Hi, I am 35 year old and I want to build a corpous of 2-3 cr in next ten year i.e by 2034. I am investing 45k pm in equity through SIP. My current allocation is Rs20k in quant small cap growth direct, 10k in HDFC mid Cap opportunity fund, 5 in ICICI Large and Mid cap fund, 5k in ABSL PSU Equity fund, 5 k in quant infrastructure fund. (Note: I recently switched from Axis small cap fund to quant small cap fund having corpous of 2L). I am also committed to step up by 10% each year. Also I have NPS balance of Rs 27.00 lakh as on date and In NPS monthly contribution is Rs 22 k, which is separate from MF investment of 45K. Please advise whether change is needed in my plan or I may go with the same.

Ans: Congratulations on your commitment to building a significant corpus by 2034. Your current investment strategy is well thought out and shows a good understanding of equity investments through SIPs. Let’s review your plan and see if any changes or improvements can be made to help you achieve your financial goals more effectively.

Current Investment Portfolio
Your current SIP allocation is as follows:

Quant Small Cap Growth Direct: Rs 20,000 per month
HDFC Mid Cap Opportunity Fund: Rs 10,000 per month
ICICI Large and Mid Cap Fund: Rs 5,000 per month
ABSL PSU Equity Fund: Rs 5,000 per month
Quant Infrastructure Fund: Rs 5,000 per month
Additionally, you have an NPS balance of Rs 27 lakh, with a monthly contribution of Rs 22,000.

Evaluating Your Portfolio
1. Small Cap Funds
Small cap funds can provide high returns but come with significant volatility. Your allocation of Rs 20,000 per month in Quant Small Cap is substantial. Given the potential for high growth, this is a reasonable allocation but should be balanced with more stable investments.

2. Mid Cap Funds
Investing Rs 10,000 per month in HDFC Mid Cap Opportunity Fund is a good choice for capital appreciation. Mid cap funds offer a balance between the high growth of small caps and the stability of large caps.

3. Large and Mid Cap Funds
Allocating Rs 5,000 per month in ICICI Large and Mid Cap Fund adds stability to your portfolio. These funds invest in a mix of large and mid cap stocks, providing growth potential with less volatility than small caps.

4. Sector-Specific Funds
ABSL PSU Equity Fund: Rs 5,000 per month in a sector-specific fund like this can be risky due to its concentrated exposure.
Quant Infrastructure Fund: Another sector-specific fund which can be highly volatile and dependent on government policies and economic conditions.
Suggested Portfolio Adjustments
To achieve your goal of Rs 2-3 crore in 10 years, here are some suggestions:

Diversify Sector-Specific Investments
Sector-specific funds like ABSL PSU and Quant Infrastructure can be high-risk. Diversifying into more broadly diversified equity funds can reduce risk. Consider reallocating some of these investments to multi-cap or flexi-cap funds.

Increase Stability with Large Cap Funds
Increase your allocation to large cap funds. These funds offer more stability and consistent returns, balancing the high-risk small and mid cap investments.

Maintain ELSS for Tax Benefits
If you are not already investing in ELSS funds, consider allocating a portion of your SIPs to them. They provide tax benefits under Section 80C and can help in wealth accumulation.

Step-Up SIP Strategy
Your plan to step up your SIPs by 10% each year is excellent. This strategy helps in combating inflation and increasing your corpus significantly over time. Continue with this disciplined approach.

National Pension System (NPS)
Your NPS contributions are a great way to build a retirement corpus. The NPS offers tax benefits and the potential for good returns. Keep contributing Rs 22,000 per month and ensure you review the asset allocation within NPS regularly.

Example Reallocation
Here’s a suggested reallocation for a balanced and diversified portfolio:

Large Cap Fund: Rs 10,000 per month
Multi-Cap/Flexi-Cap Fund: Rs 10,000 per month
Mid Cap Fund: Rs 10,000 per month
Small Cap Fund: Rs 10,000 per month
ELSS Fund: Rs 5,000 per month
This allocation provides a balance of growth and stability, with a focus on diversified funds to reduce risk.

Monitoring and Rebalancing
Regularly monitor your investments to ensure they are performing as expected. Rebalance your portfolio annually to maintain the desired asset allocation. This helps in mitigating risks and ensuring alignment with your financial goals.

Conclusion
Your current investment strategy is commendable, and with a few adjustments, you can further optimize your portfolio for better risk management and growth. Diversifying your sector-specific funds into broader equity funds and maintaining a disciplined step-up SIP strategy will help you achieve your goal of Rs 2-3 crore by 2034.

Feel free to reach out for personalized advice or assistance in structuring your investment portfolio. I'm here to help you optimize your investments and achieve your financial objectives.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in