’s good that you have exposure to a flexi-cap fund as it adds diversification. Make sure your flexi-cap fund has a strong track record of managing market volatility.
Portfolio Rebalancing: Target Allocation Review
You aim to have a portfolio distribution of 50-55% in large-cap, 30-35% in mid-cap, and 15-20% in small-cap. This is a prudent strategy, especially for wealth accumulation over the long term. Here’s an assessment:
Large-Cap Focus: Large-cap stocks provide stability and lower risk. Targeting 50-55% in large-cap will help cushion the volatility from mid and small-cap investments.
Mid and Small-Cap Allocation: Your exposure to mid and small caps is within a reasonable range. Mid-cap funds can offer a balance of growth and risk, while small-cap funds, though riskier, have the potential for higher returns in the long run.
Ongoing Rebalancing: It’s important to rebalance your portfolio periodically to maintain this allocation, especially during market movements. You can do this by adjusting your SIP amounts or making lump-sum investments in under-allocated segments.
Debt Investment: Role of Recurring Deposits
You have Rs 8 lakhs in recurring deposits (RDs), which act as your fixed-income investment. While RDs are safe, they may not offer the best returns over time. Here’s a detailed view:
Fixed-Income Component: RDs are a good tool for regular savings but may not keep up with inflation. They are better suited for short-term goals or an emergency fund. The return on RDs is usually lower compared to debt mutual funds.
Debt Fund vs RD: A well-diversified portfolio should have some allocation to debt mutual funds, as they tend to offer better post-tax returns than RDs, especially in higher tax brackets. You can consider allocating a portion of your RDs into debt funds, which provide liquidity, tax efficiency, and better returns over the long term.
Hybrid Funds: You could also consider hybrid funds if you want a mix of equity and debt exposure. These funds offer a balance between growth (through equity) and stability (through debt).
International and Gold Fund Exposure
International Funds: Diversifying into international markets can be beneficial, especially for long-term investors. International funds give you exposure to global companies that may not be available in the Indian market. Moreover, they act as a hedge against rupee depreciation. Allocating 5-10% of your portfolio to international funds can enhance diversification.

Currency Risk: Keep in mind that international funds are exposed to currency fluctuations. However, over a long investment horizon, the benefits usually outweigh the risks.
Fund Selection: If you decide to invest in international funds, focus on regions or countries that have strong growth potential or sectors like technology, which are underrepresented in Indian markets.
Gold Funds: Gold is traditionally seen as a safe haven during economic uncertainties. It can serve as a hedge against inflation and market volatility.

Gold Allocation: You could allocate around 5-10% of your portfolio to gold. However, avoid over-exposure, as gold doesn’t generate income and its returns are typically lower over the long term compared to equities.
Investment Routes: Instead of gold mutual funds, you might also consider Sovereign Gold Bonds (SGBs) which offer the benefit of interest payments and tax-free capital gains if held till maturity.
NPS Contribution and Pension Management
You are contributing Rs 22,000 per month to NPS, with a current corpus of Rs 21 lakhs. Your asset allocation within NPS is spread across equity, corporate debt, and government securities.
Equity Allocation: At 49.64%, your equity exposure within NPS is well-placed for growth. As a long-term investor, equity will help build your corpus.
Debt Allocation: The combined 50.36% allocation in corporate debt and government securities provides stability and reduces risk. This balanced allocation ensures that your retirement savings are protected from market volatility.
HDFC Pension Management: Keep reviewing the performance of your pension fund manager. NPS allows you to switch fund managers once a year if needed, so ensure that your chosen manager is delivering competitive returns compared to peers.
Insurance Coverage: Term Plan
Your current term insurance of Rs 1 crore is good, but you’re planning to increase it to Rs 2 crore. This is a wise move as it will better protect your family’s financial future.
Life Cover Adequacy: As a rule of thumb, your term insurance cover should be at least 10-12 times your annual income. Given your monthly income of Rs 95,000, a Rs 2 crore cover will provide ample security for your family in case of an untimely event.
Health Insurance: Since you’re covered under the Central Government Health Scheme (CGHS), which is a reimbursement type facility, it provides a reliable safety net for medical expenses.
Recommendations for Portfolio Optimization
Simplify ELSS Exposure: You have invested in multiple ELSS funds. To optimize your portfolio, consider consolidating your ELSS investments into one or two high-performing funds. This will make your portfolio easier to manage and track.

Continue with Mid and Small Cap Allocation: Your current allocation to mid-cap and small-cap funds seems balanced. Ensure that these funds are delivering competitive returns compared to their benchmarks.

Debt Fund Introduction: Consider introducing a debt mutual fund for better tax efficiency and returns compared to recurring deposits. You can start with a conservative or dynamic bond fund, depending on your risk appetite.

Monitor Regularly: Keep reviewing your mutual funds’ performance. Look at how they perform against their benchmarks and peer funds. If a fund consistently underperforms, consider switching.

Diversify Globally: Allocating 5-10% of your portfolio to international funds will add global diversification and reduce geographical risk. Stick to markets or sectors with strong growth potential.

Gold as a Hedge: Add 5-10% of gold exposure for portfolio stability. Sovereign Gold Bonds (SGBs) are a tax-efficient and reliable option.

Final Insights
Your overall financial situation is sound with a good mix of equity, fixed-income, and real estate investments.

Consider consolidating your ELSS portfolio and introducing debt funds for better returns and risk management.

Adding international funds and a small allocation to gold will enhance diversification and protect against currency fluctuations and inflation.

Continue monitoring and rebalancing your portfolio periodically to ensure you stay on track with your financial goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment