Hi, I am 36 years old. I am investing 60k per month in mutual funds as of 2024 with 5%step up every year. I started investing since 2018 with 8k per month sip and gradually increased the amount every year till i reached 60k per month in 2024....

Hi, I am 36 years old. I am investing 60k per month in mutual funds as of 2024 with 5%step up every year. I started investing since 2018 with 8k per month sip and gradually increased the amount every year till i reached 60k per month in 2024. My current mutual fund portfolio is 63 lakh with a cagr of 22%. (100% equity mutual fund with equal distribution in large ,mid and small caps) It touched 67 lakh last month but due to recent fall it has lost clode to 4 lakh in one month. I intend to continue invest 60k with 5% increment till i am 50 years old. I also have a stock portfolio of 35 lakh. Ppf- 12.30 lakh (investing 50k yearly) Epf- 15.71(2.4 lakh yearly employer and employee combined) Us stock portfolio - 10k usd(casual investment) Gold - 2.5 lakh(casual investment) Nps - 3 lakh(2.5 lakh tier 1 and 50k tier 2) investing 50k annually in nps tier 1. I want to accumulate 10 cr in next 14 years when i turn 50. Please guide me on the changes needed in my approach. Thanks, Jimmy

Ans: Hello;

It is good to note your disciplined approach towards investing at a relatively early age.

Only suggestion from my side is to to do annual sip top-up by minimum of 8%, better if you can do 10%, instead of 5% to reach the intended target at 50.

All other investments are assumed to continue as stated(ppf, EPF, nps).

You may reduce direct stock exposure as you reach closer to retirement to avoid corpus impairment due to market volatility. Similarly gains from equity funds should be transferred to liquid or ultra short duration debt funds to protect it against market volatility.

Also note though NPS is factored in retirement corpus calculation, it can accrue to you only at 60 years of age. Unless of course you are ready to annuitize 80% of NPS corpus for premature exit.

Happy Investing;

Ans: Achieving Rs 10 Crores by Age 55: Comprehensive Portfolio Assessment
You’ve made a commendable start by building a corpus of Rs 26 lakhs and contributing Rs 40,000 monthly through SIP. With the goal of reaching Rs 10 crores by the age of 55, it’s important to refine your investment strategy to maximize the potential of your portfolio.

Let’s discuss your current portfolio, proposed changes, and the adjustments necessary to streamline and enhance your investment plan.

Portfolio Overview and Insights
Your current portfolio is diversified across different categories of mutual funds, both through lump sum investments and SIPs. Here's what you have:

Lump Sum Investments:

Multi-Asset Funds
Offshore Fund (China-specific exposure)
SIP Investments:

Large and Mid Cap Funds
Flexi Cap Funds
Mid Cap and Small Cap Funds
Thematic and Sector Funds
Your portfolio provides exposure to a broad range of sectors, asset classes, and geographies. This is important for diversification but also comes with certain risks, particularly in areas like sectoral funds and concentrated offshore investments.

Key Observations and Risks
Before moving on to your proposed changes, it’s important to address several key issues with your current portfolio:

Too Many Funds and Portfolio Overlap:

Your portfolio currently consists of many mutual funds spread across multiple categories. While diversification is critical, having too many funds can lead to portfolio overlap. This means that several of your funds could be investing in the same stocks or sectors, which reduces the benefits of diversification.

For example:

Large and Mid Cap Funds: You hold more than one large and mid-cap fund. While this provides stability, it also increases the chances that these funds are investing in similar stocks.
Thematic and Sectoral Funds: Your portfolio contains several thematic and sectoral funds. These funds have a focused approach, investing heavily in specific sectors or themes. However, this can lead to excessive exposure to a single sector, making your portfolio more vulnerable to sector-specific downturns.
The main issue with having too many funds is that it dilutes the performance of the portfolio. You are likely to face diminishing returns because of the overlap, and it makes tracking the performance of individual funds more difficult.

High Exposure to Thematic and Sectoral Funds:

Thematic and sectoral funds can offer higher returns, but they are also more volatile. These funds depend on the performance of specific sectors or industries, which can be cyclical in nature. When the sector performs well, your returns will be impressive. However, if the sector faces challenges, the performance of these funds will be affected significantly.

For example:

Consumption Theme: A thematic fund focusing on consumption might perform well during periods of high consumer spending, but it could underperform during economic slowdowns.
Thematic Equity: This is a high-risk category, and having multiple thematic funds in your portfolio can lead to an imbalance. You should carefully assess the weight of such funds in your overall portfolio.
Key Risk: The concentrated nature of thematic funds increases the volatility of your portfolio. While these funds can offer great returns in favorable market conditions, they are more vulnerable during market downturns. Hence, they should not make up a large portion of your long-term portfolio.

Offshore Investments and Global Risks:

Having exposure to international markets is often a good way to diversify beyond the Indian market. However, the Edelweiss Greater China Equity Offshore Fund focuses heavily on a single country. This introduces a significant level of risk, as you are exposed to the volatility of the Chinese economy.

Key Risk: China's economy has faced several challenges in recent years, including regulatory crackdowns, political tensions, and economic slowdowns. Investing in a single country, particularly one that has seen a lot of unpredictability, increases the risk in your portfolio. It might be wise to reconsider such concentrated international exposure.

Asset Allocation Strategy:

Your current portfolio consists of a mix of equity and multi-asset allocation funds. While multi-asset funds are designed to reduce risk by investing across asset classes, they can also dilute returns, especially in a long-term wealth-building strategy like yours.

Key Risk: Multi-asset funds often include bonds and other lower-risk instruments. While this provides stability, it might limit the overall growth potential of your portfolio, especially if you are looking to accumulate Rs 10 crores by age 55. Equity, particularly in large, mid, and small-cap stocks, should form the core of your long-term wealth-building strategy.

Proposed Changes: Risks and Considerations
Now, let’s take a closer look at the proposed changes and the risks involved in maintaining or adjusting your investments.

Lump Sum Investment in Multi-Asset Funds:

You are considering switching from multi-asset funds to other investments. Multi-asset funds, while providing stability, often come at the cost of lower returns. These funds typically have a portion of their investments in debt instruments, which may not grow as quickly as equity investments in the long run.

Key Risk: By focusing more on equity over multi-asset funds, you can potentially achieve higher returns, but you will also be exposed to higher volatility. It’s important to strike the right balance between growth and risk, depending on your risk tolerance.

ABSL Multi-Asset Allocation Fund (Consider Switching):

If you decide to move away from this fund, remember that multi-asset funds generally aim to reduce risk by balancing equity with debt and other assets. However, the returns might not match up to pure equity funds, which could be a drawback in your case, where high growth is the primary goal.

Key Risk: The multi-asset fund may offer stability, but moving away from it means increasing your exposure to market volatility. You should be comfortable with the increased risk in exchange for the potential of higher returns.

Edelweiss Greater China Equity Offshore Fund:

This fund focuses on China’s equity market, which, as mentioned earlier, is facing several macroeconomic and political challenges. Having too much exposure to a single country increases the risk of volatility in your portfolio.

Key Risk: While international exposure is a good diversification tool, single-country offshore funds can add significant risk, especially in uncertain global markets. You should assess whether this aligns with your long-term goals and risk tolerance.

ABSL Equity Advantage Fund (Large and Mid Cap):

Large and mid-cap funds provide a mix of stability and growth. These funds invest in both established large companies and growing mid-sized companies. While these funds tend to perform well in stable markets, they might underperform when mid and small-cap stocks surge.

Key Risk: Although large and mid-cap funds offer a balance between growth and stability, they may not fully capitalize on periods of high growth in mid and small-cap stocks. On the other hand, they tend to offer more protection during volatile market periods. Ensure that your portfolio has the right allocation of mid and small-cap stocks to maximize growth.

Thematic and Sectoral Funds (GenNext Fund and Thematic Equity Fund):

The thematic funds in your portfolio are focusing on specific sectors. These funds have the potential for significant returns during favorable periods for the sector but carry increased risk when the sector underperforms.

Key Risk: By holding multiple thematic and sector funds, your portfolio could be overexposed to certain sectors, increasing volatility. While thematic funds can deliver high returns, they should be used sparingly within a broader, diversified portfolio.

Streamlining the Portfolio: Focus on Simplicity and Efficiency
One of the key recommendations for you would be to streamline your portfolio. While diversification is necessary, having too many funds can lead to unnecessary complexity and difficulty in managing your investments.

Portfolio Overlap: With multiple funds in the same categories (large and mid-cap, thematic, multi-asset), you run the risk of duplication in your holdings. This means that multiple funds could be investing in the same stocks, which reduces the benefits of diversification.

Simplification: A well-structured portfolio doesn’t need to have too many funds. You can achieve proper diversification by selecting a few well-managed funds that cover different market segments without significant overlap.

By consolidating your investments into a more focused portfolio, you will be able to track and manage your investments more effectively. This approach will also reduce redundancy and improve the overall performance of your portfolio.

Final Insights
Focus on Equity for Long-Term Growth: Since your goal is wealth accumulation, equity should be the core of your portfolio. Too much exposure to multi-asset or debt instruments could limit growth potential.

Reduce Thematic Exposure: While thematic funds can deliver high returns, they carry higher risk due to their concentrated nature. Consider reducing the number of thematic funds in favor of broader equity funds.

Streamline and Simplify: Reduce the number of funds in your portfolio to avoid overlap. A more streamlined portfolio will be easier to manage and track, leading to better overall results.

Be Cautious with Offshore Exposure: International diversification is important, but be mindful of overconcentration in a single market, especially one as volatile as China’s.

By making these adjustments and focusing on a more streamlined, equity-centric portfolio, you can enhance your chances of achieving your Rs 10 crore goal by age 55.

Best Regards,

K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

Ans: You already built a solid foundation. Many investors delay planning. But you started early at 36. That gives you a strong advantage. You have no liabilities. You have long term thinking. You also have diversified savings like PPF, NPS, Emergency funds and direct stocks. That shows clarity and discipline. This approach builds wealth with less stress over time.

You also started systematic investments in equity funds. That is a positive step. Your selection covers multiple categories like large cap, mid cap, small cap, flexi cap, hybrid and precious metals. So the intent is right. You are trying to create a broad portfolio. That gives balance.

» Your Portfolio Composition Understanding
Your current SIP list includes:

Small cap

Mid cap

Flexi cap

Large cap

Large and mid cap

Hybrid category

Gold and Silver FoF

Equity and Debt allocation fund

Dynamic hybrid fund

This shows you are trying to cover many segments. But too many categories can create overlap. When there is overlap, you get confusion during review. It also makes portfolio discipline difficult. You may think you are diversified. But the holdings inside may repeat. That reduces efficiency.

Your portfolio now looks like:

Equity dominant

Hybrid for stability

Metals for hedge

So the broad direction is fine. But simplifying helps in long-term habit building.

» Fund Category Duplication
You hold:

Two flexi cap funds

One large and mid cap fund

One pure large cap fund

One mid cap fund

One small cap fund

Flexi cap funds already invest across large, mid, small. Then large and mid also overlaps. So the large cap exposure gets repeated. That may not add extra benefit. But it increases monitoring complexity.

So I suggest rationalising. Keep one fund per category in core. Keep satellite space for only high conviction.

» Core and Satellite Strategy
A structured portfolio follows core and satellite method.

Core portfolio should be:

Simple

Long term

Stable

Satellite portfolio can be:

High growth

Concentrated

Based on your thinking level, you can structure like this:

Core funds:

One large cap

One flexi cap

One hybrid equity and debt fund

One balanced advantage type fund

Satellite funds:

One mid cap

One small cap

One metal allocation if needed

This division gives clarity. You can continue SIPs with review every year. No need to stop and restart often. That reduces behavioural mistakes.

» Your Current SIP List Review with Suggested Streamlining

You can consider continuing:

One flexi cap

One large cap

One mid cap

One small cap

One balanced advantage

One equity and debt hybrid

You may reconsider keeping both flexi caps and both gold silver funds. One of each category is enough. Because too many funds do not increase returns. It complicates tracking.

Precious metal funds should not be more than 5 to 7 percent in your portfolio. This is because metals are hedge assets. They do not create compounding like equity. They act as protection during cycles. So keep them small.

» How to Use the Rs 6 Lakh Lump Sum
You asked about lump sum investing. This is important. Lump sum should not go fully into equity at one time. Markets move in cycles. So use a staggered method. You can invest the lump sum through STP (Systematic Transfer Plan). You can keep the amount in a liquid fund and set STP toward your chosen growth funds over 6 to 12 months.

This reduces timing risk. It also creates discipline. So your Rs 6 lakh can be deployed gradually. You may use 50% towards core equity funds and 30% toward satellite growth category. The remaining 20% can go into hybrid category. This gives balance and comfort.

» Regular Funds Over Direct Funds
One important point many investors miss. Direct funds look cheaper. But they demand deep knowledge, discipline, and behaviour control. Most investors lose more through emotional selling and wrong timing than they save on expense ratio.

With regular funds through a Mutual Fund Distributor with Certified Financial Planner qualification, you get guidance, structure and correction. The advisory discipline protects you during market extremes. That is more valuable than a small saving in expense ratio.

A personalised planner also tracks portfolio drift, rebalancing need and category shifts. So regular fund investing gives long-term benefit and behaviour coaching.

» Actively Managed Funds over Index or ETF
Some investors choose index funds or ETF thinking they are simple and cheap. But they ignore drawbacks.

Index funds or ETF will not avoid weak companies in the index. They will invest whether the company grows or struggles. There is no fund manager decision making. So when markets are at peak, index funds continue aggressive exposure. In downturns also they fall fully. There is no cushion.

Actively managed funds work with research teams. They can avoid bad sectors. They can shift allocation based on market and economy. Over long term, this gives better alpha and stability. So continuing with actively managed funds creates better wealth compounding.

» SIP Continuation Strategy
Once the rationalisation is done, continue SIPs every month without interruption. Pause and restart behaviour damages compounding power. SIP works best when you go through all market cycles. You benefit more during corrections because cost averaging works.

So continue SIP amount. You can also review SIP increase every year based on income. Increasing SIP by 10 to 15 percent every year helps you reach large corpus faster.

» Asset Allocation Based Approach
One key point in wealth creation is having the right asset mix. Equity gives growth. Hybrid gives balance. Metals give hedge. Debt gives safety. Your asset allocation should stay aligned to your risk profile and time horizon.

Since you are young and have long term horizon, higher equity allocation is fine. But as time moves, rebalancing is important. Rebalancing protects gains and restores allocation.

So review your asset allocation every year or during major life events like child birth, home buying or retirement planning.

» Behaviour Management
Many portfolios fail not due to bad funds. They fail due to bad decisions. Selling during correction. Stopping SIP when market falls. Chasing past return performance. These mistakes reduce wealth.

Your discipline so far is good. Continue to stay patient during volatility. Equity rewards patience and time.

» Financial Goals Clarity
Since you have no children now, you can decide your long-term goals. Typical goals may include:

Retirement

Future child education

Dream lifestyle purchase

Health care reserves

When goals are clear, investment purpose becomes stronger. So you can map each fund category to goal horizon. Short-term goals should not use equity. Long-term goals should use equity with hybrid support.

» Role of Review and Monitoring
Review once in a year is enough. Frequent review can create anxiety. Annual review helps check:

Fund performance

Expense drift

Category relevance

Allocation balance

Then adjust only if needed. This progress helps you stay confident and aligned.

» Taxation Awareness
Equity mutual funds taxation rules are:

Short term (below one year holding) taxable at 20 percent

Long term (above one year holding) gains above Rs 1.25 lakh taxable at 12.5 percent

Debt mutual funds are taxed as per your income slab.

So always hold equity funds for long term. That reduces tax impact and gives better growth.

» SIP Increase Plan
You can create a simple plan to increase SIP over time. For example:

Increase SIP at every salary increment

Increase SIP during bonus time

Use rewards or extra income for investing

This habit accelerates wealth. So by the time you reach 45 to 50 years, your investments could reach a strong level.

» Insurance and Protection
Before investing large, ensure you have term insurance and health insurance. If not already done, it is important. Insurance protects wealth. Without insurance, even a small medical event can impact investment plan. So review this part also. Since you are married, cover both.

» Wealth Behaviour Mindset
You are already disciplined. Just keep these simple principles:

Invest without stopping

Review once a year

Avoid funds overlap

Follow asset allocation

Avoid reacting to media noise

This helps you reach long term milestones.

» Finally
You are on the right track. Only fine tuning and simplification is needed. Your discipline is visible. Your portfolio will grow well with structure, patience and periodic review. Use the Rs 6 lakh with STP approach. And continue SIP with rationalised categories.

With time and consistency, wealth creation becomes effortless and peaceful. You just need to stay committed and avoid overthinking during market movements.

Best Regards,
K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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