Mutual fund query for single and retired:: Business Line

Please Share::

�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��

��

-->

I am 33, single, and earn ₹1 lakh a month. I have around ₹5 lakh in PPF and ₹15 lakh in bank FD. Kindly suggest some good funds in which I can start investing. I don’t want to take high risks. I have no liabilities.

Bilkees Begum

A combination of debt and equity is necessary to build a balanced portfolio.

Early in your career, you must have greater exposure to equity, which must be lowered as you grow older and minimised at the time of retirement.

You have not stated how much you can spare each month for savings in mutual funds. However, since you have no liabilities, we are assuming you can invest around ₹25,000 a month. You can spread the amount across five funds. Put ₹5,000 each in Franklin India Prima Plus, ICICI Prudential Dynamic and UTI Opportunities. These funds invest predominantly in large-cap stocks, which are less risky.

The remaining ₹10,000 can be equally divided between Mirae Asset India Opportunities, which invests across market caps and HDFC Balanced.

We have suggested a moderate-risk portfolio, keeping in mind that you do not want to take high risks. Take cognisance of their performance once a year and make course corrections, if necessary.

I am a retired person having a surplus of ₹20,000 every month, which I would like to invest in mutual funds only over a period of five years. I already have an investment of ₹15 lakh in the stock markets, made over a period of time. Kindly suggest four-five funds.

Mohan Raj

Since you are already an active investor in direct equities, you must be well aware of the risks that market-related investments hold — more so, in the case of retired people, for whom capital preservation is more important than returns. Besides, you also have a time frame of five years, which may not be sufficiently long to derive superior returns. A 7-10-year timeframe, ideally linked to a goal, would work better.

Since you already have direct equity investments, we suggest for you a portfolio that would soften risks and provide reasonable returns.

Invest ₹5,000 each in Canara Robeco Monthly Income Plan (MIP) and Reliance MIP. These MIPs invest 75-80 per cent of their portfolio in safe debt instruments and have been pretty consistent in dividend payments. The dividend income will help augment your other income sources. You can invest another ₹5,000 in Birla Sun Life Dynamic Bond Fund. This fund invests in a basket of debt instruments, such as government securities, certificate of deposits, top-rated corporate debt, and debentures, and maintains the maturity profile of its investments in tune with the market direction. Since you already have appetite for equities, you can invest the last chunk of ₹5,000 in ICICI Pru Focused Bluechip Equity, a large-cap-oriented fund with a good record, both in rallies and market falls.