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Should I invest in debt funds for long term period

I am 34 years old NRI and have SIP investments of 5000 each in DSPBR Microcap, SBI Bluechip, Franklin India Flexicap, BSL Frontline Equity fund and ICICI Pru Value discovery fund. I want to invest lump sum funds on 2 equity funds for long term (more than 10 years, 2.5 lakhs each), Is Tata PE equity fund and L&T special situations fund an advisable fund for this investment? Also suggest a good debt fund in the current scenario to invest 2.5 lakhs for long term (more than 10years) or should I go with short term&Ultra short term investments?

Mar 23, 2017 by Manu Pillai, Cochin  |   Mutual Fund

You have invested in good performing mutual fund schemes across large cap, diversified and mid cap category of funds.

Instead of investing in TATA PE Equity Fund and L&T Special Situations Fund, you may add in your existing portfolio by investing additional amounts in SBI Bluechip Fund, BSL Frontline Equity Fund and ICICI Prudential Value Discovery Fund.

DSPBR Micro Cap fund is not accepting lump sum or SIPs for the time being, therefore, you will not be able to add in it.

For your long term investments in debt category, you may go for income funds and select the right funds from here https://www.advisorkhoj.com/mutual-funds...

The other idea could be to invest in balanced funds instead of investing in debts funds and equity funds separately. This is simply because the returns from balanced funds are tax free (long term capital gains as well as the dividends).

Therefore, you can invest 7.50 Lakhs in balanced funds instead of investing Rs 5.00 Lakhs in equity funds and 2.50 Lakhs in debt funds. Balanced funds invests approx. 65% in equities and rest in debt, therefore, it can take care of your investing needs in both the asset classes while making it tax efficient too!

Thanks for writing to us.

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