How can an NRI plan his retirement with mutual funds?
I am new to investments. I am an NRI. My aim is to plan my retirement which is after 10 years and my wife's retirement after 15 years. Recently, I have opened 3 in 1 account with ICICI direct.com. Kindly advise me. My questions are like:
Which shares or mutual funds should I buy for a proper diversification?
Should I invest in index funds?
Should we have an international exposure?
I wanted to invest a lumpsum amount and also want to start SIP for both of us to have a decent retirement life. At present, we spend Rs 2 lakh on a monthly basis.
Jitendra Solanki, Founder, JS Financial Advisors, responds:
For any new investor its advisable to start with a core and satellite strategy for equity investments. This you create by having mix of large cap, multi cap and mid cap funds. For large cap you can look at index funds like UTI Nifty Index Fund or ICICI Prudential Nifty Next 50 index funds. In multi cap category, you can consider Mirae Asset India Equity Fund or Franklin India Equity Fund. This can be 75-80 per cent of your total exposure. The rest 20-25 per cent can be invested in mid cap funds which will work towards enhancing your portfolio returns.
L&T Mid Cap Fund or HDFC Mid Cap Fund can be considered. If you approach with this equity allocation you would get desired results. Having said that its also wiser to have other asset classes like debt and gold in your portfolio. An overall asset allocation approach goes well in making your investments more efficient. Its wiser to consult a Sebi registered investment adviser if you are new to investments. S/he can work with you in selecting the right asset allocation based on your risk appetite and your goals.
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