A good mix of debt and equity mutual funds to build a portfolio

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I need help to build a mix of equity and debt mutual funds. I am 30 years old, planning to get married in 1-1.5 years. I do not have any loan or liabilities, except paying the rent and supporting my parents.

I can invest up to Rs 20,000-25,000 per month in mutual funds. I am currently investing Rs 4,000 in ELSS SIP schemes: Rs 2,000 in each Axis Long Term Equity Fund (Growth) and Aditya Birla Sun Life Tax Relief '96 Fund (Growth). Apart from that I am also investing Rs 5,000 in PPF for tax saving. I also have a corpus of Rs 2 lakh which I want to put in for emergencies. Please suggest a good mix of both debt and equity funds using both lumpsum and SIP modes. -
-Akash Deep

We ask our readers to follow a goal-based investment strategy. This automatically takes care of your asset allocation. For example, start with identifying your various financial goals, both short-term and long-term ones. As you know, you should always stick to bank deposits and debt mutual funds to take care of your short-term goals that need to be met before three-four years. For long-term goals of five years and above, you may consider investing in equity mutual funds, including aggressive hybrid schemes. Remember, it is equally important to choose schemes based on your investment horizon and risk profile.

  • 4.38%Annualized Return for 3 year
  • >3 years Suggested Investment Horizon
  • 3.8 YearsTime taken to double money
  • %Annualized Return for
  • Suggested Investment Horizon
  • N.ATime taken to double money
So, start identifying your goals, put a number to each goal, provide for inflation in the case of long-term goals. This will help you to calculate investments needed to reach your goals. For example, you want to go on a foreign holiday after five years. The current cost of the holiday is Rs 2 lakh. At 10% annual inflation, you would need Rs 3.22 lakh to go on holiday after five years. You need to invest around Rs 3,900 every month in an aggressive hybrid scheme to build a corpus of around Rs Rs 3.22 lakh at the end of five years.

Regarding your current portfolio, you may continue with your tax-saving mutual funds. If you are not extremely conservative, you may keep the PPF account alive by investing the minimum amount and invest the rest of the money in tax-saving mutual funds. You may consider parking your emergency fund in a mix of bank account and liquid fund. You may also consider investing in ultra short duration schemes.

If you are looking for a comprehensive financial plan, you may seek the help of a fee-only financial planner near you.


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