In a quest for clarity amidst the retirement planning maze, Gururaj, a 50-year-old investor brimming with aspirations, seeks to grow the portfolio so that he can have a comfortable retirement corpus.
Currently, Gururaj is investing close to Rs 1.1 lakh every month as monthly SIP and his total portfolio is valued at Rs 1.3 cr.
ET Mutual Funds spoke to Alekh Yadav, Head of Investment Products at Sanctum Wealth on how Gururaj can build his portfolio effectively and beat inflation.
Gururaj’s query, coupled with Alekh’s expertise, illuminates the path towards long-term financial resilience.
Query from Gururaj to ET Mutual Funds:
Portfolio Overview –
I’ve been investing through SIP, allocating Rs 1.1 lakh per month across the following mutual funds, alongside contributions to NPS (Rs 20,000/month) and EPF (Rs 5,000/month).
Additionally, I’ve invested approximately Rs 8 lakhs in HDFC Hybrid Equity, Rs 6.5 lakhs in ICICI Pru Dynamic Bond, Rs 10 lakhs in fixed deposits, and Rs 21 lakhs in EPF/PPF.
Presently, my total portfolio is valued at around Rs 1.3 crore.
Mutual fund monthly allocations:
Mirae Asset Large & Midcap Fund (Earlier known as Mirae Asset Emerging Bluechip Fund): 25,000/month
ICICI Prudential Bluechip Fund: Rs 20,000/month
Mirae Asset Large Cap Fund: Rs 10,000/month
Kotak Flexi Cap Fund (Earlier known as Kotak Standard Multicap Fund): Rs 10,000/month
Parag Parikh Flexi Cap Fund: Rs 25,000/month
Quant Multi-Asset Fund: Rs 20,000/month
Gururaj: I’m currently 50 years old and intend to invest for at least the next 10 years. Could you advise if my fund selection is appropriate?
Alekh Yadav: We refrain from providing specific fund recommendations without a thorough understanding of the client’s profile and requirements. Generally, the current fund selection appears appropriate.
However, there are a couple of suggestions to consider: 1) incorporating large-cap exposure through index funds or smart beta funds, and 2) allocating to a few dedicated mid or small-cap funds. The ultimate choice and allocation of funds will depend on the individual client’s profile.
Gururaj: Also, I’d like to know if my portfolio is sufficient to build a corpus by the year 2035?
Alekh Yadav: Assuming a SIP of Rs 1.1 lakhs over the next 11 years, the investor could potentially accumulate around Rs 3 crores with a 12% p.a. return.
Additionally, the current portfolio of Rs 1.3 crore may grow to approximately Rs 4.5 crore over the same period, again assuming a 12% p.a. return.
Consequently, the total potential accumulation by 2035 could be close to Rs 7.5 crore. However, whether this corpus is sufficient depends on the investor’s current expenses and the anticipated growth of these expenses over the next 11 years.
Roughly estimating, the portfolio should ideally cover around Rs 3 lakh per month of expenses in present value (factoring in assumed inflation of 5%), while still allowing for the corpus to grow at a rate close to inflation.
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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
