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Targeting 20 Years

Pradeep Patel wants to build an investment corpus & asks us to review his portfolio to see if he's on the right track

I am 34 years old and I want to build a retirement corpus of Rs 1.25 crore by the time I reach 60. I also want to build a corpus of Rs 50 lakh for my son when he attains the age of 27, which is 20 years away. Could you please suggest a portfolio to meet these goals?
-Pradeep Patel

Goals
- Build a retirement corpus Amount: Rs 1.25 crore
Time frame: 26 years
- Build a corpus for his son Amount: Rs 50 lakh
Time frame: 20 years

Current Portfolio Overview
- Too much clutter (29 funds)
- High exposure to one sector: Financial Services (22.22%)
- A high tilt towards mid- and small-cap stocks (49.38%)
- Too many sector/ theme-based funds (44%)
- High allocation to tax saving funds (20%)

Steps to achieving goals
- Opt for less clutter, there is no need to have too many funds
- Avoid over dependence on thematic and sector funds
- Have clear goals with a time frame and a targeted amount
- Have separate portfolios for different goals
- Stick with a systematic investment strategy

Corpus for Child
Investment: Rs 6,000 every month via a SIP
Time frame: 20 years
- The portfolio should have around 2-3 funds
- All the holdings can be diversified equity funds
- Since the Principal Child Benefit SS Career Builder is a hybrid scheme that has maintained an average 23 per cent allocation to debt since launch, there is no need to include a separate debt scheme

At the end of the period, you can expect a corpus of Rs 48 lakh if we consider a compounded return of 10 per cent, per annum.



Suggested Portfolio
Funds  SIPs (Rs)
Principal Child Benefit Career Builder 3000
Kotak 30 3000

Retirement Corpus
Investment: Rs 11,500 every month via a SIP
Time frame: 26 years
- The portfolio should have a maximum of 5 funds
- Core holdings should be in large-cap diversified equity funds
- The top holding can be a large-cap oriented tax saving fund
- Ensure that you have a debt allocation too to protect the downside in a fall
- Maintain the equity:debt allocation by rebalancing your portfolio once a year

At the end of the period, you can expect a corpus of Rs 1.76 crore if we consider a compounded return of 10 per cent, per annum.



Suggested Portfolio
Funds  SIPs (Rs)
Magnum Taxgain 3000
DSPBR Equity 3000
Reliance Regular Savings Equity 3000
Tata Infrastructure 1000
Kotak Flexi Debt 1500