I am a 42-year-old entrepreneur with a portfolio of around \u20b912 crore spread across equity mutual funds (55%), real estate (25%), debt mutual funds (15%) and 5% in savings account. While my investments have grown well, I feel my portfolio is becoming difficult to manage. How should I simplify my investments?<\/p>\n
\u2013 Name withheld on request<\/p>\n
Based on the available information, we will have to make some assumptions on how your portfolio is split to answer this question.<\/p>\n
About 55% or \u20b96.6 crore is parked in equity mutual funds. This is followed by real estate investments that make up around 25% of the investments ( \u20b93 crore) and debt mutual funds and cash or other investments make up the remaining 20% (15% debt, 5% cash\/other). However, it has to be redesigned to be easily accessible. A portfolio that has grown well is not the same as a portfolio that is well-structured.<\/p>\n
Let\u2019s take this one bucket at a time. Start by streamlining your equity holdings. Remove any overlaps, avoid duplication in the holdings across different funds, and if you can, consolidate all equity investments<\/a>, especially if there are any small non-core investments in certain funds. This will help you with ease of access and give you a clearer, clutter-free picture of where your overall portfolio stands.<\/p>\n For debt, it is crucial to ensure the allocation in short-term or liquid options and review credit quality carefully.<\/p>\n Overall, the best way to structure these investments is by adding a layer of financial planning. Bifurcate your current corpus of \u20b912 crore into goal-specific buckets and surplus. For a 42-year-old entrepreneur, this typically includes children’s higher education, retirement corpus<\/a>, a planned business reinvestment, and any near-term large expenditure. Assume this exercise assigns roughly \u20b97 crore of the portfolio to goal-specific buckets. That leaves approximately \u20b95 crore as surplus wealth \u2014 money beyond what the defined goals demand.<\/p>\n Surplus strategy<\/p>\n The \u20b95 crore surplus then gets divided across three purpose buckets:<\/p>\n