My mutual fund portfolio is not giving a satisfactory return. What should I do?
Dhirendra Kumar reviews the mutual fund portfolio of a 64-year old
May 29, 2019
Last year, on June 26, I invested Rs 5 million as per the advice of a wealth management company. They have put Rs 3 million in L&T Hybrid Equity and Rs 2 million in Reliance Large Cap. The Reliance fund is doing fine but the L&T one is marginally on the negative side. I am a bit worried, as this is the only money I have. I am 64 years old but currently, not dependent on this amount for regular income. What should I do?
You have Rs 50 lakh (5 million) invested in two funds. You have been lucky with Reliance Large Cap. Incidentally, this fund has done well because large caps have done well in the last one year. For someone like you, it is good to make investments in a fairly conservative way. Of course, you don't have any income requirement now, which is quite a consolation. But had there been an income requirement, this portfolio would have been very dangerous.
L&T Hybrid Equity is a conservative fund. In three to four years' time, it should be able to beat your fixed deposit return in a more tax-efficient manner. But on a daily basis, it will give anxiety, which you are facing right now. Ideally, this money should have been spread over a period of time. 50 lakh rupees should not have been invested at one go. I don't know what's the basis of selecting the large-cap fund, but I think you should have opted for a balanced fund only. Be more conservative. Watching this portfolio on a day-to-day basis may give you a lot of anxiety.