The right fund for sunset years

Mutual fund investors often wonder how many and what type of funds they should buy. ET Wealth presents five fund portfolios to suit different sets of investors. These portfolios have been designed by Value Research for our television channel ET Now. Every week, we analyse one portfolio in detail and provide an update on the rest. Go ahead and choose the portfolio that best suits your needs.

I want regular income Fund

Fund value Rs 10,77,137
Annualised return 11.57%

This portfolio is designed for retirees looking for a regular income from their investments. Unlike the other portfolios that invest in monthly instalments, this one withdraws Rs 20,000 every quarter from each of the four funds.

The portfolio has given an annualised return of 11.57%, which shows that unlike the other portfolios, it has been practically untouched by the recent market downturn.

The portfolio will be especially useful for those who have already exhausted the limit of Rs 15 lakh investment in the Senior Citizens’ Saving Scheme. Since this portion of your retirement corpus is invested in fixed income, you need exposure to equity to protect you from inflation.

The investment has been divided equally across four funds. The first is the Franklin Templeton Dynamic PE Ratio Fund of Funds. This gives the portfolio a diversified equity allocation with lower risk. The fund invests 40% in the units of Franklin India Bluechip and Templeton India Income. Both are high-performing equity funds.

The two monthly income funds—HDFC Long-Term MIP and Reliance MIP—have been picked for their modest equity allocation so that they give returns higher than those from fixed income.

The two have been top performers in their category and have given annualised returns of about 12%. Each invests nearly 20% in equities.

Finally, the inclusion of a balanced fund offers a stronger equity allocation. This fund invests a maximum of 70% in equity, taking the total equity allocation in this portfolio to about 40%.