Introduction #

Asset allocation and risk management are two pillars of the financial planning. Here I talk about a simple asset allocation strategy in the market bucket. For debt bucket, I will suggest to keep enough to meet your basic goals rather than capping it at a percentage. The portfolio assumes that the investor plans to invest 6 lakh in a year i.e. 50K per month.

Strategy #

Divide 6 lakhs across large caps and small caps in the stocks and mutual funds. I use small cap term to indicate both mid-cap and small-cap

• 25 % Large Cap Mutual Fund i.e. 1.5 lakh
• 25 % Small Cap Mutual Fund i.e. 1.5 lakh
• 25 % Large Cap Stocks i.e. 1.5 lakh
• 25 % Small Cap Stocks i.e. 1.5 lakh

MF - Large Cap #

• 50% UTI Nifty 50 Index Fund i.e. 75K
• 50% HDFC Index Nifty 50 Plan i.e. 75K

MF - Small Cap #

• 50% SBI Small Cap Fund i.e. 75K
• 50% Nippon India Small Cap Fund i.e 75K

Stocks - Large Cap #

1. 20% HDFCBank i.e. 30K
2. 20% INFY i.e. 30K
3. 20% DIVISLAB i.e. 30K
4. 20% MARUTI i.e. 30K
5. 20% HCLTECH i.e. 30K

Stocks - Small Cap #

1. 20% PVRINOX i.e. 30K
2. 20% TARSONS i.e. 30K
3. 20% VRLLOG i.e. 30K
4. 20% GREENPANEL i.e 30K
5. 20% NH - Narayana Hrudayalaya i.e. 30K

How-to invest #

Rather than doing SIP, you should pick the most lucrative item and invest in that making sure that you do not invest more than the yearly allocated amount. Suppose HDFCBANK is most lucrative in a month, you can invest 30K in the same that month. 30K is chosen as you do not want to invest more than your yearly allocated amount.

Pie Chart #

pie showData title Asset Allocation "UTI N50": 75 "HDFC INDEX": 75 "SBI SMALLCAP": 75 "Nippon India SMALLCAP": 75 "HDFCBank": 30 "INFY": 30 "DIVISLAB": 30 "MARUTI": 30 "HCLTECH": 30 "PVRINOX": 30 "TARSONS": 30 "VRLLOG": 30 "GREENPANEL": 30 "NH": 30