Anonymous: I am planning to do SIP of Rs 7,000 for next 15 years in Mirae Asset Global X Artificial Intelligence & Technology ETF Fund of Fund and Rs 7,000 in Mirae Asset Global Electric & Autonomous Vehicles ETFs FoF.
Pls advise if it’s a good option.
If you plan to invest for the long term, then it is always advisable to have your core holdings in well-diversified fund categories like largecap/flexicap funds.
While having sectoral/thematic investments may work very well at times, they also come with the risk of going completely wrong. Hence sectoral/thematic investments are best avoided by most investors.
Anonymous: Hi, I have invested in below given MF and my future target is Rs 50 lakhs+ in the next 10 yrs.
My investments are as below:
1. Tata Small Cap Fund Reg-G -- Rs 2,000 monthly
2. Canara Robeco Small Cap Fund Reg-G -- Rs 1,000 monthly
3. ICICI Prudential Value Discovery Fund -- Rs 2,000 monthly
4. ICICI Prudential Bluechip Fund -- Direct Plan -- Growth -- Rs 2,000 monthly.
Please suggest if I have selected right MF or I need to add/switch to other best MF if any. Thank you.
To reach Rs 50 lakh in 10 years, you need to invest about Rs 21-23,000 per month, assuming 11-12 per cent average portfolio returns.
Since no data about existing investments is provided and given that you are doing a total of Rs 7,000 per month in SIPs, there is first of all a need to increase your monthly investments to the required amount.
Having said that, you don't need so many schemes to invest Rs 20,000-25,000 per month. Just having a couple of schemes (like largecap index funds, and flexicap funds) would be sufficient.
Anonymous: How do I earn monthly income of Rs 2 lakhs post retirement which is 15 years away? Please suggest options.
If we calculate using a few assumptions -- like post-retirement life of 25 years, average inflation of 6 per cent per annum during that period and portfolio returns of about 8 per cent (assuming a judicious mix of equity and debt with a higher allocation to the latter) -- then you need to have a corpus of about Rs 4.8 cr.
This is to ensure that starting at Rs 2 lakh monthly (after 15 years), your monthly income from there on increases by at least 6 per cent assumed inflation.
If you are starting from zero, you need to invest about Rs 1.1 lakh per month assuming equity:debt 50:50 and this monthly investment amount should increase by at least 5 per cent every year.
To reach this target corpus, you have a sufficiently long runway of 15 years so you should be willing to invest a major chunk in equities via equity funds if your risk appetite allows for it.
You may also have some of the existing assets which too can be earmarked towards this retirement corpus.
As mentioned, for equity allocation, choose diversified equity funds categories like passive largecap funds, flexicap funds, and large & midcap funds (and if you have a sufficiently high-risk appetite, then mid-and-small cap funds as well).
For debt, your EPF+VPF along with PPF should be sufficient.
When the time comes for retirement (in 15 years), you may have to divide your portfolio into 2 buckets: One to take care of income needs (via SCSS, debt funds, PPF withdrawals, bonds, etc) and the other for growth (via equity funds and ETFs).
Rajeev: I am a poor man only earning Rs 15,000 per month.
My age is 42 years.
I want to invest successfully at least 60 per cent of my income.
Please tell me where shall I invest so that my hard earned money doesn’t get wasted at all and, within 60 years, I will get a good return?
First, please ensure you set aside funds equal to at least 6-12 months of your basic monthly expenses. This can be in the form of a safe bank FD.
Also, get term life insurance and health insurance for you and your family if it's still not there.
Only after that should you begin investing.
Since you wish to invest for the next 18 years, you can consider starting monthly SIPs equally in one scheme each from largecap and flexicap fund categories. These are equity fund categories which are suitable for long-term investing for those who have a suitable risk appetite.
The journey will not be smooth like a bank FD or post office deposit but if you stick for long enough, equity has historically delivered 10-12 per cent average annual returns.
Neeraj: Dear Sir, I am Neeraj Gupta. I am 55 yrs old. I have to invest Rs 30 lakh for 3-5 years. Pl. advise me how and where to invest?
You have not provided details of your other investments and hence there is no way of knowing what your existing asset allocation is.
But 3-5 years is a short term and ideally, you should not be taking too much risk in this time horizon. Having said that, and assuming you have at least a moderately aggressive risk appetite, you can have an allocation of about 30-40 per cent equity:debt initially.
For this, you can have the following allocation initially:
i) Largecap funds -- 15 per cent
ii) Flexicap funds -- 15 per cent
iii) Aggressive hybrid funds -- 20 per cent
iv) Rest in debt funds
Later on, as you get closer to the goal day, you need to de-risk and reduce equity allocation.
Since the actual advice will depend on a lot of other factors, it is suggested that you get in touch with an investment advisor with full details to better plan your finances. Doing so is even more important as you are nearing the retirement age and will need to position your portfolio accordingly in next few years.
rediffGURU Dev Ashish's personal disclaimer: As a SEBI RIA, I cannot comment on specific schemes/funds that are provided or asked for in the questions in the platform. The views expressed above should not be considered professional investment advice or advertisement or otherwise. No specific product/service recommendations have been made and the answers here are for general educational purposes only. The readers are requested to take into consideration all the risk factors including their financial condition, suitability to risk-return profile and the like and take professional investment advice before investing.
- You can ask rediffGURU Dev Ashish your questions HERE.
General disclaimer: This article is meant for information purposes only. This article and information do not constitute a distribution, an endorsement, an investment advice, an offer to buy or sell or the solicitation of an offer to buy or sell any securities/schemes or any other financial products/investment products mentioned in this QnA or an attempt to influence the opinion or behaviour of the investors/recipients.
Any use of the information/any investment and investment related decisions of the investors/recipients are at their sole discretion and risk. Any advice herein is made on a general basis and does not take into account the specific investment objectives of the specific person or group of persons. Opinions expressed herein are subject to change without notice.