Achieving Investment Goals | Value Research Investing for a goal requires a well-performing portfolio that needs to be regularly reviewed…
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Achieving Investment Goals

Investing for a goal requires a well-performing portfolio that needs to be regularly reviewed…

I am 29 years old and am investing in Fidelity Tax Advantage, HDFC Prudence and IDFC Imperial Equity through SIP approach. I can invest Rs 8,000 in addition to this every month. Please suggest funds that I can invest in; I wish to make these investments to accumulate Rs 1 crore in 20-25 years and Rs 15 lakh in ten years for my son.
- Monu K

Investing in equity mutual funds through systematic investment plans is the best way to achieve long-tem wealth creation. You have a monthly investible surplus of Rs 15,000 to achieve both your goals which are some years to go. You are being conservative with your goals; you can achieve both these goals with your investments if the portfolio ears an annualised 12 or 15 per cent. This should be possible with a mutual fund portfolio comprising good performing funds.

Goal  Corpus (Rs)  Years to goal  Monthly savings earning 12 per cent (Rs)  Monthly savings earning 15 per cent (Rs)
Son's education 15 lakh 10 4,350 3,600
Retirement 1 crore 25 5,300 3,100

You have selected good funds that offer you tax benefits as well as equity exposure. All the three funds selected by you are highly rated and have a performance track record which is impeccable. However, where it lacks currently is diversification which will help you achieve your financial goals. We suggest you add a large- and mid cap fund such as HDFC Top 200 and mid- and small-cap fund such as DSPBR Small and Mid Cap fund to your existing portfolio so that you get a well diversified portfolio across market cap and style.

A portfolio made of five funds is manageable and you should be able to monitor its progress easily at least once a year. Make sure you continue investing regularly and evaluate the portfolio performance as you approach your financial goals.

Schemes  Category  Rating  3-yrs ret (%)  5-yrs ret (%)
Fidelity Tax Advantage Tax Planning ***** 15.39 15.22
HDFC Prudence Hybrid: Equity-oriented ***** 18.82 17.43
IDFC Imperial Equity Large Cap **** 10.13 12.4
HDFC Top 200 Large & Mid Cap ***** 17.19 16.86
DSPBR Small and Mid Cap Reg Mid & Small Cap ***** 16.93 NA
Returns as on April 11, 2011 Ratings as on March 31, 2011

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