Is this a good portfolio?

POSTED BY sreedhar raj ON April 12, 2011 12:07 pm COMMENTS (2)

Hi experts,

              Please suggest your views and changes(if any) to the following portfolio for my friend, a 30 year old person, who wants to retire with 3 crores in 15 years. His risk appetite is medium. He is willing to invest Rs. 15,000/- every month. He can invest in both equity and debt in the ratio 60:40 . He prefers having 5-8% in gold. As he does not have the time (and expertise) to do portfolio rebalancing, he prefers balanced funds. He already has two SIPs in HDFC Top 200(Rs.1000/- p.m) and UTI Opportunities(Rs.500/- p.m), the present market value of which is Rs. 21,000/-. He has shortlisted the following funds:

1) HDFC Prudence – Rs. 3500/- p.m (New SIP)

2) Reliance RSF Balanced – Rs. 3500/- p.m (New SIP)

3) DSP BR Balanced – Rs. 3000/- p.m (New SIP)

4) Birla Sun Life 95 Balanced -Rs. 2500/- p.m (New SIP)

5) Relaince GOld Savings Fund – Rs. 1000/- p.m (New SIP)

6) HDFC Top 200 – Rs. 1000/- p.m (Existing SIP)

7) UTI Opportunities -Rs. 500/- p.m (Existing SIP)

                                   Is this a suitable portfolio for him? Any changes required? 

Regards,

Sreedhar

2 replies on this article “Is this a good portfolio?”

  1. Ramesh says:
    April 12, 2011 at 1:36 pm

    @sreedhar,

    your friend cannot “eat the cake and have it too.”

    For a 3 cr portfolio at the end of 15 years, requires a lot of investment.
    Using passive investment style, he needs a more equity-oriented portfolio with zero gold exposure.

    1. use 2-3 diversified equity schemes.
    2. @12% per annum return, investing 4 lakh in first year and then increasing yearly investments @10% per year will take the corpus to near 3 crores.

    15k per month is not going to cut it in a reasonable world. (for getting that to 3 crores, you need 30% per annum compounded.) otherwise, the end corpus is going to fall short severely. In that sense (not getting the amount you want), your friend is taking a huge risk.

    Reply
  2. Manikaran Singal says:
    April 12, 2011 at 1:23 pm

    Mr Sreedhar,
    The current amount of savings may not be enough for the generation of 3 crore corpus as required. By assuming return on balanced fund to be 12% p.a and on Gold fund 7% p.a, your current investment profile will lead you to around Rs 74 lakhs. You need to increase the savings amount to atleast 60k p.m to reach the goal .
    2 suggestion..reduce the number of balanced funds to 2 ,cancel UTI opportunities SIP and increase HDFC top 200 with Rs 500/-

    Reply

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