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A Capital Protection Portfolio

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Stock Market Investment is not for just Profit, but for an Investment in Nation...!

This is a capital protection portfolio for you. Its main aim is capital protection and earns more profit than bank fixed deposit. In it, 9 % is investing in equity mutual fund, 6 % in Gold Mutual fund, 10 % in Bond Fund, and 75 % in Liquid fund. TABLE 1 shows the investment in the following seven funds on the first day of investment on 18/04/2014. TABLE 2 shows the latest fund value of these funds, the variation of the percentage of funds due to the variation in growth.

TABLE 1

Name of FundNAV as on 18/04/2014No of Units PurchasedAmount Invested in RsAllocation in %

SBI Emerging Business Fund(G)

60.445

49.63

3000

3 %

Tata Ethical Fund(G)

91.209

32.89

3000

3 %

ICICI Prudential Focussed Blue Chip Eqity Fund(G)

21.75

137.93

3000

3 %

Reliance Gold Saving Fund(G)

13.419

447.13

6000

6 %

Reliance Regular Saving Fund- Debt Option-Retail Plan(G)

17.202

290.63

5000

5 %

SBI Dynamic Bond Fund(G)

15.118

330.73

5000

5 %

HDFC Liquid Fund

25.421

2950.32

75000

75 %

 

 

Total

100,000

100 %

Please see the growth of the above fund in the column below, I will update the present NAV of the fund every weekend. If you invest an amount of INR 100,000/- as of 18/04/2014, how much your fund will grow every weekend? Watch it in the following table. I will answer for it.

Speciality of this Portfolio

The Specialty of this portfolio model is the variety of investments. Growth sustainable with Capital Protection is its major feature. 75% is investing in a Liquid Fund (HDFC Liquid Fund); 10 % in two Bond Funds @ 5% each- first is in Short Term Debt Fund (Reliance Regular Saving Fund- Debt Option) and second is in Long Term Debt Fund (SBI Dynamic Bond Fund); 9% in three Equity Funds @ 3 % each- first is in a Focussed Fund (SBI Emerging Business Fund), second is in a Thematic Fund (Tata Ethical Fund), third is in a Large Cap or Bluechip Fund (ICICI Prudential Focused Bluechip Equity Fund); 6% in a Gold Fund (Reliance Gold Saving Fund). All the above funds are peculiarly in the Growth option. Not in the Bonus option or Dividend option.

TABLE 2

Name of FundNo of UnitsNAV as on 23/11/2020Growth of FundInitial Investment on 18/04/2014

SBI Focused Equity Fund(G)

49.63

165.34

8,206

3,000

Tata Ethical Fund(G)

32.89

187.04

6,152

3,000

ICICI Prudential Focussed Equity Fund(G)

137.93

46.60

6,428

3,000

Nippon India Gold Saving Fund(G)

447.13

20.61

9,215

6,000

Nippon India Credit Risk Regular (Growth)

290.66

23.99

6,973

5,000

SBI Dynamic Bond Fund(G)

330.73

27.63

9,138

5,000

HDFC Liquid Fund(G)

29.503

3976.70

117,325

75,000

 

 

Total

163,437

100,000

Why most allocation in Liquid Fund

75 % of the allocation is in a single debt fund. This fund is a high rate with a huge amount as asset size. A Liquid fund is safer and risks fewer funds. Its NAV will raise every day and never fall below. A fixed return can expect from a Liquid fund. An ordinary investor should keep most money liquid. He can keep the remaining 25 % in other funds without touching or disturbing their long-term growth. 10% of the portfolio is investing in other debt instruments with risky nature. The return from the Bond Fund is depending upon the policy of the central bank of every nation. When the interest rate of a fixed deposit of a bank raises, the return from a bond fund will fall, and when the interest rate falls, the return from the bond fund will raise. The variation of Net Asset Value in Long Term Debt is higher than Short Term Debt. The variation or volatility is higher in Gold and Equity funds. Only 15 % is allocated in these two types of funds.

Why three type of equity funds

There are three types of equity funds in the portfolio. Firstly, a Focused Fund mostly with mid-cap stocks - this is a more volatile, high-risk fund. Fall deeply and rise deeply is its peculiarity. The possibility for growth in the small and mid cap is more than blue-chip stocks. The return from this sector will be higher than any other funds. Secondly, a Thematic Fund. It contains every cap stocks in every zone of industry. When one zone falls, others will rise. This fund will balance the growth of the Equity Fund. Thirdly, a Bluechip Fund is included. Blue-chip funds include the stock with less volatility. They have low risk than other equity funds.

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How to begin?

Mutual funds can buy in two ways- online or physically from an institution. Online purchase is best in my experience. We can purchase a Lump sum Plan or a Systematic Investment Plan (SIP). For Lump sum investment a minimum amount required for investment is ₹ 5000/- in almost fund houses. Some funds needed only ₹ 1000/- or ₹ 500/- But in the Systematic Investment Plan, we needed only ₹ 500/- or ₹ 1000/- for the initial investment. We can stop it at any point after the first installment and can purchase additionally like the Lump-sum plan. ₹ 1000/- is needed for additional purchase in almost Funds.

Updating of Portfolio

If there is less growth than average, I will change that Mutual Fund and will Include a new Fund with a high growth rate and high rating. The Units of the new fund will be at the rate of the present existing value of the old fund. The new fund will select from the same field as the fund. When a Short Term Debt fund is changed, the same category of the fund will succeed it. The percentage of beginning may change due to the different growth rates of various funds.

History of this Portfolio

This Portfolio began on 18/04/2014. No change of funds in the Portfolio to the date. All funds in this portfolio are included at the beginning of this portfolio.

This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.

© 2012 Indra

Comments

Indra (author) from India on March 21, 2018:

Thanks. Equity savings are safe in long term

Consolacion Miravite from Philippines on April 12, 2015:

I have investments in UITFs (Unit Investment Trust Funds) on a high yield dividend portfolio, mostly blue chip stocks. I may put placements on bonds in the near future as the are relatively safe. Investments on mutual funds and UITFs are now beginning to attract a lot of Filipinos, who are usually non-savers. Nice hub on investments that you've got here!