EVALUATE MY PORTFOLIO

CHANGE THE DEFENSIVE MINDSET

Mr. Brahmananda wrote :
Thank you for your informative blog. It has been very useful to small investors like me.
sir,
please evaluate and guide my portfolio.
At present I am investing in
bank R/Ds 15,000p/m,
Mutual Fund investments
Reliance Regularsavings Equity 1,500/m;
Sundaram Select focus 1,500/m;
Kotak Opprtunities 2,000/m;
Reliance Diversified Power Sector fund 5,000/m and
BirlaMidcap Fund 5,000/m,
I have 3yrs old daughter and I like to invest 5,000/m into gold, should i go for Gold ETF or Postoffice gold purchase and my investment horizon is 10-15yrs and after that to consolidate all investments.
I have term insurance for 35L;
Critical Illness 10L;
Mediclaim 5L(Family floater);
my annual takehome salary is 8-9L and
I have a own house and no major liabilites as of now.
Please guide me.
Is my investments are suffice and whether I am in right track?


SRIKANTH SHANKAR MATRUBAI advised :
Dear Brahmananda,
Thankfully, you have got your own house and have no major liabilities. This is a major plus point in favour of your finances.
I wonder why you need to invest 15000 per month (nearly 50% of your investment amount) in Bank RD where the interest rate barely covers the Inflation and leaves you with very little actual gains. Since, you have no major liabilities, you can afford to be a bit balanced, if not aggressive. Your investment in Bank RD is too defensive. You can as well consider investing in Balanced Funds or even Diversified Equity Funds, especially since your investment horizon is 10-15 years.
I feel you need to add another Rs.10 Lakhs to your Insurance Cover and increase your overall Cover to about 45Lakhs. You can consider taking a Top-up to your existing Term Insurance.


You need to make only some minor adjustments in your portfolio for a better returns. Otherwise your Fund selection is quite good.
Reliance Regular Saving Equity - 1500pm - continue
sundaram Select Focus - 1500pm - Continue
Kotak Opportunities - 2000pm - Switch to Kotak K30 Fund
Reliance Diversified Power Sector Fund - 5000pm - Stop immediately and invest 2000pm in Reliance Growth Fund
and the balance 3000pm in HDFC Prudence Fund
Birla Midcap Fund - 5000pm - Stop immediately and split the 5000 and invest 2000pm in Birla sunlife Equtiy Fund and 3000pm in DSPBR Top 100 Equity Fund

so, your Mutual Fund Sip investment will be like this

Reliance Regular Saving Fund(Equity) - 1500pm
Sundaram Select Focus Fund - 1500pm
Kotak K30 Fund - 2000pm
Reliance Growth Fund - 2000pm
HDFC Prudence fund - 3000pm
Birla Sunlife Equity Fund - 2000pm
DSPBR Top 100 Equity Fund - 3000pm

This Portfolio has the right mix of Large Cap and Diversified Equity funds with a Balanced Fund to complete the picture.

Investing in Gold is never a good idea. Buy Gold only when you want to use and not for investment purposes. And with your investment horizon of 10-15years, Gold may not serve the purposes. You may as well consider investing in a Good Diversified Fund. Except for the last two years, most of the time Gold has managed to deliver returns on par with Inflation. However, you may take a small exposure to Gold through Gold ETFs or better still through UTI Wealth Builder Fund - series II. This Fund invests in a mix of asset of Equity and Gold in the ratio of 65:35 in favour of Equities. If your mindset is aggressive you can take a small exposure to Gold Mining Funds like the DSPBR World Gold and AIG World Gold Fund, which, beware, more volative than Gold ETFs.


Best of luck,
Srikanth Matrubai


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http://equityadvise.blogspot.com