I am 32 years old and I am married with a baby girl (1.5 years). I have been investing in Mutual Funds (MFs) for the last four years and have made a very good return of over 25% in my overall portfolio. My goal is to retire early and be financially free by 2034-35. This is the break up of my portfolio: Nippon India Smallcap Fund- 5k, SBI Smallcap Fund- 5k, SBI Focused Fund- 5k, Axis Midcap Fund- 10k, Axis LT Equity Fund- 10k, PPFAS Flexicap Fund- 10k, Mirae Asset Emerging Bluechip Fund- 2.5k. Do you think this is the right mix of funds to achieve my goal and do I need to add an index fund (preferably UTI Nifty 200 Momentum 30 Index Fund) to my portfolio? I do not have any loan of any kind.
,Name withheld on request
Considering your current investment amount and monthly SIP rate, you can earn around . are aiming to obtain a fund of 2.5 crore in 13 years. It will be able to support you for 20 more years of livelihood 75,000 per month (in today’s money), assuming long-term inflation of 6% and a portfolio return of 12% annually. Apart from this, you also have to ensure that you can meet your daughter’s higher education needs in about 15 years. calculate using rough approximation 8 lakhs per annum (in today’s money), you would need an inflation adjusted corpus 75 lakhs over 13 years to support this goal. Consult a financial planner to understand these numbers properly and plan accordingly. Coming to your portfolio, you are mostly investing in broad-market diversified funds (flexicap, focused, tax saving). About 58% of your portfolio is held in such funds and the rest goes to mid and smallcap allocation. So, yes, you would do well to add an index fund to your portfolio. UTI Nifty Index Fund will fill this gap and also add a stable large-cap fund to the mix. Also, you may consider adding or replacing (a smallcap fund) with an overseas fund like Motilal Oswal S&P 500 Index Fund (as and when these funds open back for subscription).
Shrikant Meenakshi is the founder of PrimeInvestor.in.
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