POSTED BY April 22, 2013 2:59 pm COMMENTS (6)ON
Dear helpful experts (a rare breed),
I have a MF investment horizon of 20-25 years.
I wish to create a portfolio that requires minimum restructuring (once in 2-5 years).
I want to rebalance/restructure my existing MF portfolio ( approx 4 lakh) as per the above needs.
Q1 : I have chosen the following ratios
FT Blue chip : 25% Equity: Large Cap
HDFC Top 200 : 25% Equity: Large & Mid Cap
HDFC Prudence : 25% Hybrid: Equity-oriented
????????? : 25% * PLEASE SUGGEST*
My horizon is long so am going mainly with equity. I have not choosen Index funds as their returns are less than the above mentioned funds.
I have EPF, some PPF and some FDs so am not much bothered about debt right now.
(FDs are some goals expected in the next 1 year or so)
Q1b: I am thinking for going for DIRECT funds because i’ll be invested for long term and i want to save on the expense ratio part. I ‘ll stick with 3-4 funds so it won’t be a difficult portfolio to maintain. Any thoughts on going direct ?
Q2: I have to rebalance/restructure my existing MF portfolio which is worth ~ 4 lakh.
So the plan is to redeem all my existing MFs and invest lumpsun in Liquid funds and radually transfer this amount to the 3-4 equity MFs listed in point 1.
I was thinking of STP to Liquid funds (to escape exit load) with Dividend option (to escape short term capital gain). I am aware of the high Dividend Distribution Tax that liquid funds have. Should i worry about that affecting my returns or just go with Debt funds ? (I am in 20% tax bracket)
Any other instructions you may have for people considering rebalance/restructuring.
Q3: STP – For approximately 4 lakh to be transferred from debt liquid to equity MF with long term horizon, should I transfer this over 12 or 18 or 24 months. How should i decide ?
Any thing else to be kept in mind when rebalancing/restructuring my MF portfolio.