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Ramalingam

Ramalingam Kalirajan  |9777 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 23, 2025

Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more
Deepak Question by Deepak on Jun 16, 2025Hindi
Money

I am 37 years and doing sip of 37.5k every month in these fund for retirement goal which is 20 years from now. Apart from this I have 3L in SGB, nps sip of 14k every month and ppf of 10L. Hdfc flexi cap fund - 10k Hdfc Midcap fund - 2.5k Icici large and midcap fund - 10k Icici value discovery fund - 5k Tata small cap fund - 10k

Ans: Reviewing Your Current Investment Setup
You are 37 years old with a 20-year retirement horizon.

Monthly SIP total is Rs?37,500 in equity mutual funds.

You also hold Rs?3?lakh in sovereign gold bonds (SGB).

You invest Rs?14,000/month in NPS.

You have Rs?10?lakh in PPF.

Equity SIP breakdown:

Flexi?cap: Rs?10,000

Mid?cap: Rs?2,500

Large & mid?cap: Rs?10,000

Value discovery: Rs?5,000

Small?cap: Rs?10,000

This shows you are aggressive and committed. Excellent foundation for long-term wealth building.

Setting Clear Financial Goals
Your horizon (20 years) is ideal for equity exposure.

You may have multiple goals: retirement corpus, possibly medical, travel, legacy.

Define corpus target for retirement (e.g., monthly income, inflation).

Map goal timelines (retirement, near-term smaller goals).

Detailed goal clarity helps in allocation and withdrawals.

Assessing Overall Asset Allocation
Your current allocation includes:

Equity mutual funds: aggressive mix across caps.

NPS: equity + government securities exposure.

PPF: long?term debt with tax benefits.

SGB: gold holding.

Equity SIP alone is heavily tilted to small and mid?caps (~60%). Higher growth but higher volatility.
Your NPS and PPF provide debt and tax-efficient retirement coverage.
Gold acts as hedge, though no income.

This is good but can be further refined for diversification and risk control.

Rebalancing Equity Exposure
Small?cap and mid?cap overweight

These categories offer growth but high swings.

Review small?cap SIP through performance and volatility.

Mid?cap is decent, but focus needs to balance large?cap exposure.

Flexi?cap and value discovery funds

Flexi?cap offers flexibility; wisely used for allocation shifts.

Value discovery tends toward contrarian picks; keep modest exposure.

Large?cap or diversified equity

Add long?term large?cap exposure for stability.

You lack pure large?cap SIP. Consider adding one.

Aggressive hybrid or flexi?asset allocation

A blended plan (equity + debt) cushions downside.

With 20-year horizon, you may take slightly lower equity via hybrid.

Proposed Portfolio Refinement
Let us reshape monthly Rs?37,500 SIP:

Maintain small?cap SIP: Rs?5,000

Maintain mid?cap SIP: Rs?2,500

Maintain value discovery SIP: Rs?5,000

Maintain flexi?cap SIP: Rs?10,000

Add large?cap equity SIP: Rs?7,500

Add aggressive hybrid SIP: Rs?7,500

This keeps growth potential while smoothing volatility.
Small?cap exposure reduces from Rs?10k to Rs?5k.
Large?cap addition and hybrid provide balance.

Role of NPS, PPF, SGB in Retirement Planning
NPS (Rs?14k/month)

Provides equity + government securities mix.

Gives forced retirement equity exposure with tax benefit.

Include both Tier I and Tier II as needed.

PPF (Rs?10?lakh)

Good long?term debt asset with guaranteed returns.

Acts as stable base for retirement corpus.

SGB (Rs?3 lakh)

Adds gold hedge and moderate interest (~2.5%).

Good allocation for inflation buffer and equity hedge.

These three form stable core. They complement equity mutual funds.

Additional Asset Class Suggestions
Short?term debt or low?duration funds

Useful to park upcoming lump sum or reserve cash.

Helps during market corrections.

Consider Rs?2,500/month for emergency buffer.

Gold ETF or gold fund (optional)

You have SGB; adding gold ETF increases gold weight.

If gold allocation stays ~5–7%, fine.

Avoid raising gold exposure too much.

International equity funds (optional)

Small exposure (5%) helps global diversification.

Acts as hedge to domestic volatility and currency moves.

Avoiding Index and Direct Plan Pitfalls
Index funds track index blindly; offer no manager to act.

In adversity, index falls without buffer.

Actively managed funds adapt, exit, and rebalance.

Direct plans lack advisory guidance and monitoring.

Regular plans via CFP ensure disciplined reviews and rebalancing.

They help manage emotions and allocation drift.

Prefer regular plans with CFP-backed MFDs for strategic portfolio support.

Managing Taxation Efficiently
Equity funds held beyond 1 year get LTCG tax (12.5% on gains above Rs?1.25 lakh).

Short?term capital gains (
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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Ramalingam

Ramalingam Kalirajan  |9777 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 15, 2024

Asked by Anonymous - Apr 14, 2024Hindi
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Money
Sir. I am continuing my sip of 17000 in these mutual fund. 1.parag parikh flexicap dir- 3000 2.icici prudential technology-2000 3.Axis small cap dir-3000 4.Canara robeco small cap-2000 5. Quant small cap-3000 6. Nippon ind small cap-4000 Investment period - 15yr plus Age- 35. Please suggest me for the same.
Ans: Your portfolio has a mix of flexi-cap, sectoral, and small-cap funds, which is good for diversification. Considering your age and investment horizon, here are a few suggestions:

Risk Assessment: Ensure you're comfortable with the risk level, especially with the small-cap funds, which can be volatile but offer high growth potential.

Goal Alignment: Make sure each fund aligns with a specific financial goal. For example, flexi-cap for long-term wealth creation, technology fund for growth in the tech sector, and small-cap funds for higher growth potential but with higher risk.

Portfolio Balance: It might be beneficial to review your portfolio's asset allocation periodically. Ensure you're not too heavily skewed towards one asset class, which can expose you to unnecessary risks.

Performance Review: Regularly monitor the performance of your funds. If a fund consistently underperforms its benchmark or peers, consider replacing it with a better-performing alternative.

Emergency Fund: Before investing, ensure you have an emergency fund set aside to cover 3-6 months of living expenses.

Professional Advice: Consider consulting with a financial advisor for personalized advice tailored to your financial situation and goals.

Overall, your portfolio seems diversified and aligned with your long-term goals. Regular monitoring and adjustments will help you stay on track towards achieving your financial objectives.

..Read more

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DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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