Ask ET Mutual Funds: How to invest to fund my annual holidays?

I am a 33 years old and planning to invest around Rs 30,000 per month in mutual funds. Currently, I am planning to invest Rs 5,000 in Birla Sunlife Top 100, Rs 5,000 in Birla Sunlife Midcap Fund, Rs 5,000 in Birla Sunlife Equity fund, Rs 5,000 in Mirae Asset Emerging Bluechip, Rs 5,000 in NPS Tier1 and Rs 5,000 in NPS Tier 2 (Aggressive scheme). My investment horizon is around five years or more for wealth build-up and NPS for pension.

I have a son who is two years old. I need to save money for enrolling him to a good school by this year end or next year. I have some FDs for this purpose, but I need advise to understand if there are some better options for this goal. Apart from this, I like to travel a lot, and will like to make at least one outstation holiday with my family every year (around Rs 50,000 covering all costs). Please advise if I am investing correctly in correct instruments to meet my goals.

--Rohan Bhattacharya


Nisreen Mamaji, Chief Planner at MoneyWorks Financial Advisors, responds:



In order to recap, your goals are

Wealth creation: 5 years

Retirement/pension: 25 years

Child’s education: 12 months (amount not specified)

Travel every year: Rs 50,000 per annum

Advice

1. Please extend the tenure for wealth creation and retirement goal, both to at least 25 years to coincide with your retirement age perhaps at 58 years. Asset allocation for these goals can be 50 per cent in diversified equity funds and 50 per cent in multi cap funds.

You can consider the following schemes for investment:

Diversified equity funds - Birla Sunlife Frontline Equity fund; DSP BlackRock Top 100; Kotak Select Focus

Multicap funds- Motilal Oswal Focused Multicap 35 Fund; Franklin India Flexicap fund; Franklin India Prima Plus fund

2. Child’s education: Your existing FDs could be utilized for this purpose since re-investment of FD would fetch you returns @ 6.5- 6.75 per cent only and 1-year tenure is too less for me to suggest a equity oriented balanced or equity fund which would not be taxed after 12 months. Fixed income funds would be taxable in 12 months therefore might not be a good suggestion either.

3.Travel: please start an SIP in an equity-oriented balanced fund like HDFC Prudence Fund or Birla Sun Life Balanced ’95 Fund which can be redeemed in 12 months after each installment to avoid exit loads or capital gains.


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