Financial Guidance - Take Exposure In Mid-caps

Q I am a 25-year-old working male. I stay with my parents and my income is Rs 25,000 p.m. My father gets a pension of Rs 10,000 p.m. I have been working for the last five years and have been investing in funds from 2006 end onwards. Also, I trade occasionally but in small quantities of 10 shares. Listed below is my current status: On the left is the MF name and on the right is the percentage of the MF in the total portfolio of MF which amounts to 4 lakhs over the last three years through SIPs. As on date all the returns from the MFs are in green. All the SIPs ended in December 2009. I can save around 12,000-13,000 per month. I agree that I have invested in quite a few ELSS funds but since all of them are in locked-in period, I cannot exit them as of now. I also pay a premium of Rs 15,000 for my ULIP every year and have Rs 25,000 in PPF so far. I plan to go for a term insurance this year. Can you suggest how to go about from here on?
                                                            - S. Ramakrishna, on email

A Ramakrishna, do not ever stop your SIPs. It is the discipline of the method that eventually gives you returns that you seek. Almost half the year has gone by since your SIPs lapsed. As you have mentioned, you do have a lot in ELSS which by itself is not bad if that is allowing you to save under the tax-saving regulation. Since the ELSS schemes are mostly invested in the large cap space now, you have ended up with being overweight in large-cap space (almost 82 per cent). You could consider increasing your exposure to mid-cap funds. This space is expected to witness higher fund flows in the medium-term future. For your SIP I have suggested a plan as below, where the mid-cap is coming in through IDFC Premier Equity Fund. Similarly, I suggest continued exposure to the infrastructure sector through ICICI Pru Infrastructure Fund. It might be slow this year, but should do well as we go into the next year. Use this time to accumulate through SIP. The nature of the Infrastructure sector is quite diversified by itself; hence I would not mind the increased exposure there. You could consider shifting the Services sector fund to Infra. Since all your funds are equity funds, I guess you are prepared to give them at least 3 to 5 years to grow. In case you anticipate need for some money in between, consider saving a bit in debt funds.

Do continue with your PPF contribution. You are on the right track as far as considering term insurance goes. That is the right way to insure yourself. Also, do remember that when taking insurance, it is the amount insured that is important and not just the premium paid every year!