MF Query Board




As per the information provided by you, your current age is 55 years and we assume you are going to retire at the age of 60. Currently, you are investing Rs. 12,000 monthly via the SIP route and your asset allocation is as below.



On a broader asset class level, you have invested 83.33 per cent in equities and 16.67 per cent in debt. However, as you are nearing your retirement and assuming that you would have no income or low income after retirement, it is good to increase the debt portion and reduce the equity exposure. Even in equity, you are highly inclined towards the contra fund. However, it is better to allocate maximum to large-cap funds followed by mid-cap and small-cap funds. Assuming you are a moderate risk taker, it is recommended to increase the debt allocation to 60 per cent and reduce the equity allocation to 40 per cent. Before three years to retirement, i.e. at the age of 57, zero down your equity allocation and keep debt allocation to 100 per cent. This will help you to protect the principal amount invested, and with the help of rebalancing, it would also help you to protect the gains made in equities. However, the funds you are invested in are good funds among their categories. But as we are not aware of your risk appetite, saying that these funds are good for you will not be right. So, it is better to first assess your risk profile, and based on the profile, you need to make changes to your mutual fund portfolio. 



You have indeed taken a right step by making sure to start investing early in your life as it helps you to accumulate more over time. You have invested in large and mid cap fund, mid-cap fund and small-cap fund. Your only goal being wealth creation, tenure being 15 years and risk profile being moderate, replacing your large & mid-cap funds with the multi-cap fund would be a better idea. This is because over the long term period, multi-cap fund can provide you better risk-adjusted returns than large & mid-cap funds. As you move ahead in life and income increases, it would be better to invest in index fund as well. Finally, as you move near your goal, make sure that you shift the amount to debt fund as they are less volatile and would keep your corpus be safe. At this point in time, having a financial plan in place would be a better idea as it will not only help you with your investments, but it would also help you to manage cash flows in a way that will help you to end up with a better investible surplus.

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