I am 40-years-old. I am investing in mutual funds since the last eight years. I am looking for long term investments for about 20+ years and my risk appetite is high. I want to accumulate Rs 6 crore plus for my retirement, daughter’s education and marriage, etc. Currently, I have invested Rs 26,000 and have been increasing it eight-10 per cent every year. I am investing Rs 1,500 per month in DSP BlackRock Equity Fund (G) and Rs 2,500 in Reliance Regular Savings Fund (G), since the last six years. I am not satisfied with the performance of my schemes in the last two-three years. Should I switch to Canara Robeco Emerging Equities Fund or any other better multicap fund?
I am also currently investing in other funds such as
Birla Sun Life Frontline Equity: Rs 6,000 pm
HDFC Equity Fund: Rs 45,000 pm
IDFC Premier Equity: Rs 4,000 pm
Franklin Templeton Prima Plus: 4,000 pm
ICICI Prudential Value Discovery Fund: Rs 4,000 pm
DSP BlackRock Equity Fund: Rs 15,000 pm
Reliance Regular Savings Fund: Rs 25,000 pm
Please suggest.
— Amit G Joshi
Abhay Shah, a certified financial planner, responds:
We believe that the banking sector may not perform well for the next three to four quarters due to stress of liquidity on global markets. Shifting your existing money to Canara Robecco Emerging Equity Fund may thus be a good decision.
While the DSP BR Equity Fund and Reliance Regular Savings Fund have banking sector exposure of more than 25 per cent, Canara Robeco Emerging Equities Fund’s exposure is only 13 per cent, which is good.
You are investing in seven different mutual fund schemes via systematic investment plans. We believe that one must only have maximum three to four schemes in their portfolio, as more diversification some time can kill returns. Therefore, in my opinion, you should have lesser number of schemes.
If you want to invest for a longterm, you may go for smallcap schemes such as HDFC Small Cap Fund. For your daughter’s education, you may go for multicap schemes such as Motilal Oswal Multicap 35 Fund.
For your daughter’s marriage, you may opt for ICICI Prudential FMCG Fund or DSP BR Natural Resources and New Energy Fund.
