At present, I have a SIP of Rs 1,000 in SBI Bluechip Fund, Rs 15 lakh in Senior Citizen Savings Scheme (SCSS), Rs 10 lakh in SBI Equity Hybrid Fund Reg (G) (erstwhile, SBI Magnum Balanced Fund) from which I’ve done SWP of Rs 45,000 quarterly to generate regular income. My requirement is to create a monthly income of Rs 30,000 to 35,000.
I have Rs 30 lakh to invest, out of which I would want to use Rs 14 lakh to generate quarterly/half yearly income through SWP, and, Rs 16 lakh to invest for a horizon of five years.
I am planning to invest Rs 7 lakh each in HDFC Hybrid Equity Fund and ICICI Prudential Equity & Debt Fund. My questions are:
1. Kindly evaluate my portfolio, and let me know if any changes are needed.
2. Please suggest me some appropriate funds to invest Rs 16 lakh for a horizon of 5 years. My aim is wealth creation.
3. Kindly suggest some schemes for SIP for the amount remaining from the SWP/Interest from SCSS after all monthly expenses.
I am writing on behalf of my father.
— Sayantan Ghosh
Dinesh Rohira, founder and CEO, 5nance.com, responds:
We appreciate the detailed analysis of requirement and effort taken in building your existing portfolio. Surely, SWP is most effective way to generate regular income which many investors tend to forgo. Both SBI Bluechip Fund and SBI Equity Hybrid fund are quality schemes in their respective category and hence, looking at your risk profile we will recommend you to continue with same.
Moving to your questions,
1. For your requirement to invest Rs 14 lakh to generate regular income through , for SWP we will recommend you to take a blend of hybrid fund and conservative largecap fund as you have a decent period in hand. We will recommend you SBI Bluechip Fund (G) and ICICI Prudential Equity & Debt Fund (G) with Rs 7 lakh each.
2. For your Rs 16 lakh investment, we will recommend you to invest in a blend of short-term debt fund and quality diversified equity fund. Further, follow a staggered approach when investing in equity funds. We recommend the following schemes:
HDFC Short Term Debt Fund (G) – 40 per cent
ICICI Prudential Bluechip Fund (G) – 35 per cent
Mirae Asset India Equity Fund (G) – 25 per cent
3. Lastly for your investment through SIP, we will recommend you to invest in existing recommended schemes only depending upon the duration. This will help to minimize the number of schemes in your portfolio which will also help you to evaluate and track more efficiently.