Publication details: Investor’s Guide – ET Now – 28-07-2016

Responses, opinion and view from Kartik Jhaveri

Question sent by Mr. Krishnan:-

I am an NRI and 30 years of age. I have invested Rs. 25 lakhs in NRE FDs and pay a premium of Rs. 20,000 every month for BAJAJ Allianz Future Gain ULIP. I also invest Rs. 1.5 lakhs in Sukanya Samriddhi Yojana every year.

I want to invest around Rs. 70,000 per month in mutual funds and stocks . I do not have any short term goals.

Kindly suggest some long term stocks and mutual funds and advice me as to how should I go about with my investments.

Advice given:

  • Consider deploying Rs. 70,000 into equity mutual funds as an SIP. It is the best way to get around market volatility and you do not have to go through the hassle of ‘timing the market’. To give you an estimate – Rs. 70,ooo after 20 years at 14% p.a. growth rate gives you about Rs. 9 crores – That is wealth creation!
  • Consider an asset allocation of – 40:40:20 in diversified, mid & small and sectoral funds respectively. Choose 1-2 schemes in each category.
  • Other comments:
    • You can even consider opting out of your ULIP and start deploying the money towards equity mutual funds. This is because in case of ULIP the entire premium amount does not get invested into the equity market and perhaps a lot of charges may be getting deducted upfront by the insurance company. You may want check on this.
    • An alternative to Sukanya Samriddi Yojna is to invest in ELSS for your child. You can avail of 80C benefit and it helps you achieve a much better growth rate in the long run as it gives you exposure to equities.
    • Considering the fact that you do not have any short term goals, you can also consider investing about 80-90% of  your FD amount into wealth creating assets i.e. equity mutual funds.


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