The Mutual Fund Show: Building An Ideal Portfolio For Retirees

While deciding the funds and the corpus you need, it it important to set your goal right, like at what age are you going to retire, according to Anant Ladha, founder of Invest Aaj For Kal.

"Not doing proper diversification into different asset classes is a common mistake by the investors," he said.

After determining your needs, consolidate them and decide the consistent investment stream required. By default, the funds should be allocated to either a debt investment or a fixed income investment, according to Mohit Gang, co-founder and chief executive officer of Moneyfront.

According to him, these factors should be considered while planning mutual funds for retirees:

• Regular income to cater to monthly/annual expenses.

• Liquidity of the overall portfolio.

• Inflation and adjusting portfolio accordingly.

• Capital preservation.

• Minimise the risk.

• Legacy requirements, if any.

"Risk is function of what volatility one can bear in the portfolio... Volatility handling capacity has a direct linkage to accumulated assets and regular requirements," he said.

Query 1: What are your thoughts on DSP Smallcap 250 Quality 50 Index Funds? Am investing in Canara Robeco Small Cap fund for the past two years and considering a switch. My portfolio XIRR (Extended Internal Rate of Return) is 22%.

Name: Bharti Gupta I Age: 56

Anant Ladha: This year and next year is going to be volatile for small caps. But, if she still wants to take some risk, then probably multicap category is right for her. In small-cap fund as a category, active mutual fund can play a better role.

Mohit Gang: DSP Smallcap 250 Quality 50 Index Funds is a great fund. But, I will not recommend her to come out of Cannara Robeco fund either.

Query 2: I want to start SIP of Rs 3,000 in 10 mutual funds for next five years. Please recommend the necessary funds for my portfolio.

Name: Pranab Gupta I Age: 62

Mohit Gang: Considering the dataset he is examining, it is likely that one to two Systematic Investment Plans would suffice. To achieve Rs 1 crore in five years, you need to boost your investment. I suggest opting for Nifty 50 index fund, Parag Parikh Flexi Cap Fund in large-cap funds; Edelweiss Midcap fund, and Bandhan Small Cap fund within the small and mid-cap fund category.

Query 3: How can I invest around Rs 30,000 per month as USD in S&P Index Fund?

Name: Karthikeyan I Age: 68

Anant Ladha: You can invest in Motilal Oswal S&P 500 fund as it is a very good international index fund.

Mohit Gang: It is good to have diversification in your portfolio. Internationally, especially in the US, you have two index choices—Nasdaq and the S&P index. Right now, with the RBI restrictions, it is best to go with Motilal Oswal S&P 500 fund.