Dear Sir...Im turing 36 this Dec....I have home loan remaining around 33.5 lakh...Im looking forward to close this by end of 2028 and also to build corpus nearly 20 lakh new property down payment...my investments are as per below,
1.Quant/kotak/axis small cap direct growth- 10K/month(9 month old) 2.parag parikh ELSS tax saver- 2K/month(12 month old) 3.mirae asset ELSS tax saver-1.5K/month(12 month old) 4.quant ELSS tax saver-3K/month(16 month old) 5.Kotak ELSS tax saver-2K/month(16 month old) 6.SBI PSU direct plan-3K/month( 1 month) 6.Aditya birla sunlife PSU equity fund- 5K/month(1 month) need your expertise if I need to change funds...these are combined investment by me & my wife..TAX saver are required to avoid tax liability under 80C...how much I need to invest further to achive the goal.....
Ans: Turning 36 this December, you have clear financial goals: closing your home loan by the end of 2028 and building a corpus of nearly Rs 20 lakh for a new property down payment. Your current investments reflect a thoughtful approach to achieving these objectives. Let's analyze your strategy and suggest ways to optimize your portfolio and achieve your goals effectively.
Current Investment Analysis
Your investment portfolio includes a mix of small-cap funds, ELSS tax saver funds, and sector-specific funds. Here’s a breakdown of your monthly SIPs:
Small Cap Direct Growth Funds: Rs 10,000 per month.
Parag Parikh ELSS Tax Saver: Rs 2,000 per month.
Mirae Asset ELSS Tax Saver: Rs 1,500 per month.
Quant ELSS Tax Saver: Rs 3,000 per month.
Kotak ELSS Tax Saver: Rs 2,000 per month.
SBI PSU Direct Plan: Rs 3,000 per month.
Aditya Birla Sunlife PSU Equity Fund: Rs 5,000 per month.
These investments are well diversified across different categories and offer tax benefits under Section 80C. Let’s explore each category to ensure they align with your goals.
Evaluating Fund Categories
1. Small Cap Funds
Small-cap funds have high growth potential but come with higher volatility. Investing Rs 10,000 per month is significant. Given your long-term horizon, these can provide substantial returns but should be monitored regularly.
2. ELSS Tax Saver Funds
ELSS funds offer tax benefits and have a mandatory three-year lock-in period. Your diversified investment in multiple ELSS funds is good for tax planning and long-term growth. However, consolidating into fewer funds might make portfolio management easier.
3. Sector-Specific Funds (PSU Funds)
Sector-specific funds can provide higher returns during sectoral booms but carry higher risk. Investing in PSU funds can be beneficial if you believe in the sector’s growth, but diversifying across sectors can reduce risk.
Suggestions for Portfolio Optimization
Review and Consolidate ELSS Funds
While having multiple ELSS funds diversifies risk, consolidating into two or three top-performing ELSS funds can simplify management and potentially enhance returns. Choose funds with consistent performance and robust management.
Balanced Allocation in Small Cap and Large Cap Funds
Given the volatility of small-cap funds, consider allocating a portion of your investments to large-cap or multi-cap funds. These funds provide stability and steady growth, balancing the high risk of small-cap investments.
Diversify Sector-Specific Investments
Instead of concentrating solely on PSU funds, consider diversifying into other promising sectors or opting for diversified equity funds. This approach can mitigate sector-specific risks and improve overall portfolio performance.
Calculating Additional Investment Needed
To close your home loan by the end of 2028 and accumulate Rs 20 lakh for a new property down payment, you need to calculate the total amount required and the additional investments needed.
Home Loan Repayment Strategy
Assuming you have 5 years to repay Rs 33.5 lakh:
Monthly EMI: Rs 22,000 (current)
Additional Monthly Investment: Calculate the extra amount needed based on your repayment schedule and interest rate.
Building Corpus for Down Payment
To accumulate Rs 20 lakh in 5 years, you need to invest systematically. Assuming an average annual return of 12% from your mutual funds, calculate the monthly SIP required.
Suggested Investment Plan
Increase SIPs for Goal Achievement
Home Loan Repayment: Allocate additional monthly funds to prepay your loan. Utilize any bonuses or windfalls to reduce principal.
Down Payment Corpus: Increase your SIPs in diversified equity funds and ELSS funds to achieve the required Rs 20 lakh.
Example Allocation
Increase SIP in diversified equity funds: Rs 5,000 per month.
Additional SIP in ELSS funds: Rs 3,000 per month.
Allocate any surplus income to a debt fund for lower risk and liquidity.
Monitoring and Adjustments
Regularly review your portfolio to ensure it aligns with your financial goals. Adjust your investments based on market conditions and personal financial changes.
Conclusion
Your current investments and clear financial goals set a strong foundation for achieving financial independence and securing your future. By optimizing your portfolio, increasing SIPs, and strategically repaying your home loan, you can meet your objectives efficiently.
Feel free to reach out for personalized advice or assistance in structuring your investment portfolio. I'm here to help you optimize your investments and achieve your financial objectives.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in