I am 37 years old. Below is my current investment portfolio:

SIP - For the past 2 months:

L&T Balanced Advantage Fund
Mirae Asset Hybrid Fund
Motilal Oswal Multi Asset Fund
PGIM India Midcap Opportunities
Kotak Small Cap Fund

Policies

Max Life Life Perfect Partner Super - Since 2016, 20 years premium paying term

Max Life Shiksha Plus Super - Since 2016, 18 years premium paying term

Jeevan Anand (Plan-149) - Since 2011, 12 years premium paying term

Home Loan

1. Outstanding 1.13 CR - EMI 1.02L (Commenced from 2018, 20 years term)

2. Outstanding 1.25 CR - EMI 1.1L (Commenced from 2018, 20 years term)

Monthly Expenses - 35000/-

Income

Salary - Net 2.8 L/month

Annual bonus - Net 8 LPA

RSUs - Net 5 LPA

I am looking for an aggressive investment plan which helps me to close out my home loans in the next 5-7 years. Please let me know what additional investment or modifications in my current portfolio, do I need to make to achieve this target. 

Ans: Too many funds, continue with SIPs, you may liquidate lumpsums for the home purchase starting with Liquid  / Short term liquid / debt funds.

Ans: You would need an Investment of 80,000 per month to retire the loans in 10 years.

Some funds that can be considered are:

• Samco Flexi Cap fund Growth
• Motilal Oswal Focused 25 fund Growth
• Axis ESG Equity fund – Growth

Ans: Given your age and investment horizon, it's essential to focus on a balanced and diversified portfolio that aligns with your retirement goals. Consider increasing exposure to debt or balanced funds to reduce risk as you approach retirement. Additionally, consider gradually reducing equity exposure to protect capital. Prioritize paying off the housing loan to reduce financial burden and improve cash flow. For retirement, aim to build a sufficient corpus through regular savings and disciplined investing in a mix of equity, debt, and balanced funds. Consult a financial advisor to tailor an investment strategy based on your risk tolerance and financial goals.

Ans: You are investing Rs 14,000 per month through SIPs across various mutual funds. You also have a mediclaim policy of Rs 10 lakh and a term insurance plan of Rs 1 crore. Given your goals, it's great that you've taken steps towards financial security. Your target of Rs 2 crore over the next 10-15 years is achievable with consistent investing and proper planning.

Here’s an analysis of your current investments:

ABSL Flexi Cap Fund (Rs 1000/month): This is a diversified fund investing across large, mid, and small caps. It’s a good long-term choice, but since your investment is relatively small here, consider increasing it slightly.

Axis ELSS Tax Saver (Rs 3000/month): ELSS offers tax benefits and the chance for wealth creation. It is aligned with your tax-saving goals. You can continue investing, as it also provides the benefit of compounding over time.

HDFC Business Cycle (Rs 1000/month) and HDFC Manufacturing (Rs 2000/month): These sectoral/thematic funds are riskier because they focus on specific sectors. I would recommend reducing your exposure to sector funds and shifting the amount into diversified equity funds or large-cap funds to balance your portfolio.

ICICI Prudential Energy Opportunities (Rs 2000/month): Sector-specific again, this fund focuses on energy. While this can give good returns in the short term, it's a high-risk bet in the long term. I suggest reallocating some portion to a more diversified approach.

Kotak Emerging Equity (Rs 2000/month): A mid-cap fund that can deliver higher returns in the long run, but mid-caps can be volatile. Ensure you balance it with large-cap or diversified funds.

Mirae Asset Large & Midcap (Rs 1000/month): This is a good blend of large and mid-cap stocks. You can continue with this, as it balances both stability (large-cap) and growth (mid-cap).

Nippon India Small Cap (Rs 1000/month) and Whiteoak Capital Midcap (Rs 1000/month): These small and mid-cap funds are higher-risk investments. Over the long term, they can give higher returns, but be prepared for volatility.

Recommendations for Improvement
To meet your goal of Rs 2 crore, you need to adjust your investment strategy. Here are some recommendations:

1. Increase SIP Amount Gradually
Rs 14,000 per month is a good start, but you may need to increase this over time to meet your Rs 2 crore target. Since your income is Rs 90,000, aim to gradually increase your SIP by 5-10% every year.
2. Reduce Exposure to Sector Funds
Sectoral and thematic funds like HDFC Business Cycle, HDFC Manufacturing, and ICICI Prudential Energy Opportunities are more volatile. Reallocate a part of this investment to large-cap or diversified equity funds for more stability.
3. Continue ELSS for Tax Savings
Axis ELSS is serving your tax-saving needs. Continue with this investment, but ensure you are within the Rs 1.5 lakh limit under Section 80C.
4. Focus on Diversified Equity and Large-Cap Funds
To achieve your wealth creation goal, increase your exposure to large-cap and flexi-cap funds. They provide a safer and more consistent route to building wealth over the long term.

Some of the small and mid-cap funds you’re investing in can be retained, but the key is not to over-invest in higher-risk funds. A balanced portfolio will reduce risk and increase the chance of reaching your goal.

5. Consider Adding Debt Funds for Stability
You may want to add some debt mutual funds to your portfolio. This will ensure a balanced risk level and provide some protection against market volatility.
6. Prepay Home Loan if Possible
If you have surplus income or can free up some investments after realigning your portfolio, consider prepaying your home loan. This will reduce the interest burden and free up funds for future investments.
7. Review Insurance Coverage
You have Rs 1 crore in term insurance, which is good. However, if your liabilities increase, like for your daughter's education or other expenses, ensure that your coverage remains adequate.
How Much You Need to Save
To reach Rs 2 crore in the next 10-15 years, you'll need to ensure that your investment corpus grows at a healthy rate. With an expected return of 10-12% from mutual funds, you can build a significant corpus, but a more detailed plan with regular reviews is essential.

Example Approach:
If you increase your SIP amount by Rs 2,000-3,000 periodically and reallocate your portfolio as suggested, you will be on track for Rs 2 crore in 15 years. With time, compound interest will work in your favor.
Tax-Saving Strategy
You already invest in Axis ELSS, which gives you tax-saving benefits under Section 80C. You can consider adding another ELSS fund if you need additional tax-saving options, but don't exceed Rs 1.5 lakh in total investment for tax deductions.

Alternatively, you can contribute to PPF for tax-free, low-risk returns. Since you already have a home loan, remember to take advantage of Section 24 for tax deductions on interest payments.

Final Insights
To sum up:

Increase your SIP investments slightly over time to meet your Rs 2 crore goal.

Rebalance your portfolio by reducing sectoral fund exposure and focusing more on diversified and large-cap funds.

Maintain ELSS for tax-saving benefits but diversify if necessary.

Gradually prepay your home loan to reduce interest expenses and free up cash flow for investing.

Continue reviewing your insurance coverage to match future needs.

Making these changes will put you on the right path to achieving your financial goals in 10-15 years.

Best Regards,
K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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