Home > Money > Question
Need Expert Advice?Our Gurus Can Help
Omkeshwar

Omkeshwar Singh  | Answer  |Ask -

Head, Rank MF - Answered on May 14, 2021

Mutual Fund Expert... more
ANUJ Question by ANUJ on May 14, 2021Hindi
Listen
Money

I'm seeking advice on the following:

a. Planning to invest 10k per month in MF for a long term with an objective of wealth creation. Risk appetite is moderate. Please suggest funds.

b. Planning to invest 10Lakh for short term, 6months to 12 months holding. Please suggest some debt funds.

Ans:

Please be informed, that the Equity oriented schemes (Equity / Hybrid) come under high to very high risk categories and not moderate. Therefore, Hybrid balanced advantage can only be considered which has moderately high risk.

  1. ICICI Pru Balanced advantage fund - Growth
  2. Union Balanced advantage fund -- Growth
  3. Tata Balanced advantage fund growth

For 6 to 12 months you may look at low duration funds as under:

  1. Icici Prudential Savings Fund - Growth
  2. Aditya Birla Sun Life Low Duration Fund - Growth-
  3. Hdfc Low Duration Fund - Retail- Growth
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
Money

You may like to see similar questions and answers below

Ramalingam

Ramalingam Kalirajan  |6958 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 04, 2024

Listen
Money
Hello Ulhas joshi sir, All our corpos mostly 90% is in debt(in the form of FDR's, SSSC, LIC etc) and rest 10% in MF and ULIP. I am 32 years and my mother is 61 years. I am working professional in tier 2 city and mother is retired from government job. I am seeking a financial advice to balance out the investments in debt and want some exposure in equity by investing through MF's. We have a total of 3 cr in debt and approx 40 lacs in equity market. Please suggest us the suitable mix so that our corpus would also grow and expenses would also meet out. Our total expenses per month would be around 35 K. Please also suggest the names of mutual funds to start investing?? Regards, Bharat Manik
Ans: Hello Bharat Manik,

It's commendable that you're looking to diversify your investments and seek growth opportunities in equity markets. Here are some suggestions to achieve a balanced portfolio:

Asset Allocation:
Considering your age difference and risk tolerance, you may adopt a balanced approach to asset allocation.
Allocate a significant portion of your portfolio (around 60-70%) to debt instruments to provide stability and income generation, especially considering your mother's retirement.
Allocate the remaining portion (around 30-40%) to equity investments to benefit from potential growth opportunities over the long term.
Mutual Fund Selection:
For equity exposure, consider investing in a mix of large-cap, multi-cap, and balanced funds to diversify across market segments and manage risk effectively.
Opt for funds with a consistent track record of performance, experienced fund managers, and a strong investment philosophy aligned with your objectives.
Regular Review:
Regularly review your portfolio to ensure it remains aligned with your financial goals, risk tolerance, and market conditions.
Rebalance your portfolio as needed to maintain the desired asset allocation and optimize returns.
Emergency Fund:
Ensure you have an adequate emergency fund set aside in liquid instruments to cover unforeseen expenses and emergencies.
Consultation:
Consider consulting with a Certified Financial Planner to receive personalized advice tailored to your specific needs and goals.
They can help you develop a comprehensive financial plan that addresses your investment objectives, risk tolerance, and retirement needs.
By adopting a balanced approach to asset allocation and investing in diversified mutual funds, you can work towards achieving your financial goals while managing risk effectively.

..Read more

Ramalingam

Ramalingam Kalirajan  |6958 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 04, 2024

Listen
Money
Hello sir, All our corpos mostly 90% is in debt(in the form of FDR's, SSSC, LIC etc) and rest 10% in MF and ULIP. I am 32 years and my mother is 61 years. I am working professional in tier 2 city and mother is retired from government job. I am seeking a financial advice to balance out the investments in debt and want some exposure in equity by investing through MF's. We have a total of 3 cr in debt and approx 40 lacs in equity market. Please suggest us the suitable mix so that our corpus would also grow and expenses would also meet out. Our total expenses per month would be around 35 K. Please also suggest the names of mutual funds to start investing?? Regards, Bharat Manik
Ans: Hello Bharat,

It's commendable that you're seeking to balance your investments and diversify into equity through mutual funds. Here's a tailored recommendation for you and your mother:

Balancing Debt and Equity:

Emergency Fund: Ensure you have an emergency fund equivalent to at least 6-12 months of expenses kept in liquid instruments like savings accounts or short-term debt funds.
Debt Investments: Since you already have a substantial portion of your corpus in debt instruments, continue to maintain this allocation to ensure stability and regular income. Consider diversifying across different types of debt instruments for optimal risk management.
Equity Investments: Given your age and long-term investment horizon, it's prudent to gradually increase your exposure to equity through mutual funds. Start with allocating a portion of your investable surplus to equity funds.
Suitable Mutual Funds:

Diversified Equity Funds: Look for well-managed diversified equity funds with a proven track record of consistent performance. These funds offer exposure to a broad range of stocks across sectors and market capitalizations.
Balanced Advantage Funds: These funds dynamically manage the equity-debt allocation based on market conditions, making them suitable for investors seeking a balanced approach.
Large Cap Funds: Consider large-cap equity funds for stability and lower volatility. These funds invest in large, established companies with a track record of stable earnings.
Hybrid Funds: Opt for hybrid funds, which invest in both equity and debt instruments, offering a balanced approach to risk and return.
For personalized recommendations and to ensure your investment strategy aligns with your financial goals and risk tolerance, I recommend consulting with a Certified Financial Planner (CFP) or a qualified financial advisor. They can provide customized guidance based on your unique circumstances and help you navigate the complexities of financial planning.

..Read more

Ulhas

Ulhas Joshi  |279 Answers  |Ask -

Mutual Fund Expert - Answered on Mar 07, 2024

Listen
Money
Hello Ulhas joshi sir, All our corpos mostly 90% is in debt(in the form of FDR's, SSSC, LIC etc) and rest 10% in MF and ULIP. I am 32 years and my mother is 61 years. I am working professional in tier 2 city and mother is retired from government job. I am seeking a financial advice to balance out the investments in debt and want some exposure in equity by investing through MF's. We have a total of 3 cr in debt and approx 40 lacs in equity market. Please suggest us the suitable mix so that our corpus would also grow and expenses would also meet out. Our total expenses per month would be around 35 K. Please also suggest the names of mutual funds to start investing?? Regards, Bharat Manik
Ans: Hi Bharat & thanks for writing to me. I am assuming that you are able to cover your living expenses from your salary & Mothers' pension.

Assuming that you are fine with the risks of equity, you can consider rebalancing your portfolio from the debt tilt to equity tilt.

You can consider investing around 1 Crore in mutual funds, at the below allocation:

1-Small Cap Funds: 10%
2-Mid Cap Funds : 10%
3-Large Cap Funds:15%
4-Flexi Cap Funds:15%
5-Balanced Advantage Funds/Dynamic Asset Allocation Funds: 25%
6-Multil Asset Allocation Funds:25%

The investment in pure equity funds (points 1 to 4) will help your corpus grow but with higher volatility & the BAF/DAAF & Multi Asset Allocation Funds can provide relative stability to your portfolio.

I recommend you to meet a financial planner who can understand your needs & goals to craft a detailed plan for you.

..Read more

Latest Questions
Pushpa

Pushpa R  |24 Answers  |Ask -

Yoga, Mindfulness Expert - Answered on Nov 05, 2024

Listen
Ramalingam

Ramalingam Kalirajan  |6958 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 05, 2024

Asked by Anonymous - Nov 05, 2024
Money
Sir I am 47 years old and want to retire in next 2-3 years. My portfolio is as under FD-22 L MF-22 L. ( SIP of 33000 running) Gold--10 L EPF--24 L and App Gratuity -10 L Equity--10 L Rental Income -25000 per month from 80 Lacs flat. ( No loan pending now) 1 cr term plan and 10 l mediclaim running Parental House -2.5 cr and Land -2.5 cr. My son is studying in second year of engineering. And my monthly hone expense is not more than 30000-35000 per month. Can I afford to retire ?
Ans: It’s commendable that you've accumulated a diverse portfolio with a clear retirement goal. Let's evaluate if your current portfolio aligns with a secure retirement.

Portfolio Review and Income Assessment
Based on your retirement aspirations, let’s consider each component of your portfolio and its potential to generate sustainable income:

Fixed Deposits (FD): Rs 22 lakh
FD interest can serve as a steady income source, though it typically yields lower returns, which may not keep up with inflation over the long term.

Mutual Funds (MF): Rs 22 lakh, with a SIP of Rs 33,000
MFs offer potential growth and help combat inflation. Continuing your SIPs could grow this corpus further, providing higher returns than fixed-income sources.

Gold: Rs 10 lakh
Gold adds stability and can be liquidated if needed. However, it might not be the best primary income source.

Employee Provident Fund (EPF): Rs 24 lakh and Gratuity Approx Rs 10 lakh
EPF and gratuity offer safe post-retirement funds. When you withdraw, they can be used as a source of regular income or reinvested for returns.

Equity Investments: Rs 10 lakh
Your equity investments add growth potential. Over time, this can be a crucial source to combat inflation.

Rental Income: Rs 25,000 per month
Rental income provides a consistent cash flow, covering a large portion of your monthly expenses. This income will be valuable post-retirement to meet regular needs.

Expense and Income Projection
With monthly expenses at Rs 30,000–35,000, and rental income already covering most of these costs, your current lifestyle is well supported. However, to retire comfortably, a buffer for healthcare, travel, and inflation is necessary.

Strategy for Retirement Readiness
Based on your assets and expected needs, here’s a recommended approach to secure a steady retirement income:

Mutual Fund Strategy
Continuing your SIPs for the next 2-3 years will help grow your corpus further. Consider moving part of the equity-based mutual funds into debt funds close to retirement to reduce risk while generating returns.

Systematic Withdrawal Plan (SWP)
At retirement, you can initiate an SWP from your mutual fund corpus, providing a steady income. This strategy allows capital appreciation with controlled withdrawals, reducing the risk of prematurely depleting your funds.

Fixed Deposit Laddering
To maximise interest rates and ensure liquidity, consider a laddering strategy with your FDs. This will help meet emergency needs and take advantage of better rates.

Rental Income
Your rental income of Rs 25,000 is a reliable source. To protect it, ensure the property remains well-maintained and consider lease renewals with trusted tenants to maintain stability.

Contingency for Healthcare and Son’s Education
Health Insurance: Rs 10 lakh
Assess your current health cover, especially considering rising medical costs. A top-up or super top-up plan could add an extra layer of protection.

Son’s Education
Your son’s education may require additional funding. Any shortfall could be met by partial liquidation of non-core assets, like gold or FDs, if needed.

Estate and Legacy Planning
Your parental house and land provide substantial long-term security. Though not income-generating immediately, they offer future flexibility if liquidated or rented.

Final Insights
Your assets, income sources, and low monthly expenses indicate a strong readiness for retirement. With minor adjustments for healthcare and education, you can comfortably meet your goals. Continuing your current SIPs for the next few years and optimising your FD and MF corpus will help sustain your income post-retirement.

Best Regards,

K. Ramalingam, MBA, CFP,
Chief Financial Planner
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

...Read more

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

Close  

You haven't logged in yet. To ask a question, Please Log in below
Login

A verification OTP will be sent to this
Mobile Number / Email

Enter OTP
A 6 digit code has been sent to

Resend OTP in120seconds

Dear User, You have not registered yet. Please register by filling the fields below to get expert answers from our Gurus
Sign up

By signing up, you agree to our
Terms & Conditions and Privacy Policy

Already have an account?

Enter OTP
A 6 digit code has been sent to Mobile

Resend OTP in120seconds

x