Hi Team My before tax salary is roughly 5.6 lakh per month and I am hoping to get 3.75 in had (after tax and pf cut) I just took a car loan and planning to secure home loan which will cost me 1.25 lakh per month together. My monthly expenses are 1 lakh roughly That's leaves me another 1.5 lakh which I need to invest I am confused between keeping that in savings account for sbi max saver to pay lower intreste along Or Invest lakh into MF and rest 50 in max savings. Which option would be better and if I choose to go with MF options can you suggest few MF to balance my portfolio Thanks in advance

Ans: Hello Pranjal. Your current portfolio diversification sounds good except ABSL PSU Equity Fund. With multiple goal align in next 10-20yrs. I would suggest to consider small cap , midcap , and flexicap categories for your additional portfolio.

Ans: You have started SIPs with Rs. 30,000 monthly in various mutual funds. This is a positive step toward building your financial future. Here’s a breakdown of your investments:

ELSS Tax Fund: Rs. 10,000

Mid Cap Index Fund: Rs. 4,500

Flexi Cap Fund: Rs. 4,000

Small Cap Fund: Rs. 3,500

Mid Cap Fund: Rs. 2,000

Growth Opportunity Fund: Rs. 3,500

Dynamic Asset Allocation Fund: Rs. 2,500

Evaluation of Your Portfolio

1. ELSS Tax Fund

Investing Rs. 10,000 in an ELSS fund helps you save taxes under Section 80C. It also provides potential for long-term growth.

2. Mid Cap Index Fund

Mid cap index funds track the mid cap segment. However, they do not adjust to market changes. Actively managed mid cap funds can offer better returns.

3. Flexi Cap Fund

Flexi cap funds invest across market caps. This provides flexibility and diversification. Your Rs. 4,000 investment is a good choice.

4. Small Cap Fund

Small cap funds can offer high returns but come with higher risk. Your Rs. 3,500 investment is suitable for aggressive growth.

5. Mid Cap Fund

Mid cap funds balance risk and reward. They offer growth potential with moderate risk. Your Rs. 2,000 investment is well-placed.

6. Growth Opportunity Fund

These funds focus on growth-oriented stocks. They can deliver high returns. Your Rs. 3,500 investment aligns with growth objectives.

7. Dynamic Asset Allocation Fund

These funds adjust their equity-debt mix based on market conditions. They provide growth with stability. Your Rs. 2,500 investment is a wise choice.

Disadvantages of Index Funds

Index funds mimic the market. They do not adjust to changing market conditions. This can limit potential returns. Actively managed funds offer professional management and adapt to market changes, often delivering better performance.

Disadvantages of Direct Funds

Direct funds require constant monitoring and active management. This can be time-consuming and complex. Regular funds, managed through a Certified Financial Planner (CFP), offer professional advice and portfolio management.

Recommendations for Additional Investments

You have Rs. 52 lakhs in the bank and are considering investing it. Here are some suggestions:

1. Balanced Advantage Funds

These funds dynamically adjust the equity-debt mix. They provide growth with reduced risk.

2. Debt Funds

Debt funds provide stability and regular income. They are good for balancing your portfolio.

3. International Funds

These funds invest in global markets. They offer diversification beyond Indian markets.

4. Liquid Funds

Liquid funds offer high liquidity and are ideal for short-term needs. They provide better returns than a savings account.

Investing in Mutual Funds vs. Buying Property

Investing in mutual funds can provide better liquidity and diversification. Real estate investments require a larger capital outlay and involve risks such as market fluctuations, maintenance, and legal issues.

Systematic Investment Plan (SIP)

Continue with your SIP approach. It helps in disciplined investing and averaging out the purchase cost, reducing market timing risk.

Regular Portfolio Review

Regularly review your portfolio. Ensure it aligns with your goals and risk tolerance. Make adjustments as needed.

Consult a Certified Financial Planner

A CFP can provide tailored advice. They offer professional portfolio management and ensure your investments align with your financial goals.

Final Insights

Your current mutual fund investments are diversified and aligned with your financial goals. Consider replacing the index fund with an actively managed fund for better returns.

Invest additional funds in balanced advantage, debt, international, and liquid funds. Continue with SIPs and consult a CFP for professional advice.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: You have a well-diversified portfolio and a clear goal of retiring with a corpus of Rs 15 crores in 14 years. Let's break down a strategy to achieve this goal.

Current Financial Position
Age: 41 years
Monthly take-home salary: Rs 1.8 lakhs
Monthly expenses: Rs 1.3 lakhs
Family: Four members, with kids in primary school, dependent parents and relatives
Investments and Assets
LIC: Rs 1.6 lakhs/annum, expected return of 50+ lakhs by 2038
HDFC Sanchaya+: Rs 4 lakhs/annum, expected annual return after 2038
PPF: Rs 1.5 lakhs/annum, expected return of 40+ lakhs by 2034
PF: Current value around 20+ lakhs
Land: Worth Rs 25 lakhs
Flat under construction: Rs 25 lakhs invested, total payment will be Rs 1.15 crores by 2028
Mutual Funds: Current value Rs 8 lakhs, total investment Rs 3.5 lakhs (lumpsum in 2017)
Cash in hand (FD): Rs 70 lakhs
Emergency fund (FD): Rs 20 lakhs
Equity: Rs 1.6 lakhs invested, current value Rs 2.7 lakhs
Term insurance: Rs 50 lakhs
Health insurance: Rs 20 lakhs
Retirement Goal
Target corpus: Rs 15 crores
Time horizon: 14 years
Risk appetite: Moderate
Investment Strategy
1. Increase SIPs in Mutual Funds:

Considering your moderate risk appetite, invest in a mix of large-cap, mid-cap, and hybrid mutual funds. Actively managed funds can offer better returns compared to index funds.

2. Maximise Tax Savings:

Continue maximising your PPF and PF contributions for tax savings and secure returns.

3. Diversify Further:

Consider diversifying into debt funds for stability and fixed returns. This will balance your equity investments.

4. Real Estate Investments:

Be cautious with the flat under construction. Ensure timely completion and clear legal title to avoid future issues.

5. Emergency Fund:

You already have a substantial emergency fund. Maintain this for liquidity during unforeseen events.

6. Equity Investments:

Continue investing in equities. Direct stocks can offer high returns but require careful selection and monitoring.

7. Review Insurance Cover:

Ensure your term insurance cover is adequate. Consider increasing it to match your financial responsibilities and future goals.

Regular Monitoring and Review
Annual Review:

Regularly review your portfolio performance. Adjust investments based on market conditions and financial goals.

Financial Planner Consultation:

Seek advice from a Certified Financial Planner periodically. They can provide tailored advice and keep your investments on track.

Final Insights
You are on a good financial path with a diversified portfolio. Focus on increasing your SIPs in mutual funds and diversifying further into debt funds. Ensure your real estate investments are secure and maintain your emergency fund. Regularly review your portfolio and seek professional advice to stay on track for a comfortable retirement.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in