I invested in a unit-linked insurance plan (Ulip) three years ago. I have paid its annual premium regularly, and the fourth one is due soon. With the recent changes in Ulip regulations, will it be prudent to withdraw and invest the money in mutual funds or exchange-traded funds? Although I have not seen the latest fund value, as my Ulip is three years old, I think I may not make losses if I exit. Also, please suggest some good schemes for new investments. (Goal: long-term exposure, not for short-term liquidity.)
You have not mentioned the details of your Ulip. I presume the Ulip charges would have been higher in the initial years. Since you have paid the premium for the first three years, you have covered the bulk of the allocation charges.
You should find out the latest fund value to figure out if you are in loss. Since you are a long-term investor, you could also stay invested in this Ulip. However, if you want to exit, you could make your policy fully paid and not pay any more premiums. Also, you could make investments in other instruments. In a nutshell, it does not make sense to be churning your investments. You should do so only after careful consideration, if you feel the investment is not performing relative to other comparable investments.
I am 55 years old and my mutual fund portfolio consists of the following: AIG India Equity – Rs 5,000; Mag Global – Rs 38,000; SBI Magnum Multiplier Plus Scheme 199 – Rs 55,000; HDFC Equity – Rs 53,000; HDFC Prudence – Rs 72,000; Tata Balanced – Rs 50,000; Tata Pure Equity – Rs 44,000; Tata Infrastructure – Rs 41,000; Sundaram Select Focus – Rs 66,000 and BSL Equity – Rs 45,000. How are these funds performing as compared to their peers? Do I need to rebalance my portfolio? If yes, what do you suggest?
We would not like to comment on individual funds. But your portfolio is well-balanced since you have balanced, diversified-equity as well as focused and sectoral funds. Subject to your time horizon and risk profile, you can add some midcap funds to your portfolio, since they are likely to give higher returns than largecap funds in the long run. However, you should be prepared to weather higher interim volatility with regard to midcap funds.
The writer is director, Touchstone Wealth. Send your queries to yourmoney@bsmail.in
