POSTED BY March 21, 2011 1:01 pm COMMENTS (2)ON
I am salaried and have EPF with my employee. I am able to save around 5500 every month. All this money is going into equity based MF like HDFC Top 200,Franklin India Bluechip, Quantum LT. I have seen in many portfolio suggestions recommendation for adding a Debt Fund. Is it required to have debt fund when there is EPF and considering effectively 24% of onvce salary is going into it by default?
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2 replies on this article “Why a Debt MF in portfolio when there is EPF”
Dear Prabeesh, As a significant money is going to a tax friendly debt option EPF, no need to add one more debt option (Debt MF) right now. You may add once you are near your retirement (say age 55 or 57) to change asset class to suit your needs.
Debt MF, EPF and PPF are part of debt portfolio.
Since you are already having a sizeable amount of money going into the EPF, you need to consider the amount which you want to keep in debt portfolio, and accordingly invest / dont invest in debt fund.
My suggestion is you should keep away from debt funds as such, unless they are for temporarily parking your money so that you can switch them to equity funds, provided you have the skills to do that balancing.