Building a portfolio through SIP

[abdriver2000]

How is the following selection of MF SIP?

HDFC Top 200 - 3000 pm
SBI Magnum Contra - 3000 pm
UTI Opportunities - 3000 pm
Reliance Growth - 3000 pm
HDFC Prudence - 2000 pm
Reliance Reg. Savings Balanced - 2000 pm

Total 16000 pm. All funds will be in div payout mode.

 

[nikrod]

Your Fund selection is excellent. all funds are 4-5 stars rated & total portfolio will be large cap biased with good mid cap exposure.

Just one suggestion, go for Growth option if your investment time horizon is more than 5 years & you do not require money in near future. This will go on to build your wealth more effectively than dividend option.

Alternatively if you feel necessity of dividend payout every year (Remember that MF dividends are not guaranteed), go for dividend option.

 

[magnet]

Which option is better to go for dividend pay out or dividend growth or dividend reinvest?

 

[nikrod]

Which option is better to go for dividend pay out or dividend growth or dividend reinvest?

According to current tax laws dividends on equity funds are completly tax free. Wherein no tax would be applicable for equity fund investments after 1 year of holding. This makes Growth & dividend reinvestment option of equity funds one and the same.

The choice between dividend & growth depends upon your needs. According to me if your investment is for long term than you should go for growth option.

 

[balachandran]

Re: Building a portfolio through SIP.

Good selection of funds, Mr. zedu

 

[nikrod]

You have selected good funds. However, you can replace any of low performing fund with Reliance Vision Fund.

You have selected Dividend Payout option. As you have just started the investment and it appears that you have sufficient current income. In this scenario you should have gone for Gorwth option. If you continue the SIP investments of Rs. 16000/-for 30 years, you will be able to build acorpus of Rs.90,052,320/ assuming a modest growth of 15%{Compounded Annual Growth Rate}. This will generate a monthly pension of about Rs. 4.00 lakh assuming that you will invest the corpus in Debt funds on retirement after 30 years of savings and the debt funds will generate an annual growth of 8%. In old age we recommend that we should keep our funds in debt funds as our risk taking capacity is reduced in old age and we need security of our savings.
I am a professional advisor and is specialised in Mutual Funds. If you are interested you can contact me for further guidance.

An informative advice Surinder. :thumb:

Just one addition. Even in old age, it it advised to keep small portion of your portfolio (Typically 20 to 30%) in equity to beat inflation. The 100% debt portfolio's post tax returns would not be able to cope with inflation.

 

[abdriver2000]

The reason for div payout mode is that I am a very conservative investor and would like to control my exposure to the equity markets. The dividends are usually invested in a FD.

 

[mfadhd]

Dear Surinder,

Wat will u suggest a kishan vikas patra/NSC or MIP for a preiod of 10yrs. investment amount 2Lacs.

hope to hear soon regards

 

[adinnhall]

I have investments worth Rs 22.05 lakh in mutual funds. Out of my total investments, 80 per cent is in RBI, PPF and Post Office schemes. The interest from the Post Office MIS scheme goes straight into an equity mutual fund SIP every month. I also have stock investments worth Rs 9.9 lakh. Currently, my total equity exposure is only 15-20 per cent, which I am trying to increase gradually. I am 33-year-old and my equity investment horizon is over 15 years.

 

[abdriver2000]

One thing I have noticed more on TJ than on any other forum is the 'Hijacking' of threads. If a member has a question, then ask, by all means. But do not post it in continuation to a non-related discussion.

On top of it, we have people advertising their services where none have been requested.

Mods: This discussion is going off topic. May I request your intervention.