Investing for a lifetime

We, at Money Today, have always believed that actions speak louder than words. Whether we are recommending a stock or giving advice on an insurance policy, choosing a mutual fund or charting a financial plan, it is our endeavour to give you actionable advice with specific takeaways. So, the annual ranking of best mutual funds is an opportune time to launch the Money Today-Value Research Lifestage Model Fund Portfolios. The four model portfolios developed by Value Research can be replicated by readers at various stages of their investing lives.

It's worth noting that these portfolios are not designed to earn spectacular returns. So, don't expect chart-busting performances. The objective is to build a well-balanced basket of mutual funds that can help readers reach their financial goals, such as buying a house, funding their children's education or planning for retirement. This is because all the funds have predefined asset allocations and the fund manager shall periodically rebalance the portfolio to maintain the stipulated limits.

Apart from this rebalancing, the investor will not have to tinker around with the portfolio. Value Research has selected funds that require minimal intervention. Since the intention is to build a core equity holding, tactical funds have been avoided. This will also ensure tax and load efficiency. Every time you sell a fund, there's tax to be paid on the gains (unless it is an equity-oriented fund and you have held it for over a year). If you sell before a year, an exit load might be slapped on you.

Three of these model fund portfolios— Wealth Maximiser, Money Builder, Stable Growth—are for the accumulation stages of the investment cycle, while the fourth portfolio— Income Generator—is for the distribution stage. All investments in the three accumulation portfolios will be through systematic investment plans. Every month, Rs 5,000 will flow into each of the three portfolios in the proportion set by Value Research. On the other hand, Rs 5,000 a month will flow out from the Income Generator portfolio through systematic withdrawal plans in each fund.

We will track these four portfolios—our own fund of funds—and give monthly updates on their performance in these pages. Although the model portfolios have been designed with care, they may require some changes in the future. Any alteration in their composition will be explained to the readers who are following in the fund manager's footsteps. Happy investing!