Hi i am 40 yrs of age and want to start with SIP of 15 k can you please suggest combination of some MFs.

Ans: Very first point to note is that when you write that you’re investing for 20 years, please do imbibe it into your thinking too that you’re in it for a very long term. Typically investors change their investing horizon as per the market conditions – if markets remain good, they’re long term players, if markets turn down, they start exiting in panic and become short term players. Please remember that markets will always give great returns only if you ‘spend time in the markets, rather than try timing the market’.

Since you’re just 37 years old, you have a huge age advantage (those younger have even more advantage!) – use it to your benefit. I have no idea about your other investments, your future financial goals and your risk profile (implying how much volatility are you comfortable with in the markets). So I’m just giving you a high-equity portfolio which is a long term portfolio but needs to be reviewed and maybe rebalanced every year. I’m also assuming that you have no other funds or equity.

The portfolio that I would suggest is:-
1. Large Cap - 20% of SIP amount - HDFC Index Fund
2. Flexicap – 20% - Parag Parikh Flexicap Fund
3. Midcap – 20% - Kotak Emerging Equity Fund
4. Aggressive Hybrid – 20% - Canara Robeco Equity Hybrid Fund
5. Small Cap – 20% - SBI Small Cap Fund

In the above portfolio, the last, Small Cap category, will be very volatile and you will need to get used to it. If you’re not up to its gyrations, stick to first four with 25% allocation each.

Ans: To reach your goal of 3.5 crore in 15 years, adjust your ongoing SIPs by increasing contributions to equity funds with proven track records. Allocate a significant portion to large-cap, mid-cap, and multicap funds for balanced growth potential. Consider increasing SIP amounts gradually, ensuring they align with your risk appetite and investment horizon. Regularly review and rebalance your portfolio to optimize returns and manage risk effectively. Consulting a financial advisor for personalized advice tailored to your specific needs and goals can be beneficial.

Ans: Dear Ghosal,

To achieve your goal of generating ?3.5 crore in 15 years through MF SIPs, consider increasing your SIP amounts and diversifying your portfolio. Allocate funds across equity and hybrid funds for growth potential and risk management. Suggested additions may include Axis Bluechip Fund, HDFC Mid-Cap Opportunities Fund, and ICICI Prudential Balanced Advantage Fund. Consult with a financial advisor for personalized recommendations tailored to your risk profile and investment objectives.

Best regards,
Ramalingam, MBA, CFP
Chief Financial Planner

Ans: Building Your Retirement Corpus and Closing Your Home Loan: A Two-Pronged Approach
Starting an SIP at 32 is a great decision! Let's analyze your current situation and suggest ways to achieve your goals:

Current SIPs:

Diversification: Your existing SIPs cover some diversification with a large-cap fund (Quant Active), tax-saving (Quant ELSS), and a debt fund (ICICI Prudential Corporate Bond).

Goal Alignment: Review if your existing SIP allocations are aligned with your goals. Consider increasing the debt fund SIP for your short-term goal (closing home loan).

Reaching Your Goals:

Retirement Corpus: Creating a ?1 crore corpus in a specific timeframe requires considering factors like investment horizon, risk tolerance, and expected returns. A CFP can help with calculations based on realistic assumptions.

Home Loan Closure: Generating ?30 lacs in 10 years is achievable with a focused approach. Debt funds and balanced funds can be suitable options, offering stability and some growth potential.

SIP Allocation and Increase:

Debt SIP Increase: Consider increasing your SIP in ICICI Prudential Corporate Bond Fund (or a similar debt fund) to accelerate your home loan closure.

New SIP for Retirement: Start a new SIP for retirement, focusing on equity funds with a longer investment horizon. Actively managed equity funds involve experienced fund managers who try to pick stocks to outperform the market. Actively managed funds come with higher fees compared to passively managed funds.

Risk Tolerance: Choose a mix of equity funds (large-cap, mid-cap) based on your risk tolerance. A CFP can help you determine the ideal asset allocation.

Professional Guidance:

Personalized Plan: A Certified Financial Planner (CFP) can create a detailed SIP plan considering your risk tolerance, financial goals, and existing investments. They can recommend specific debt and equity funds based on your needs and suggest appropriate SIP amounts for each goal.
Remember:

Regular Review: Review your SIPs (at least annually) to ensure they remain aligned with your evolving goals and risk tolerance.

Market Fluctuations: Equity markets are volatile. Stay invested for the long term to ride out market ups and downs.

By taking action now, diversifying your SIPs, and potentially seeking professional guidance, you can work towards achieving your financial goals!

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in