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A Capital Protection Portfolio

Updated on June 11, 2018

This is a capital protection portfolio for you. Its main aim is capital protection and earn 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 fund on the first day of investment on 18/04/2014. TABLE 2 shows the latest fund value of these funds, the variation of percentage of funds due to the variation in growth.

TABLE 1

(click column header to sort results)
Name of Fund  
NAV as on 18/04/2014  
No of Units Purchased  
Amount Invested in Rs  
Allotment  
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 at the column below, I will update the present NAV of the fund at every weekend. If you invest an amount of ` 100,000/- as on 18/04/2014, how much your fund will grow at every weekend ? Wath it, the following table will answer for it.

Speciality of this Portfolio

The Speciality of this portfolio model is the variety in investment. 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 Small and Mid cap Fund(SBI Emerging Business Fund), second is in a Diversified Equity Fund (Tata Ethical Fund), third is in a Large Cap or Blue chip Fund (ICICI Prudential Focused Blue chip Equity Fund); 6% in a Gold Fund (Reliance Gold Saving Fund). All the above funds are peculiarly in Growth option. Not in Bonus option or Dividend option. It will ascertain to exhibit the growth rate fully in the second table.

TABLE 2

(click column header to sort results)
Name of Fund  
No of Units  
NAV as on 15/03/2018  
Growth of Fund  
Initial Investment on 18/04/2014  
SBI Emerging Business Fund(G)
49.63
131.608
6,533
3,000
Tata Ethical Fund(G)
32.89
158.792
5,223
3,000
ICICI Prudential Focussed Bluechip Equity Fund(G)
137.93
39.66
5,470
3,000
Reliance Gold Saving Fund(G)
447.13
12.926
5,780
6,000
Reliance Regular Saving Fund-Debt option-Retail Plan(G)
290.66
24.062
6,994
5,000
SBI Dynamic Bond Fund(G)
330.73
21.076
6,971
5,000
HDFC Liquid Fund(G)
29.503
3398.525
100,267
75,000
 
 
Total
137,237
100,000

Why most allocation in Liquid Fund

75 % of the allocation is in a single debt fund. This fund is a high rated with a huge amount as asset size. A Liquid fund is more safe and risk less fund. Its NAV will raise every day and never fall bellow. A fixed return can expect from a Liquid fund. The return from the Bond Fund is depending up on the policy of central bank of every nation. When the interest rate of fixed deposit of bank raises, the return from a bond fund will fall, and when interest rate falls, the return from bond fund will raise. The variation of NAV 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 type of funds.

Why three type of equity funds

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

How to begin?

Mutual funds can buy in two ways- one by on line and other by physically from an institution. By on line is best in my experience. We can buy the funds by on line by two ways- one by Lump sum Plan or by Systematic Investment Plan. 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 Systematic Investment Plan, we needed only ` 500/- or ` 1000/- for initial investment. We can stop it at any point after first installment and can purchase additionally like Lump sum plan. ` 1000/- is needed for additional purchase in every plans.

A Promise

Here is a promise for you. When any one of the above fund get less return than the average or when any fund loss popularity and rating, I will change that Mutual Fund and will Including a new one with popularity, high growth rate and high rating. The Units of the new fund will be at the rate of present existing value of the old fund. The new fund will select from the same field of the fund. When a Short Term Debt fund is changed, a same category of fund will succeed it. The percentage of beginning will vary due to the different growth rate of various funds.

History of this Portfolio

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

Comments

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    • indraprasad v profile imageAUTHOR

      Indra prasad v 

      6 months ago from India, Kerala, Thiruvanantha puram

      Thanks. Equity savings are safe in long term

    • csmiravite-blogs profile image

      Consolacion Miravite 

      3 years ago from Philippines

      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!

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