I am 40 now. And I am investing in MF since 2018. But till 2020 it was irregular. Since 2021 I am regular on my investing. I presently have a MF invested amount is of around 3lacs(ELSS+Flexi+Momentum). My current XIRR is around 20%. And presently I am investing around 20k per month. Plus I have a NPS where I invest 5k per month(60% in equity). I want to know how can I build 5cr+ corpas by 55 years of age... I am also planning to start investing lumpsum of around 50k in gold every year. Please help me with a plan to aclhieve my goal.

Ans: It's great to see your commitment to building your investment portfolio. Let's review your current mutual fund investments and see if any adjustments are needed to align with your goal of accumulating a corpus of ?50 lakhs by the age of 40.
Your current allocation seems well-diversified across various mutual fund categories, including small-cap funds, ELSS tax savers, and sector-specific funds like SBI PSU and Aditya Birla Sunlife PSU equity funds. However, there are a few points to consider:
1. Small-Cap Funds: Investing in small-cap funds can offer high growth potential but comes with increased risk due to market volatility. Since you're relatively new to mutual fund investments, ensure you have a high risk tolerance and a long-term investment horizon for these funds.
2. ELSS Tax Saver Funds: It's wise to continue investing in ELSS funds to avail tax benefits under Section 80C. However, having multiple ELSS funds may lead to duplication of holdings and increase complexity without significantly diversifying your portfolio. Consider consolidating your ELSS investments into one or two funds with a proven track record and consistent performance.
3. Sector-Specific Funds: Funds like SBI PSU and Aditya Birla Sunlife PSU equity focus on specific sectors, which can be volatile and dependent on sectoral performance. While they offer the potential for high returns, they also carry higher risk. Ensure these funds complement your overall portfolio strategy and are not over-concentrated in a single sector.
4. PPF Investment: Investing in PPF is a good strategy for long-term wealth accumulation and tax-saving. However, keep in mind that PPF has a lock-in period of 15 years, so ensure it aligns with your liquidity needs and investment goals.
Considering the above points, here are some suggestions:
• Evaluate the performance of your existing funds and consider consolidating your ELSS investments into one or two funds with strong fundamentals and consistent performance.
• Monitor the performance of small-cap funds closely due to their higher volatility and consider rebalancing your portfolio if needed.
• Review your sector-specific fund investments periodically and ensure they align with your risk tolerance and investment objectives.
Lastly, it's essential to regularly review your investment portfolio and make adjustments as needed to stay on track towards your financial goals.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in

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

Ans: Das, at 40 years old, your monthly salary is Rs. 80k. Your monthly expenses are Rs. 40k. This leaves you with Rs. 40k for investments and savings.

Your current investments are:

PPF: Rs. 6 lakhs
NPS: Rs. 15 lakhs
FD: Rs. 14 lakhs
Your monthly NPS contribution is Rs. 18k, combining both your contribution and your employer’s.

Financial Goals
You aim to build a corpus of Rs. 3 crores in the next 20 years.

Assessment of Current Strategy
PPF
Your investment in PPF is good for long-term growth and tax benefits. It has a stable interest rate and risk-free returns.

NPS
Your NPS contributions are excellent for retirement planning. NPS offers tax benefits and market-linked returns, making it suitable for long-term growth.

Fixed Deposits
FDs are safe but offer lower returns compared to other investment options. Consider reallocating some of these funds for higher returns.

Recommendations for Improvement
Increase Equity Exposure
Equity investments have the potential for higher returns over the long term. Consider starting SIPs in equity mutual funds.

Diversify Investments
Diversifying your investments helps reduce risk. Apart from PPF and NPS, you can invest in mutual funds and bonds.

Adjust Fixed Deposits
FDs are low-return investments. Reallocate a portion of your FD corpus to mutual funds for better returns.

Consistent Review and Adjustment
Review your investments regularly. Make adjustments based on market conditions and your financial goals.

Mutual Funds
Equity Mutual Funds: Start SIPs in diversified equity mutual funds. These funds have higher growth potential.
Actively Managed Funds: Actively managed funds can outperform index funds due to professional management.
Retirement Planning
Your NPS contributions are excellent. Continue this for a stable retirement corpus. Additionally, allocate funds to mutual funds for diversified growth.

Emergency Fund
Ensure you have an emergency fund. This should cover 6-12 months of expenses and be kept in a liquid asset.

Tax Planning
Maximize your tax-saving investments. Ensure you are using instruments like PPF, NPS, and tax-saving mutual funds.

Final Insights
Your current investment strategy is solid, but can be improved. Increase your equity exposure for higher long-term returns. Diversify your investments to reduce risk. Review and adjust your portfolio regularly.

Start SIPs in equity mutual funds and consider reallocating some FD funds to higher return investments. Maintain an emergency fund and maximize tax-saving investments.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in