A similar query came from a 60-year-old retired government officer from Guwahati and a viewer of The Money Show on ET Now who sought advice on whether her mutual fund portfolio was aligned with her long-term goals and whether she should consider lumpsum investing alongside her existing SIPs.
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Her portfolio currently includes Nippon India Multicap Fund, ICICI Prudential Equity & Debt Fund, SBI Multi Asset Allocation Fund, Axis Gold Fund, and Franklin India Opportunities Fund.
According to Harshvardhan Roongta, CEO, CFP, Roongta Securities, the overall portfolio appears well-constructed and the schemes belong to strong categories with decent long-term track records. He added that it is encouraging to see a retired investor continue with disciplined equity investing through SIPs, especially when pension income is likely helping cover regular expenses.
However, he pointed out that there appears to be some overlap between Nippon India Multicap Fund and Franklin India Opportunities Fund, as both may have similar exposure across largecap, midcap, and smallcap stocks. To reduce duplication, he suggested that the investor could stop fresh investments in Franklin India Opportunities Fund and instead add a pure large-cap-oriented scheme.
Roongta recommended considering the ABSL Nifty 50 Equal Weight Index Fund to bring dedicated largecap exposure into the portfolio. He noted that a largecap index fund with equal-weight allocation can help provide better diversification within large companies while balancing the existing exposure to multi-cap and mid-cap-oriented funds. On lumpsum investing, Roongta explained that investors need to clearly understand the difference between SIP and lump sum investing before deploying money. He said that lump sum investments expose the entire corpus to immediate market volatility, while SIPs help average out investment costs over time.
According to him, lumpsum investing is not necessarily wrong, but investors should be mentally prepared for short-term fluctuations in portfolio value. If the investor understands these risks and has a long-term horizon, she can proceed with lump sum investments as well.
The discussion also touched upon whether senior citizens should reduce equity exposure in the current volatile market environment. Roongta said there cannot be a one-size-fits-all approach because every retiree has different income sources, expenses, and financial goals.
He explained that the priority for retired individuals should be ensuring stable cash flows through pension income, rental income, deposits, or other fixed-income avenues. Once regular monthly expenses are comfortably covered, adding growth assets such as equities or equity mutual funds becomes important to combat inflation over the long term.
According to him, completely avoiding equity after retirement may create financial challenges later because expenses continue to rise with inflation even after retirement. He said senior citizens may still require some allocation to equities, although the percentage can vary significantly depending on individual financial situations.
Roongta added that equity exposure for retirees could range anywhere between 5% and 90%, depending on the strength of other income sources and overall financial planning needs.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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