Hello sir, I am working in pharmaceutical industry with Annual CTC of 11.00 per Annum. Below is my investments 1. Aditya birla sunlife Multicap fund -Rs 1000 per month through SIP (Since 2021) 2. Invesco India Flexi Cap fund- Rs 1000 per month through SIP (Since 2022) 3.Invesco India multicap fund-Rs 1000 per month through SIP (Since 2021) 4. Kotal emerging equity fund-Rs 1000 per month through SIP (Since 2021) 5. Kotal tax save fund- Rs 500 per month through SIP (Since 2021) 6. Kotal multicap fund regular-Rs 1000 per month through SIP (Since 2021) 7. Nippon Flexi Cap fund-Rs 1000 per month through SIP (Started 2 months back) 8. Union Tax saver fund-Rs 1500 per month through SIP 9.PPF-1.5 Lac annually 10. NPS-50000 Rs annually (Since 2015) 11. LIC-50000 Rs annually (Since 2021) Sir, I want to know that we all these investment collectively could generate around 50 Lac Rs in next 10-12 days. Also kindly suggest me some good investment option to save more for my child education & marriage. Thanks & Regards: Sanjeev Kumar

Ans: It's commendable to see your commitment to building a secure financial future for your family. Your current investments are well-diversified, and your proactive approach is highly appreciable. Let's dive deeper into your portfolio and explore some additional strategies to optimize your investments further.

Evaluating Your Current Investments
Your portfolio reflects a well-thought-out approach to diversification and long-term growth. Here's a detailed look at each component:

Mutual Funds
Aditya Birla Sun Life Multicap Fund
Invesco India Flexi Cap Fund
Invesco India Multicap Fund
Kotak Emerging Equity Fund
Kotak Tax Saver Fund
Kotak Multicap Fund Regular
Nippon Flexi Cap Fund
Union Tax Saver Fund
Your SIP investments in these funds since 2021 and 2022 indicate a strong commitment to regular investing. Multi-cap and flexi-cap funds provide exposure to various market capitalizations, enhancing your portfolio's diversity and potential for growth.

Public Provident Fund (PPF)
Your annual contribution of Rs 1.5 lakh to PPF is an excellent decision. PPF offers tax benefits under Section 80C and provides a secure, long-term investment with guaranteed returns. This stability is crucial for a balanced portfolio.

National Pension System (NPS)
Contributing Rs 50,000 annually to NPS since 2015 is another wise choice. NPS offers tax benefits and helps in building a substantial corpus for retirement. Its mix of equity and debt provides a balanced growth approach.

Life Insurance Corporation (LIC)
Your annual investment of Rs 50,000 in LIC since 2021 shows a focus on risk management and family security. However, it may be worth re-evaluating this investment.

Potential Growth of Investments
While exact future values depend on various factors, here's a general estimation based on typical returns:

Mutual Funds
Equity mutual funds generally offer significant growth potential over the long term. Assuming an average annual return, your diversified portfolio could grow substantially over 10-12 years.

PPF and NPS
PPF's assured returns will steadily grow your investment. NPS, with its equity exposure, offers higher returns potential over the long term. Both instruments are crucial for stability and growth.

Recommendations for Improvement
Increase SIP Contributions
Increasing your SIP contributions can significantly impact your portfolio's growth. Even small incremental increases can lead to substantial growth over the years.

Explore Child-Specific Funds
Consider investing in mutual funds designed specifically for child education and marriage expenses. These funds are structured to provide growth and stability for long-term goals.

Balanced Funds
Balanced funds, which invest in both equity and debt, provide growth with reduced volatility. They can be an excellent option for goals with a medium-term horizon.

SIP Top-Ups
Opt for SIP top-up facilities. This feature allows you to increase your SIP contributions automatically as your income rises, ensuring your investments keep pace with inflation and changing financial goals.

Disadvantages of Index Funds
Index funds might seem attractive due to lower fees, but they have limitations:

Passive Management: Index funds only replicate the index performance and do not aim to outperform it.
No Flexibility: They cannot adjust to market conditions and remain invested in a fixed set of stocks.
Potential Lower Returns: Actively managed funds, despite higher fees, can often outperform due to active management and strategic stock selection.
Benefits of Actively Managed Funds
Actively managed funds offer several advantages:

Higher Returns: Skilled fund managers aim to outperform the market, potentially providing higher returns.
Professional Expertise: Fund managers actively manage portfolios, making strategic decisions to maximize returns.
Market Responsiveness: These funds can adjust to market conditions, potentially mitigating losses during downturns.
Regular Funds vs. Direct Funds
While direct funds have lower expense ratios, investing through a Certified Financial Planner (CFP) with MFD credentials has significant benefits:

Expert Guidance: CFPs provide tailored advice, helping you choose the best funds aligned with your financial goals.
Comprehensive Planning: CFPs offer holistic financial planning, covering tax planning, retirement planning, and risk management.
Ease of Management: Investing through a CFP ensures regular monitoring and rebalancing of your portfolio, keeping it aligned with your goals.
Reevaluating Your LIC Investment
Consider Surrendering LIC Policy
Life insurance policies like those offered by LIC often combine insurance with investment, which may not be the most efficient use of your funds. The returns on such policies are generally lower compared to other investment options. It might be beneficial to consider surrendering the LIC policy and reallocating those funds.

Opt for Term Insurance
Term insurance offers higher coverage at a lower premium. This ensures that your family's financial security is taken care of in case of any unfortunate event, without the investment component.

Redirect Funds to Mutual Funds
The amount you save from the LIC premiums can be redirected to mutual funds. This could enhance your investment portfolio's growth potential. Mutual funds generally provide better returns compared to the endowment or traditional life insurance policies.

Additional Investment Strategies for Child's Future
To further secure your child's future, consider the following:

Child-Specific Investment Plans
These plans are designed to meet the financial needs of your child’s education and marriage. They offer a mix of growth and stability, ensuring funds are available when needed.

Equity-Linked Savings Schemes (ELSS)
ELSS funds offer tax benefits under Section 80C and have the potential for high returns. They are a good option for long-term investment goals like child education.

Systematic Investment Plans (SIPs)
Continue with SIPs and consider increasing the amounts periodically. SIPs offer the benefit of rupee cost averaging and compound growth over time.

Conclusion
Your current investment strategy is commendable, with a good mix of mutual funds, PPF, NPS, and LIC. However, reevaluating your LIC policy and considering term insurance plus mutual funds could enhance your portfolio's efficiency. Increasing your SIP contributions, exploring child-specific funds, and opting for actively managed funds over index funds can further optimize your financial planning. Regular reviews with a Certified Financial Planner will ensure your investments remain aligned with your goals, securing a bright future for your family.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in