I am 33 years old, married and have a net salary of ₹90,000 per month. I invest in mutual funds (MFs) through a systematic investment plan (SIP) and my total contribution to this is ₹20,000 per month. I have recently made some changes to my portfolio.
My current SIPs include ₹5,000 each in Axis Bluechip (switched from ABSL Frontline Equity), PGIM India Midcap Opportunities (a new SIP), Canara Robeco Emerging Equity (investing for the last three years), ₹3,000 in Mirae Asset Emerging Bluechip (investing for the last three years) and ₹2,000 in Axis Smallcap (new SIP, after switching from L&T Midcap).
I have also invested a lump sum in MFs, shares and fixed deposits. As for NPS, my contribution (and that of my employer) is ₹18,000 per month. I do not have any debt and my target is wealth creation. I have a term plan of ₹1.5 crore and a health plan of ₹10 lakh. My risk appetite is high and I have long-term targets. Please advise on my investments.
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—Name withheld on request
With a long-term investment horizon and a high risk appetite, your portfolio seems like a good fit. You are investing a quarter of your funds in a large-cap fund, 40% in funds that blend large and mid-cap funds, and the remaining 35% in mid- and small-cap funds. This is a fairly aggressive allocation – all equity, for one, and second, about half of the money in riskier market segments. However, you have debt investments, some as fixed deposits, and more in the form of debt allocation in your NPS plan. Overall, this is a good investment mix for your age, risk tolerance, and time frame — more investments in equity balanced by some safe haven investments in the low-risk debt market.
Being debt-free and having insurance plans are also good indicators of sound financial planning. The fund choices in your portfolio are fine. The mid- and small-cap funds require closer monitoring than the rest of your portfolio.
Srikanth Meenakshi is a co-founder at PrimeInvestor.
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