B Gopkumar - 11 June 2018

Is it safe to invest money in Provident Fund (PF) through Voluntary Provident Fund (VPF), if the PF fund is managed by the company through a trust. If the company becomes bankrupt tomorrow, can the employees still get their money back?

Your money invested in PF is safe and secure. You will get back your PF money. PF trust is not employee-specific, but is governed by the Government of India. Having said that, instead of investing through VPF, one can also consider similar investment avenues like bonds, corporate fixed deposits (FDs), debt mutual funds etc to fetch higher returns.

I have Rs 10,000 systematic investment plans (SIPs) in the following schemes: Franklin India Smaller Companies Fund (G), L&T Infrastructure Fund (G), SBI Blue Chip Fund (G), HDFC Mid-Cap Opportunities Fund (G), Tata Equity P/E Fund (G), Parag Parikh Long Term Equity Fund Reg (G), Kotak Standard Multicap Fund (G) and Reliance Small Cap Fund (G). I want to shorten my portfolio. Please advice.

You may exit or stop your SIP from lesser known and small-size funds like Parag Parikh Long Term Equity Fund and L&T Infrastructure Fund. Looking at your risk appetite, you may consider realigning and rebalancing your portfolio by investing in large-cap funds. You could choose to increase exposure to any of the existing large-cap fund from your own portfolio.

With Long Term Capital Gains (LTCG) Tax returning on mutual fund /equity investments, is it a better option to go back to Unit Linked Insurance Plans (ULIPs)?

Investment in ULIPs has become attractive from a post-tax long-term returns point of view. But one can’t avoid mutual funds (MFs) as they are still attractive and are delivering returns. From a portfolio allocation point of view, one should consider equity MF portfolio, as it provides diversification, and more importantly, liquidity.

I have been investing in mutual funds through monthly SIPs for the past one-and-a-half years. They are all regular growth option plans: DSP BlackRock Small Cap Fund (Rs 2,000), Reliance Small Cap Fund (Rs 2,000), ICICI Pru Value Discovery Fund (Rs 3,000), ICICI Pru Equity & Debt Fund (Rs 5,000), HDFC Balanced Fund (Rs 5,000), ABSL Advantage Fund (Rs 3,000), Franklin India High Growth Companies Fund (Rs 5,000). I am 32 years old and can continue to invest for the next 20 years or more. My ultimate objective is to build a retirement corpus. I plan to increase my SIPs by 10 per cent every year. I consider myself to be a moderate to high risk investor. Is my portfolio good enough or should I change anything?

Looking at your age and risk appetite, you should further invest in small and mid-cap category of funds with proven track record and trusted fund houses like Reliance Small Cap Fund and Aditya Birla Sun Life Small Cap Fund. You can also increase exposure to your existing investments in large and mid-cap funds by increasing the investment amount in them through SIPs for better long-term returns. Looking at your risk profile, objective and investment horizon, you may stop or exit SIPs in debt and balanced funds.

I am 38 years old, married and have an eight-year-old daughter. I plan to invest about Rs 60,000 every month for my daughter's education and marriage, as well as, for my retirement. I've shortlisted HDFC Equity, HDFC Top 200 Fund, HDFC Mid-Cap Opportunities Fund and Sundaram Select Mid Cap Fund (the first two are large caps and the last two are mid-caps). I will need the money for my daughter's education after 10 years and for her marriage after 15 years. I plan to retire after 17 years. Please suggest a few funds and the amount I should invest in each of them.

Looking at your investment horizon and goals, especially from your daughter’s education and marriage perspective, you can invest in all the above select funds. You can even consider investing ICICI Prudential Bluechip Fund, Reliance Top 200 fund and ABSL Equity Fund in the large-cap space. From a retirement perspective, you should add more allocation to small and mid-cap funds. You should also consider Reliance Small Cap Fund and ABSL Small Cap Fund to boost higher returns in the long run.

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