Please suggest how to divide savings in PPF, SIP and ELSS

Moumita Dasgupta 1
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Hi Pankaj,

I am Moumita Dasgupta, age 28, married and investing since last 3 years. I am looking for a lump-sum money after 5 years. My monthly income is Rs. 31000/- and I am currently investing Rs. 8500/- every month in Mutual Funds through SIP and PPF. Given below is the list of all of my investment :

PPF - 500/- Reliance Growth Fund - 1000/- (since 2008) SBI MSFU - Contra Growth - 1000/- (since 2008) HDFC Top 200 - 1000/- (since 2008) Reliance Regular Saving Fund - Equity Plan - 1000/- (since 2009) Reliance Gold Plan - 1000/- (since 2010) ICICI Prudential - Discovery Growth Fund - 1000/- (since last month) HDFC Tax Saver - 1000/- (since last month) Canara Robeco equity Tax Saver - 1000/- (since last month)

Please suggest if it is fine or should I add or cut any of them. Looking forward to your valuable reply.

Thanks & regards,

Moumita Dasgupta

savings
1 Answers

Most of the funds selected by you are good, but some corrections are needed to match your requirements.

As your investment horizon is five years only, we would request you to add less riskier funds in your portfolio.

HDFC Top 200 comes under Large & Mid Cap category and its a good fund. Stay invested in this.

PPF investment is good and keep investing in same.

SBI MSFU - Contra Growth and Reliance Regular Saving Fund - Equity Plan are multi cap. There is no need to have two funds from same category. You should considering stopping SIP in SBI MSFU Contra and instead invest into a Large cap fund like DSPBR Top 100 equity, Franklin India Bluechip and ICICI Pru top 100.

Reliance growth fund and ICICI Prudential - Discovery Growth Fund are mid and small cap funds and are riskier. Reduce your investment in these funds. Keep only ICICI Prudential - Discovery Growth and switch from Reliance growth fund to a debt based fund like Birla Sun Life Monthly Income Plan II - Savings 5 Plan - Growth, Reliance MIP or HDFC Children's Gift.

Regarding Reliance Gold Plan, HDFC Tax Saver and Canara Robeco equity Tax Saver, you may continue investing in them. But don't forget to stop investment in Tax saving funds after March 2012 as there won't be any tax benefit once direct tax code comes into play.

Having said all these, I would also suggest to increase your investment horizon to more than five years if you want to get good returns from equity based funds. But if there is need of money within these five years, I would advise your to decrease your investments in equities and rather focus of adding debt and fixed returns based assets.

Pankaj Batra5212
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