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I want to invest Rs 35000 month for my future financial goals

I want to invest Rs 35000/ month for the following goals:- 1. Child Graduation (18 years) - 5000, 2. Child Post Graduation (22 years) - 10000, 3. Child Marriage (26 years) - 5000, 4. Retirement (31 years) - 15000. I have EPF as my debt component & also some exposure in PPF, so I want any other debt exposure. How should I create my Equity portfolio and in which Equity funds should I invest (with less portfolio overlap & better diversification between market cap)? Presently I am investing as:- 1. Axis Long Term Equity - 5000, 2. Franklin Tax Shield - 5000, 3. Birla SL Frontline Equity - 5000, 4. Franklin India Flexi Cap - 5000, 5. HDFC Equity - 5000, 6. Franklin India Smaller Co - 5000, 7. DSPBR Micro Cap - 5000. Kindly review my MF investment & suggest for any changes if required. Else guide me to create a ideal MF Portfolio for Long Term?

Mar 14, 2016 by Jitendra N Ghosh, Kolkata  |   Mutual Fund

You have given a lot of thought to your long term financial goals and the financial plan to achieve those goals. Through proper financial planning you can win more than half of the battle. The other half of the battle, is simply about remaining disciplined about savings and investment. We encourage you to use our Goal Setting calculator to see if you have allocated sufficient investments to each of these goals. All the financial goals mentioned by you are long term and therefore equity is the right asset class for you.

All the funds selected by you are top performing funds, with the exception of HDFC Equity Fund, which has been lagging behind its top performing peers in the recent past. But if you look at the 20 year track record of HDFC Equity Fund, it has created substantial wealth for its investors. The fund has the largest AUM base among all equity mutual fund schemes in India. The fund manager is one of the most respected fund managers in the country. Therefore, there is reason to believe that the fund will turn around in terms of relative performance versus its peers. However, you should monitor the performance of this fund relative to its peers very closely and take appropriate actions if the relative performance does not improve over a reasonable period of time.

Your fund selection criteria is very sound. Out of the 7 funds in your portfolio, 2 are ELSS funds, one is a large cap fund, 2 are diversified equity fund and 2 are small / midcap funds. This represents a good distribution over different market cap segments. You should monitor the performance of your portfolio on an ongoing basis and make appropriate adjustments if required. Also as your income increases, you should increase your SIP amounts and this will help you counter inflation in the long term.

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