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Ans: Your portfolio reflects a strong commitment to wealth creation through disciplined SIP investments. It is admirable that you are targeting Rs. 1 crore within the next 4 years. However, achieving this goal with your current setup might require adjustments to both your strategy and contributions. Let’s analyse the situation in detail.

Assessing Your Target

Rs. 1 crore in 4 years implies a substantial annual growth requirement.

Current portfolio value: Rs. 14 lakhs.

Monthly SIP: Rs. 12,500.

Achieving the target requires aggressive contributions and equity market support.

Evaluating Your Fund Choices

Your portfolio includes a mix of funds from various categories. Here's an evaluation:

Large and Mid-Cap Fund: Balanced exposure to large and mid-cap stocks.

Large-Cap Fund: Focuses on stable, blue-chip companies but with moderate growth potential.

Flexi-Cap Fund: Offers diversified exposure across market caps.

Tax Saver Fund (ELSS): Suitable for tax savings but has a 3-year lock-in period.

Multi-Cap Fund: Broad diversification but overlaps with the flexi-cap category.

Index Fund: Tracks an index but lacks active management benefits.

Identifying Overlaps in Your Portfolio

Both flexi-cap and multi-cap funds provide broad diversification.

Large-cap and index funds overlap in exposure to blue-chip companies.

Consider consolidating funds to streamline your portfolio.

Disadvantages of Index Funds in Your Case

Index funds are passive and follow a predefined index.

They cannot outperform the market or manage downside risks effectively.

Actively managed funds can generate better returns with experienced fund managers.

Steps to Optimise Your Portfolio

Increase SIP Contributions

Rs. 12,500 monthly SIP may not meet your target.
Incrementally increase SIPs to Rs. 25,000 or more if possible.
Focus on High-Growth Potential Funds

Allocate more to funds with mid and small-cap exposure for higher returns.
Avoid over-diversification to enhance impact.
Review ELSS Allocation

Tax-saving funds are great for deductions but restrict liquidity for three years.
Keep ELSS allocation only if tax-saving benefits are required.
Exit or Reduce Index Fund Allocation

Replace the index fund with an actively managed fund for better performance.
Seek funds with strong past performance and consistent management.
Streamline Portfolio

Maintain a maximum of 4–5 funds to avoid overlap.
Choose funds with distinct strategies and complementary roles.
Importance of Regular Monitoring

Review your portfolio every six months.

Ensure fund performance aligns with benchmarks and category averages.

Consult a Certified Financial Planner for periodic rebalancing.

Tax Implications and Planning

Equity funds attract LTCG tax of 12.5% above Rs. 1.25 lakh in gains.

STCG tax at 20% applies if units are held for less than one year.

Plan redemptions to minimise tax liability.

Need for Emergency Funds and Diversification

Ensure 6–12 months of expenses in liquid or debt funds.

Avoid over-reliance on equity funds for short-term goals.

Final Insights

Your disciplined SIP investments reflect a solid foundation. To achieve Rs. 1 crore in 4 years, increase your SIP contributions and optimise your portfolio. Minimise overlaps, focus on high-growth funds, and replace passive funds with active ones. Regular reviews will keep your investments aligned with your goals. Seek guidance from a Certified Financial Planner to fine-tune your strategy.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment