A portfolio diversified across asset classes, and AMCs can fetch good returns
Premium- It is also important to keep reviewing your portfolio at least once in a year
NEW DELHI : I am a retired state government employee receiving a pension about ₹1 lakh per month. Besides I have made bank fixed deposits for about ₹60 lakh, ₹10 lakh in public provident fund account, ₹5 lakh in mutual funds and about ₹15 lakh in a bank savings account. I will complete the age of 65 this year. What will be a better investment option for me to get higher benefits with less income tax?
—Dr S.S. Dixit
Investment is a function of various factors that include your risk appetite, investment horizon, return expectation, regular cash flow needs and whether the investment is attached to any financial goal. Since you have not mentioned any of them, we are assuming that you are just looking for capital appreciation with a possible minimum tax liability. You can consider some options among senior citizen savings schemes (SCSS), Pradhan Mantri Vaya Vandana Yojana (PMVVY), National Savings Certificate, or debt-oriented mutual funds that will have the indexation benefit once you complete three years' holding period. Meanwhile, you may stay invested with your existing PPF account, subject to terms and condition of the product.
I have my investments mostly in fixed deposits and in an extra flat. I have never invested in SIP (systematic investment plan) mutual funds as I could never decide which ones to go with. I am 53 and have ₹30 lakh that I can invest (keeping aside funds for emergencies). I can take risks in this investment for higher returns. What should I do to achieve this goal?
—Kanish Srivastava
Considering your risk appetite as aggressive, you may create a portfolio comprising equity- and hybrid-oriented mutual funds. Since you have the surplus to invest, you may opt for 12 months STP (systematic transfer plan) route for investing in pure equity-oriented funds while hybrid investment can be done through lump sum. After keeping at least 10% aside as emergency funds, the remaining ₹27 lakh can be distributed between equity and hybrid funds in 70:30 ratio, respectively. Parag Parikh Flexi Cap, UTI Flexi Cap, Canara Robeco Emerging Equity Fund, Mirae Asset Mid Cap Fund, Kotak Small Cap Fund & IDFC Sterling Value Fund in the equity category, and Aditya Birla Sun Life Balanced Advantage Fund, ICICI Prudential Asset Allocator FoF & DSP Dynamic Asset Allocation Fund in hybrid category can be considered. This way your portfolio will be diversified across asset class, category, scheme and asset management company. It is also advisable to keep reviewing your portfolio at least once in a year.
Sanjiv Bajaj, Joint Chairman and MD, Bajaj Capital. Queries and views at mintmoney@livemint.com
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