Mr. X, a 45 years old, is employed in a private company and planning to retire...

Mr. X, a 45 years old, is employed in a private company and planning to retire at 58. He wants to plan for his retirement kitty so that he can comfortably live his retirement through regular cashflows apart from the pension that he is going to receive from his employer. He has also saved Rs. 15,00,000 for his retirement. He would like to save Rs. 25,000 every month for this goal. You, as an advisor, is required to advise Mr. X on constructing his mutual fund portfolio for his retirement goal. Please suggest the category and weightage wise portfolio and describe the reasoning for the same.

Solutions

Expert Solution

I will be advising for preparation of mutual fund portfolio as follows-

A. Growth portfolio- I will advise him to allocate 20% of the total portfolio value into growth portfolio that he is 45 years old and he can invest for longer period of time equities growth.

B. Tax saver scheme- I will advise him to allocate 15% of the total portfolio to tax saver scheme the mutual fund which will be helpful in saving his overall rate of return from getting taxed.

C. Value funds- I will advise him to locate 15% of the total portfolio to value funds as these companies are valued lower beyond their intrinsic value in the market and there is an expectation of catching up with their intrinsic valuations.

D. Balanced funds- I will advise him to locate 20% of its portfolio to balance funds because they are just like all weather portfolios and they will be hedging adequately against any volatility by having better exposure to equity and debt.

C. Debt funds- I will be advising him to allocate 30% of his portfolio to the debt funds because it will be helping him in order to have a better security against any of the downside in the market and he is 45 years old so after he is retired, he will be needing uniform rate of income and these debt securities will be providing him with uniform interest rate.

jeff jeffy answered 2 years ago

Next > < Previous

Related Solutions

Mr and Mrs Smith are married and they are both 45 years old and in good...

Mr and Mrs Smith are married and they are both 45 years old and in good health. Mr Smith has $10million of assets in his name while Mrs Smith has $6MM of assets in her name. Both Mom and Dad hold stock in Amazon, Facebook , Ford and JPM and these stocks constiute their wealth. Neither Mr or Mrs Smith have ever worked and all of their wealth comes from inheritance from past generations. The couple has three children and...

Case Background: A young couple, both 25 years old, are planning to retire in 40 years...

Case Background: A young couple, both 25 years old, are planning to retire in 40 years at the age of 65. After they retire, they expect to live for an additional 20 years, until age 85. They plan to begin saving for retirement today and based on information from their financial planner, they think they will earn 8% on their investment compounded annually. They think they will earn 5% on their retirement savings after they retire. Using the answer from...

Case narrative: A young couple, both 25 years old, are planning to retire in 40 years...

Case narrative: A young couple, both 25 years old, are planning to retire in 40 years at the age of 65. After they retire, they expect to live for an additional 20 years, until age 85. They plan to begin saving for retirement today and based on information from their financial planner, they think they will earn 8% on their investment compounded annually. They think they will earn 5% on their retirement savings after they retire. 1. If they begin...

Andrew Cousins is 63 years old and is employed as a personal tax planning advisor by...

Andrew Cousins is 63 years old and is employed as a personal tax planning advisor by PWMG LLP. Andrew is married to Ying Yue Cousins; Ying Yue is a pensions analyst at Falcons plc, a large investment bank. Andrew owns an investment portfolio of tangible and intangible assets; he is also a keen collector of antique paintings and sculptures. Andrew intends to retire in the near future; he plans to acquire a retirement home in Nice, France. To finance this...

Ms. B is 55 years old and is planning to retire at age 62. She wants...

Ms. B is 55 years old and is planning to retire at age 62. She wants to have a retirement income from that point until age 85. She projects that she will need $5,000 per year during her retirement to supplement her other retirement income. She has accumulated a nest egg $25,000 at this point. Assume that she can invest at a 8% annual rate in the pre-retirement period, that her funds can be invested at a 9% annual rate...

Mr. X will retire in 10 years and currently has $200,000 inretirement account. He assumes...

Mr. X will retire in 10 years and currently has $200,000 in retirement account. He assumes that he will live up to 20 years after retirement. During those 20 years, he projects annual expenses of $50,000. If the interest rate is 7%, how much he needs to deposit annually for the next 10 years? Assume the deposits before retirement and withdrawals after retirement all occur at beginning of year.

You got information from the admitting office that Mr John 45 years old client with complaints...

You got information from the admitting office that Mr John 45 years old client with complaints of fever and headache wants to get admitted to your unit for observation and treatment. Answer the following questions. 1.Describe your role as an enrolled nurse in admitting Mr John to your unit (in 30-40 words). 2.Enlist twelve(12) pieces of information that you would document in his admission database. 3. What is the role of doctors in care of above client? 4. What is...

Consider the following information: You will work for (maybe) 45 years and, then, retire. You will...

Consider the following information: You will work for (maybe) 45 years and, then, retire. You will live for an additional 25 years (more or less) after you retire. You estimate that you will need $12,000 per month through your retirement years. (You are not absolutely sure about the amount or if you need it at the beginning or end of each month.) You want to leave (about) $1,000,000 to your heirs upon your demise. You expect to earn (around) 12%...

Marvin Combs is 43 years old and is employed by a Canadian public company. His annual...

Marvin Combs is 43 years old and is employed by a Canadian public company. His annual salary is $82,468, none of which is commissions. Because of his outstanding work during 2017, he has been awarded a $20,000 bonus in 2017 that was paid on December 15, 2017. For 2017, his employer withheld the following: EI premiums $836 CPP contributions $2,564 Federal Income Tax $26,000 Professional association dues $3,400 Registered pension plan (RPP) $6,800 Other Information:...

Ryan is 50 years old and will retire in 15 years. He expects to live for...

Ryan is 50 years old and will retire in 15 years. He expects to live for 25 years after he retires, until he is 90. He wants a fixed retirement income that has the same purchasing power at the time he retires as $40,000 has today. (The real value of his retirement income will decline annually after he retires.) His retirement income will begin the day he retires, 15 years from today, at which time he will receive 24 additional...

Subjects