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Chat Transcript

Harshvardhan Roongta

CFP , Roongta Securities

Financial Planning and Asset Allocation


Questions Answered


manjulaawake: Dear Sir, Would like to know better retirement solutions as I am going to retire. Thank You

Harshvardhan Roongta: When you are approaching retirement, you should start looking at products that offer you regular income from the capital that you invest. Safety of capital assumes priority. Regular income can be in the form of Interest on FD or bonds, rent from property or SWP from Mutual Fund investments. Do consider consulting a Financial Planner in person and seek detailed consultation. Remember you donot have any margin for errors at retirement. All the best for the new life.

guest: how should the portfolio % be balanced between large cap mid cap , small cap stocks

Harshvardhan Roongta: Large caps should form the core portion of your equity portfolio. Accordingly, you should allocate about 50% towards Large Cap. The balance 50% can be a mix of Mid-Small caps depending upon individual risk appetite and market knowledge. w.r.t Mutual Fund allocation, you may invest 30% in Multicaps and 20% in Mid Cap funds. My personal opinion is that you should avoid a dedicated small cap fund.

guest: Am 43 started investing in equity multi cap funds since 10 yes via sip. There was a substantial gain in my portfolio two months before, now the investment cost and gain is almost same. I dont need money for next 5 to 10 years. Is it better to redeem some portion and invest the same in bank FD? in that case I will lose the power of compounding. And also can I continue my existing sip so that I can purchase the units at low value in the current situation. Pls advise

Harshvardhan Roongta: Donot stop your SIP or redeem out of your existing investments looking at market levels. Since you donot need the money for next 5-10 years...simply continue with your SIP as it is.

guest: Iam investing in equity mf via sip since 8 yrs in 6 Multicap funds. I dont have any debt funds in my portfolio till now, apart bank fd and SSA ac as a fixed income. Now I want to rebalance my portfolio in equity funds as it has increased 2 my original allocation. Could you suggest me best and risk free debt fund where I can park the rebalance amount every time? And also could u suggest me among these amcs where I have equity mf sip currently existing, LT, Franklin Templeton, Quantum, IDFC, UTI, ICICI Pru AMC. Please share your opinion?

Harshvardhan Roongta: IDFC Short Term Fund & ICICI Pru Short Term Fund are good options in the debt category for you. You may invest in these.

guest: In the current situation is prudent to increase sips in equity multi cap funds. Your opinion pls

Harshvardhan Roongta: Yes, Mutlicap funds have the mandate to invest in any company irrespective of market capitalization. This mandate enables the fund manager to pick the best companies freely to generate returns. You may increase your SIP in Multicap Funds.

guest: My ELSS is out of lockin period, can i do STP to index fund. Is it advisable always to have a SIP followed by STP and viceversa

Harshvardhan Roongta: As a matter of process, you can do STP from your ELSS scheme into an Index Fund after the lock in period is over. However, I wouldnt recommend the same. You would be switching from one equity scheme to another in "installments". If you desire to be invested in Index Funds, then you should rather redeem out completely from ELSS and invest in Index Fund in one lumpsum. I dont see any merit in doing a STP in this case.

guest: How to do rebalancing of equity fund returns to fixed income, say I dont have debt mutual funds which I dont prefer. I have only Bank fixed deposits and Sukanya Samriddhi Account. I prefer SSA as it is tax free and provides more returns than fds, only thing is that I need to wait for long term. How often do we need to rebalance? Please share your opinion?

Harshvardhan Roongta: Re-balancing of portfolio should be done once a year at the earliest ..not before that. If you prefer to invest in SSA, then you would need to redeem the equity investments (in excess of the allocation) and then invest that in SSA. However, incase the equity valuation was to fall in the subsequent year, then as per the asset allocation re-balancing strategy you will need to increase the equity allocation, and since you have invested in SSA you will not be able to pump in that extra lumpsum in equity during the downturn. Hence, a debt mutual fund scheme would be better in your case to use as a product to help you do the Re-balancing.

guest: Dear Sir, For last 6 years I have been investing in 4 eq funds all in growth direct. ABSL eq fund, Mirae asset large cap, Motilal 35, sbi magnum multicap. each 25K per month. Total 1 lakh per month. will continue another 4 to 5 years. Are the funds and plan ok? Thanks and regards.

Harshvardhan Roongta: All the schemes are fine and i dont see a compulsive reason to make any changes right now. Do a review again after 1 year.

guest: which has ability to give more returns finally, want to invest for over 15 years period, investing in NPS TIER 2 (0.003% per annum) or direct mutual funds (2% expense ratio) or ETF/Index funds

Harshvardhan Roongta: Expense ratio is an important factor to look at while investing. However, other parameters of investing such as Liquidity, Taxability, Risks and returns potential are also to be considered. All the products enlisted by you are good and its very difficult to point out on any one in specific. Nevertheless, looking at the intent of your query and time horizon, i think ETF`s/Index funds would be most suitable for you.

guest: My age is 43 and am investing in 2 Multicap Funds via sip since 8 years they are LT Equity and IDFC Multicap fund for my retirement for another 17 years. Is two multi cap funds good for my goal. Pls comment

Harshvardhan Roongta: There would be better schemes in Multicap category such as Kotak Standard MultiCap and Axis Multicap fund. You may stop your SIP`s in the existing schemes and start afresh in the 2 schemes as suggested by me. The money already invested in L&T & IDFC may be left in those schemes itself and review the same after 1 year.

guest: I am planned to invest monthly 3000 only in equity for long term , I have to limit my share count or every month I can buy different companies holding less value is advisable I have to limit no of shares

Harshvardhan Roongta: With a monthly investment of Rs. 3,000 doing a SIP in shares will not be advisable as the quantity of shares bought will be minuscule. Better to do a SIP in Equity Mutual Fund scheme. You will get a basket of 30-40 companies with as little as Rs. 1,000 per month. If you still wish to invest in Shares then i would suggest that you shortlist just one company and buy those shares every month rather than buying shares of different companies every month. (I hope i have answered you query)

guest: Where rhe market will go here?

Harshvardhan Roongta: I wish i knew :-)
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