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MFs to build a large retirement corpus

March 17, 2021 08:54 IST

'My age as on date is 39 years.'
'Risk appetite is medium.'
'Request you to please guide me with your valuable inputs in relation to building a large retirement corpus.'

Illustration: Dominic Xavier/Rediff.com
 

Omkeshwar Singh, Head, Rank MF, a mutual fund investment platform, answers your queries:


dileep zalpuri: I would like to request you to advise on debt funds. I have some FD matured and since FD interest rates are low, therefore I would like to invest some portion in debt funds. Can you please advise which funds I should choose?

I want to take minimum risk and am looking for long term.

Omkeshwar Singh: You may consider the below in banking and PSU and corporate bond fund category

1. Hdfc Banking And Psu Debt Fund - Regular Growth Option

2. Kotak Banking And Psu Fund - Growth

3. Idfc Corporate Bond Fund Regular Plan-growth

4. Hdfc Corporate Bond Fund - Growth Option

Kishore Babulal Purohit: I am looking for longer horizon of 15/20 years from now with an objective of creating a large corpus for my retirement. I am already investing Rs 8000 in below SIPs and request your expert guidance / views whether I should continue investing in such funds or make any change in the strategy. My Age as on date is 39 years. Risk appetite is medium. Request you to please guide with your valuable inputs in relation to the above.

1. Quantum Long Term Equity Value Fund - Direct (G)

2. L&T Emerging Businesses Fund - Regular Plan (G)

3. Kotak Bluechip Fund - Direct Plan (G)

4. IDFC Tax Advantage (ELSS) Fund - Direct Plan (G)

5. SBI Small Cap Fund (G)

6. Canara Robeco Blue Chip Equity Fund - Regular Plan (G)

7. Kotak Standard Multicap Fund - Regular Plan (G)

8. Mirae Asset Emerging Bluechip Fund - Direct Plan (G)

9. DSP World Energy Fund - Regular Plan (G)

10. DSP Equity Opportunities Fund - Regular Plan (G)

11. Motilal Oswal Focused 25 Fund - Regular Plan (G)

12. SBI Focused Equity Fund (G)

Omkeshwar Singh: Too many funds, there is over diversification; consolidate in 4 to 6 schemes as under

Consolidate with 6, 8, 11 & 12 in the SIPs you are already doing -- may continue with 3 & 5

rahul prasad: I have started investing since nov 2020. Investment spread of 2 lac a month. Market is high but cannot time and hence looking for a long term horizon of 7 years. Is my strategy right?

1.Axis Blue chip

2.Axis Focussed 25

3.Canera Robeco Blue chip

4.Canera robeco emerging rquities fund

5.Parak Parek flexi fund

6.Mirae large cap

7.Motilal Nasdaq 100

8.Franklin US opportunities fund

9.PGIM India Geo Fund

10.Canara robeco flexi cap fund

11. Canara robeco small cap

12.DSP mid cap

13.UTI flexi Cap

14.SBI small cap

15. axis mid cap

16. ICICI tech fund

17. SBI banking fund

18.DSP healcare fund

19. kotak emerging equity fund

Omkeshwar Singh: Too many funds, overdiversification leads to underperformance of the portfolio; consolidate in 4 to 6 schemes as in: 2, 4, 8, 13, 14 & 15

Srikanth: Dear MF Guru, I hold the following MFs. 

Scheme Units Held Average Cost Price Value At Cost
SBI MAGNUM FLEXICAP FUND - REGULAR PLAN - GROWTH 215.597 46.93 10117.99
ADITYA BIRLA SUN LIFE EQUITY ADVANTAGE FUND - REGULAR GROWTH 466.957 450.23 210235.96
SBI BLUE CHIP FUND - REGULAR PLAN - GROWTH 895.387 27.92 25000.01
HDFC MID-CAP OPPORTUNITIES FUND - REGULAR PLAN - GROWTH 182.548 55.43 10117.98
LNT Infrastructure Fund - Regular Plan - Growth Option 10520.779 19.02 200118.01
LNT India Value Fund-Regular Plan-Growth Option 275.255 36.76 10118.01
HDFC BALANCE ADVANTAGE FUND - REGULAR PLAN - GROWTH 1027.545 182.77 187803.37

I would request you to advise as to whether to hold / sell (part / full) the above MFs.

Omkeshwar Singh: UTI Flexi Cap or PPFAS Flexi Cap are better options in Flexi cap category.

Continue with 2, 3, Axis Mid-Cap or DSP Mid-cap are better option; exit from sectoral and value funds and Union Balanced Advantage or TATA Balanced Advantage are better options.

Ravi Nanduri: I am 39, married and a two income household. I have the below portfolio with MF & ULIP. I am looking at increasing my SIP (currently 10k per month to 20k per month). Also I am looking to invest 2L lumpsum in March. Looking forward to your advice. All details as on 31 Jan 2021

1. Aditya Birla Sunlife Equity Hybrid 95 Fund 2k SIP - 258 Units @ 847 NAV

2. Aditya Birla Sunlife Focused Equity Fund: Lumpsum: 4L: 6724 Units@77NAV

3. Aditya Birla Sunlife Frontline equity Growth Direct: lumpsum 2L: 879units@280NAV

4. Aditya Birla Sunlife Frontline equity Growth Regular: SIP 5K 2217 units@261 NAV

5. Aditya Birla Sunlife banking & Financial services Growth Regular: SIP 3k 11788units@ 30 NAV

6 DSP Blackrock Midcap Direct growth: lumsum 1L 1740 Units @75 NAV

7. DSP Blackrock Small cap direct Growth: lumsum 1L 1886@74 NAV

8. DSP Blackrock Tax Saver direct Growth: lumsum 1L 2272@63 units 

Omkeshwar Singh: Please continue with 1, 6 & 8

Axis Focused - Growth or MOSL Focused 25 Growth is better option in Focused funds

Axis Bluechip – Growth or UTI Mastershare Growth are better large cap funds

Exit from sectoral funds

Axis Small Cap / Kotak Small Cap are better small cap options; even SBI Small Cap can be considered

Ashish Sharma: Pl suggest as i am investing in below MF from last 2 years as monthly SIP 1500rs each. Whether to continue or to replace or exit.

1) Axis Focused 25 Fund
2) L&T Midcap Fund
3) Mirae Asset Large Cap Fund
4) Axis Bluechip Fund
5) HDFC Top 100 Fund

Omkeshwar Singh: Please continue, presently changes not required

Himanshu Tandon: I am running the following SIPs every month. Please advise if I should continue with these and what additional MFs should I invest in. I want to increase the total SIPs by 10,000 per month.

IDFC Bond Fund Short Term Plan  Rs 6,000.00
IDFC Govt Sec Investment Plan  Rs 6,000.00
Parag Parikh FAS Flexi Cap Fund  Rs 3,000.00
Axis Focussed 25 fund  Rs 3,000.00
Princaipal Small Cap fund  Rs 3,000.00
DSP Quant Fund  Rs 3,000.00
Invesco Contra fund  Rs 3,500.00
SBI ESG Fund  Rs 3,500.00

Omkeshwar Singh: Please continue; most of the funds are decent presently; changes not required except for small cap category Axis Small Cap / Kotak Small Cap are better small cap options even SBI Small Cap can be considered.

Ashish B Mhaisekar: Presently I am investing an amount of Rs. 30000 p.m as SIP towards different MFs. The details are as under. I would request you to advice as to whether to book profit/ hold / switch / additional purchase in the above MFs.

Fund Name Monthly SIP Units as on date
  1. Invesco India Contra Fund – Growth
7000 2737.772
  1. SBI small Cap Fund – Regular Plan – Growth
4000 1319.390
  1. HDFC Midcap Opportunities fund – Growth Option
4000 2798.310
  1. Kotak Flexicap Fund - Growth
5000 6477.086
  1. Axis Focused 25 fund – regular Plan Growth Option
5000 7108.327
  1. ABSL Frontline Equity Fund – Growth
5000 523.163
  1. Tata Small cap fund – Regular plan – Growth (Lumpsum)
25000 (Lumpsum) 25000

Omkeshwar Singh: Please continue with 1, 2, 4, & 5

DSP Mid Cap and Axis Mid cap are better option

Axis Bluechip – Growth or UTI Master share- growth are better large cap funds

Axis Small Cap / Kotak Small Cap are better Small Cap options

munish shekhavat: I am doing Rs 15,000 SIPs every month in the below listed funds. Kindly advise if I should continue with these options? I plan to remain invested for at least next 10-15 years.

List of Funds:

Franklin - India Feeder Franklin US Opp (G):
Franklin - India Feeder Franklin US Opp (G)
Aditya Birla SL - Frontline Equity Fund Reg (G)
Mirae - Asset Large Cap Fund Reg (G)
Franklin - India Prima Fund (G)
SBI - Small Cap Fund Reg (G)
HDFC - Hybrid Equity Fund (G)

Omkeshwar Singh: Continue with 1,2,4,6 & 7

Axis Bluechip – Growth or UTI Master share- growth are better large cap funds

DSP Mid Cap and Axis Mid cap are better option

Shirish Kumar: I have recently started investing again into SIPs after 5 years, this is my current portfolio

Axis Bluechip Fund - 5000/month

PPFAS Flexi Cap- 5000/month

HDFC mid cap opportunities - 2000/month

UTI small Cap- 1000/month

Axis small Cap- 1000/month

Axis ESG - 1000/month

I am planning to invest 5000Rs more per month in SIPs which will be on 

Mirae asset emerging Bluechip- 2000-3000/month

Balanced advantage fund - either 1 or 2

Now I am confused which balanced advantage fund I should start from, my top two picks were HDFC and ICICI Pru Balanced Advantage funds. But after seeing your recommendations as Tata and Union balanced advantage fund I would like to understand how these two are better than HDFC or ICICI. If you could please suggest it will be great for me. I have been taking a lot of advices for balanced advantage fund but still did not get a satisfactory answer. Your suggestion with reasoning will end my search.

Also instead of going for 2 balanced advantage funds should I go for one balanced advantage and one Axis Midcap/Invesco Contra fund (both Axis Midcap and Invesco Contra fund are of different categories but I would like to choose one out of it).

I am currently 35 years old and my plan is to hold these MFs for 5-10 years. Will wait for your response.

Omkeshwar Singh: Please continue with existing ones; Mirae Emerging Bluechip has limit of Rs.2500 SIP per month; they are not taking more than that

In balanced advantage Union Balanced Advantage or TATA Balanced Advantage are better options; they are based upon the present quality of the portfolio i.e. the stocks and the debt instruments that these schemes are invested in as the returns are sun set of the quality of the portfolio and invested at proper margin of safety.

These are the 2 major consideration for determining the outcome of recommendations: Quality of portfolio of the scheme and once quality is ascertained, second major filter is margin of safety, i.e, if the scheme is fairly valued or undervalued or overvalued. This can only be done if the intrinsic value of each portfolio can be determined.

There are many other factors that also goes in determining, i.e., Turnover Ratio, Portfolio Risk, etc, however these two are the major ones.

To determine the quality of the portfolio and margin of safety over 20 million data points -- fundamental as well as technical -- along with relevant news / information are considered by RankMF proprietary research engine on DAILY basis and the outcome is quality of the instrument-- stocks or debt -- and the margin of safety of that stock and debt instrument.

These results are then mapped to the portfolio of the each and every scheme as each and every scheme has different portfolios and weightage of stocks / debt instrument in its portfolio.

The bottomline we check is:

  1. Funds Sahi Ya Nahi
  2. Investment time is reasonable or not

Please be informed that just great quality is not sufficient; quality at right price is most important to increase the chances of better risk adjusted returns!


RankMF Disclaimer: Investments in mutual funds are subject to market risks. Please read all scheme-related documents carefully before investing. Past performance is not an indicator of future returns.

Caution MF Equity oriented Investors: Please don't JUST look at one-year return; due to COVID-19 pandemic the market fell sharply in March 2020 because of which all returns may look unbelievably fantastic for a one-year period! Look for present quality of portfolio & margin of safety of the schemes! Happy informed investing!


If you want Mr Singh's advice on your mutual fund investments, please mail your questions to getahead@rediff.co.in with the subject line, 'Ask MF Guru', along with your name, and he will offer his unbiased views.

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.

OMKESHWAR SINGH