I plan to begin a 3rd SIP of Rs 10,000 a month. I’ve one in a big cap and one in a flexi cap. Please counsel.
—Ritesh Diwedi
Diversification is a vital facet to have a look at whereas constructing your portfolio, because it cushions the portfolio towards any hostile actions, since completely different asset courses and even securities inside an asset class reply in a different way to the identical set of financial drivers. Hence, observe an asset allocation-based strategy (mixture of fairness, debt, gold). Currently, each of your SIPs are into fairness funds. You can look to construct some allocation to a fixed-income (Rs 5000 month-to-month) and to a global fairness fund (Rs 5000). The worldwide fairness allocation provides diversification throughout geographies and acts as a hedge towards rupee depreciation. For fastened earnings, you possibly can think about investing into Kotak Bond fund (Rs 2500) and Nippon India Banking & PSU debt fund (Rs 2500). For allocation to worldwide funds, you possibly can think about allocation to NAVI US Total Market FoF, given SEBI-imposed restrictions in place at present on funds investing abroad (besides abroad ETFs).
Should I redeem some cash yearly to keep away from paying long run capital features if I redeem after a few years?
—Avinash Kumar
Capital features on equity-orient-ed funds held for multiple yr are termed as long-term features and taxed at 10% on features in extra of Rs 1lakh each year. The exemption on capital features on the primary Rs 1 lakh quantities to solely Rs 10,000 (excluding cess and surcharge). However, to assert this profit the market-value redeemed must be topic to market threat, i.e., threat of hostile market motion between the exit and re-entry date which might be ~3-days aside given the T+3 redemption for fairness funds. If markets rise sharply between the exit and re-entry dates, then you possibly can be impacted adversely because the loss from lacking out on this appreciation may be larger than the advantage of Rs 10,000 derived for the fiscal yr. Hence, keep invested and don’t attempt to churn your portfolio given the market dangers.
The author is director, Investment Advisory, Morningstar Investment Adviser (India). Send your queries to [email protected]
Source: www.financialexpress.com”