Hi , I have recently started investing in mutual funds. I have got following funds in my portfolio. I am 36 years old and I want to invest 30,000 per month and can step up 10% every year. I am looking at 15 years horizon for investment. Could you please tell me if my portfolio is diversified and how much should I invest in each fund and which fund should I stop?
SBI Technology Opportunities Fund Direct-Growth,
Nippon India Consumption Fund Direct-Growth,
SBI Long Term Equity Fund Direct Plan-Growth,
Quant ELSS Tax Saver Fund Direct-Growth,
ICICI Prudential BHARAT 22 FOF Direct - Growth,
Quant Infrastructure Fund Direct-Growth,
UTI Gold ETF FoF Direct - Growth,
ICICI Prudential Silver ETF FoF Direct - Growth,
ICICI Prudential Nifty 50 Index Direct Plan-Growth
Parag parikh flexi cap fund
Motilal oswal midcap fund
Ans: You have included eleven different mutual fund schemes in your portfolio.
You are investing across sectoral, thematic, flexi cap, mid cap, ELSS, and ETF categories.
Your total monthly commitment is Rs 30000, with a step-up plan of 10% yearly.
Your investment horizon is 15 years, which is very healthy.
Your seriousness towards wealth building is highly appreciable.
Assessment of Asset Allocation
Your portfolio is heavily inclined towards sectoral and thematic funds.
Technology, consumption, infrastructure, gold, and silver sectors are present.
Sectoral funds are high-risk because they depend on specific industry performance.
Only a portion of the portfolio should be in sectoral or thematic funds.
Your flexi cap and mid cap funds provide broader market exposure.
Two ELSS funds are good but having two may cause duplication.
Diversification Analysis
Your portfolio is not adequately diversified across core categories.
Too many sector-specific and commodity funds add concentration risk.
Sectors like technology and consumption move in cycles and can underperform.
Commodities like gold and silver are for hedging, not for growth.
Overweight on thematic sectors reduces stability in market downturns.
Core diversification into flexi cap, large cap, and mid cap funds is missing.
Fund Selection Quality
The active equity funds chosen are from strong and reputed fund houses.
Actively managed funds give better long-term returns than passive funds.
Index funds and ETFs like Bharat 22 or Nifty 50 limit your fund manager’s skill.
Passive funds only copy the market without trying to outperform.
Active fund managers adjust portfolio based on opportunities and risks.
Hence, it is wise to prefer active funds over passive options for wealth creation.
ETFs and index funds can underperform due to tracking errors and expense ratio issues.
SIP Strategy Evaluation
Starting SIP of Rs 30000 monthly with a 10% step-up is excellent.
Over 15 years, this disciplined strategy can create substantial wealth.
SIP works best when continued across market ups and downs.
Step-up feature helps to fight inflation and grow corpus faster.
Continue SIP without worrying about short-term market movements.
Risk Assessment
Sectoral exposure increases your portfolio risk significantly.
Technology, infrastructure, consumption, gold, and silver move differently.
In bad cycles, sectoral funds can severely underperform.
Ideally, sectoral funds should not be more than 10-15% of the portfolio.
Your portfolio currently has 50% or more in sectors and commodities.
High sectoral exposure may cause unstable returns in some years.
Gaps or Missing Elements
You are missing sufficient exposure to large cap and multi cap funds.
Core portfolio should focus on broad market funds for better balance.
Only one mid cap and one flexi cap fund is not enough for stability.
You need to stop unnecessary sectoral and commodity funds.
Create a solid base with multi cap, flexi cap, and large cap oriented funds.
Then keep small satellite allocation to sectors for tactical advantage.
Taxation Impact
ELSS funds provide tax deduction under section 80C up to Rs 1.5 lakh.
But you do not need two ELSS funds; one is enough for tax planning.
Equity mutual fund taxation is now changed.
Short-term gains are taxed at 20% if sold before one year.
Long-term gains above Rs 1.25 lakh are taxed at 12.5%.
Keep investments for more than one year to benefit from lower taxes.
Gold and silver ETFs are treated as debt funds.
Gains from gold and silver funds are taxed as per your income slab.
Importance of Investing Through Certified Financial Planner
Direct plans make you responsible for all research, tracking, and risk management.
A Certified Financial Planner adds immense value to your investment journey.
Regular plans through a trusted MFD offer yearly reviews, rebalancing, and advice.
Regular plans help avoid emotional mistakes during market volatility.
The very small additional cost is worth the professional expertise you receive.
Investing through a CFP ensures goal alignment, tax efficiency, and discipline.
Recommended Changes to Your Portfolio
Stop investments into technology sector fund immediately.
Stop investments into consumption theme fund immediately.
Stop investments into infrastructure sector fund immediately.
Stop investments into Bharat 22 ETF and Nifty 50 Index fund immediately.
Stop investments into gold and silver ETF funds immediately.
Retain one ELSS fund for your 80C tax saving needs.
Continue with your flexi cap fund investment.
Continue with your mid cap fund investment.
Add a large and mid cap fund to balance the portfolio.
Add another flexi cap fund or focused fund for broader coverage.
Keep sectoral exposure to maximum 10% combined if needed later.
Ideal Allocation Suggestion
40% in flexi cap funds.
30% in large and mid cap funds.
20% in mid cap funds.
10% optional tactical sector funds after one year of core stability.
For Rs 30000 monthly, you can split like this:
Rs 12000 in flexi cap funds
Rs 9000 in large and mid cap funds
Rs 6000 in mid cap funds
Rs 3000 in sector funds only if your risk appetite allows.
Review your allocation every year.
Additional Recommendations for Better Portfolio Health
Maintain an emergency fund for 6 months’ expenses separately.
Ensure you have pure term insurance cover based on your income and liabilities.
Create specific goals like retirement, children education, buying a house, etc.
Align investments to these goals for better discipline and motivation.
Step up your SIPs by 10% every year without fail.
Avoid timing the market or reacting to short-term volatility.
Invest with patience and stay focused on the 15-year horizon.
Work closely with a Certified Financial Planner for yearly reviews.
Finally
You have taken a wonderful step towards wealth creation at age 36.
SIP with a step-up strategy and 15 years horizon is powerful.
Portfolio needs urgent streamlining to avoid high sector concentration.
Focus on broad diversified funds instead of sectoral or commodity themes.
Stick to active fund management rather than index or ETF strategies.
Use the services of a Certified Financial Planner for hand-holding and expert advice.
Keep your investments goal-based and not market-news-based.
Build an emergency fund separately to safeguard your investments.
Gradually step-up SIPs to match inflation and rising goals.
Be patient, disciplined, and committed for next 15 years.
You are well on your way towards strong financial independence!
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
Question by anshul on Mar 21, 2025Hindi
