Investment Strategies: Modeling A Retirement Portfolio

by Vinaya HS on September 2, 2010

in Finance

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If you have Rs 20,000 to invest each month towards building a retirement corpus, how does this portfolio sound for a retirement that’s twenty years away?

  1. Rs 10,000 in HDFC Top 200 Fund (Growth)
  2. Rs 5,000 in HDFC Prudence Fund (Growth)
  3. Rs 5,000 in HDFC Monthly Income Plan Long Term Plan (Growth)

What changes would you suggest?

Note: There is an overlap in the equity-investing style between the HDFC Top 200 Fund and the HDFC Monthly Income Plan Long Term Plan since both invest in large-cap growth stocks.




Thanks for reading this article. I'd love to hear your opinion. Please use the comments section below to share your thoughts. I frequently write new articles that also cover several other aspects of personal finance including credit cards, financial goals, health insurance, income tax, life insurance, mutual funds, retirement planning, and much more. You can Subscribe through Email and receive new articles directly in your Inbox or you can Subscribe through the RSS Feed and receive new articles in your feed reader.

{ 10 comments… read them below or add one }

pattu September 2, 2010 at 7:08 AM

I am using fund 1 and 2 for my child’s education corpus. Obviously these are good funds as of now with good history. They would need a look-in every year or so. A CFP would say you putting all your eggs in HDFC. You spoke about deposit insurance so you should know the risk!

I like the large cap tilt. Its pretty risky to have small-caps. A big crash can decrease your corpus significantly

For my retirement I use NPS (mandatory in my case) +PPF +MFs with not more than 35-40% in equity. Could take a little more risk but NPS with 85% debt (mandatory)
prevent this as of now!

Fund 3 beats PPF quite well, but what you do with the monthly income? reinvest it in the same fund?

Vinaya H S September 2, 2010 at 8:59 AM

@pattu:

Have you read this article — “What is Prashant Jain’s Secret?”?

I included #3 in order to bring in a debt component and this fund is one of the top performers in its category. Since it’s a retirement portfolio, I chose the Growth option which would reinvest any earnings.

pattu September 2, 2010 at 10:26 AM

I have read the article and am aware of Mr. Jains exploits. The point is there is no gaurantee he would he remain in HDFC or reproduce his success. Besides like us all he is a mortal!
Hence the point about all eggs in one basket.

Vinaya H S September 2, 2010 at 10:50 AM

Yeah. But it’s an interesting time for these funds as they swell in size. Like you correctly pointed out, it’s indeed a good idea to regularly review your portfolio.

Vinay September 3, 2010 at 12:04 AM

Vinaya- HDFC Equity would be good fund to look at. IDFC premier, DSP Black rock top 100. Nevertheless HDFC top 200 too a good fund.
What you can do invest 5k in HDFC top 200 and balance another fund.

I have the same portfolio with couple more toppings :)

I still owe you a call :) and you have made in ways as wht I had planned to tell u on the phone!

Vinay September 3, 2010 at 12:08 AM

I agree with pattu too. Vinaya you need to invest other fund houses too:

HDFC
IDFC
DSP
ICICI Infrastructure Fund

Vinaya H S September 3, 2010 at 10:33 AM

One issue with DSP Blackrock is that they do not yet offer an online mechanism for investing.

Ajay September 3, 2010 at 3:39 PM

Vinaya, looks like the Gods have listened to you about DSPBR… They are offering online now :)

http://www.dspblackrock.com/mfonline/faq_getting_started.asp

Vinaya H S September 3, 2010 at 5:28 PM

Wow!

Thanks a ton, Ajay. :-)

Ashok July 19, 2011 at 6:30 PM

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