I am 40 years and I invested in an International Equity Mutual Fund to have some global exposure in my portfolio with the below investment details.

Mirae Asset NYSE FANG+ ETF FoF-- 1.25L -- Dec-21

But this fund is currently giving me -40% Return and performing the lowest in its category from last 3 months. As any new investment in US funds has been stopped for some time now AUM of this fund has come down to 692 Cr. Please suggest if I should hold or Stop the loss and sell it.

Ans: Kindly continue; markets are in corrective mode therefore the returns presently may not look good, however the funds are decent.

For SIPs you may consider a couple of schemes from:

1. UTI flexi cap fund – Growth.     
2. Parag Parikh Flexi cap - Growth 
3. Samco Flexi Cap – Growth
4. Axis Esg Equity Fund  Growth
5. Hdfc Index Fund - Sensex Plan - Growth

Ans:

Ans: Hello Vikas. If you are investing for long run say 7-10 years. I would recommend to reconsider both mentioned schemes to better peer schemes. You may consider multicap and mid cap categories for your portfolio.

Ans: I understand you're concerned about your Edelweiss Technology Fund investment going down. Market fluctuations are normal, so let's take a step back and assess!

Focus on Long-term: Did you choose this fund for a long-term goal (like retirement)? Short-term dips shouldn't derail your plan if the fund aligns with your goals.

Review Investment Plan: Did you discuss your risk tolerance with a Certified Financial Planner (CFP)? Technology funds can be volatile, so ensure it matches your risk profile.

Stay Calm & Diversified: Don't panic-sell! A diversified portfolio helps manage volatility. Consider this a learning experience.

If you're unsure, consulting a CFP can help. They can assess your entire portfolio and recommend if switching funds is suitable for your situation.

Remember, patience is key in investing!

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: First of all, congratulations on your investment journey. You've done an excellent job in building a diverse portfolio. It's impressive to see how your investments have grown over time. Now, let's evaluate the current scenario and decide the best way forward.

Current Portfolio Overview
Your investment portfolio includes various funds:

A significant investment in a technology-focused fund, which has shown substantial growth.

Holdings in a flexi-cap fund, infrastructure fund, large-mid cap index, equity opportunities fund, and small cap fund.

This diversification is a positive sign. It shows you are spreading your risk across different sectors and types of funds.

Analyzing the Technology-Focused Fund
The technology-focused fund you mentioned has performed exceptionally well. From Rs 48.49k to Rs 72.13k, that's an impressive increase. This fund’s closure to new investments often indicates that it has reached a substantial size or the fund house wants to manage it efficiently.

Given its closure, let's consider your options.

Pros of Staying Invested:

Potential for Continued Growth: Technology stocks, especially the leading ones, have shown resilience and growth potential.

No Immediate Need for Action: If you believe in the long-term potential of the technology sector, staying invested might be wise.

Cons of Staying Invested:

Market Volatility: Technology stocks can be volatile. Recent trends show fluctuations, which might affect returns.

Concentration Risk: A large portion of your growth is tied to this sector. Diversification might be safer.

Pros of Systematic Withdrawal Plan (SWP):

Regular Income: SWP can provide a steady income stream. Useful if you need liquidity.

Rebalancing Opportunity: You can reinvest in other sectors or funds to balance your portfolio.

Cons of Systematic Withdrawal Plan (SWP):

Missing Out on Growth: If the technology sector continues to grow, you might miss out on future gains.

Tax Implications: SWP might have tax consequences depending on your holding period.

Assessing Your Other Funds
Now, let’s look at your other investments.

Flexi Cap Fund:

Pros: These funds invest across market caps, providing flexibility and diversification. Your substantial investment here shows confidence in this strategy.

Cons: Returns can vary depending on market conditions. It's essential to monitor the fund’s performance regularly.

Infrastructure Fund:

Pros: Infrastructure development in India offers growth potential. This sector is crucial for economic development.

Cons: These funds can be cyclical. They might underperform during economic downturns or policy changes.

Large-Mid Cap Index Fund:

Pros: Index funds offer broad market exposure and lower expense ratios.

Cons: They mimic the index performance, lacking the potential for outperformance that actively managed funds might offer. Your investment here might limit growth potential compared to active funds.

Equity Opportunities Fund:

Pros: These funds can take advantage of market opportunities, offering potential for higher returns.

Cons: Higher risk due to active management. Performance depends on the fund manager's skill.

Small Cap Fund:

Pros: Potential for high returns. Small cap stocks can grow significantly over time.

Cons: Higher risk and volatility. Small cap stocks can be affected by market conditions more than large caps.

Direct vs Regular Funds
You mentioned investing through direct funds. Let’s discuss the disadvantages of direct funds and the benefits of regular funds through a Certified Financial Planner (CFP).

Disadvantages of Direct Funds:

Lack of Guidance: Direct funds require you to research and choose funds on your own. Without expert guidance, this can be risky.

Time-Consuming: Regular monitoring and rebalancing are necessary. It can be time-consuming and challenging without professional help.

Benefits of Regular Funds:

Professional Advice: Investing through a CFP ensures you get expert advice tailored to your financial goals.

Portfolio Management: CFPs can help in regularly monitoring and rebalancing your portfolio, ensuring it remains aligned with your objectives.

Strategic Recommendations
Based on the analysis, here are some strategic recommendations:

Rebalancing Your Portfolio:

Diversification: Consider diversifying away from technology to other sectors with growth potential. It will reduce concentration risk.

Risk Management: Rebalance your portfolio to align with your risk tolerance and investment goals.

Consider SWP for Liquidity:

Partial SWP: You might opt for a partial SWP from your technology-focused fund. It provides liquidity while keeping some exposure to potential growth.

Reinvestment Strategy: Use the SWP proceeds to invest in other funds or sectors, balancing your portfolio.

Monitoring and Regular Review:

Regular Check-Ups: Keep an eye on your investments. Regular reviews ensure your portfolio remains aligned with your goals.

Adjust as Needed: Be ready to adjust your investments based on market conditions and personal circumstances.

Final Insights
Your investment journey has been commendable. The growth in your technology-focused fund is impressive. However, it's essential to consider the risks and potential rewards of staying invested or opting for an SWP. Diversification and regular portfolio review are crucial for long-term success.

Consider the benefits of professional guidance through regular funds. It can provide the expertise and peace of mind necessary for achieving your financial goals. Rebalancing your portfolio and ensuring it aligns with your risk tolerance will help in navigating market fluctuations effectively.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in