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Nikunj Saraf  |308 Answers  |Ask -

Mutual Funds Expert - Answered on Dec 19, 2022

Nikunj Saraf has more than five years of experience in financial markets and offers advice about mutual funds. He is vice president at Choice Wealth, a financial institution that offers broking, insurance, loans and government advisory services. Saraf, who is a member of the Institute Of Chartered Accountants of India, has a strong base in financial markets and wealth management.... more
Joseph Question by Joseph on Dec 19, 2022Hindi
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I am 52 years old and currently investing in these below MF funds monthly SIPs.

Aditya Birla Sun Life Small Cap Fund Growth-Regular Plan – 3,000

AFGP - Axis Focused 25 Fund - REGULAR GROWTH- 20,000

EFGP - Axis Bluechip Fund - Regular Growth – 15,000

PREG - HDFC Hybrid Equity Fund - Regular Plan – Growth – 3,000

 ICICI Prudential Technology Fund – Growth – 5,000

Mirae Asset Large Cap Fund - Regular Growth Plan – 6,000

NIPPON INDIA SMALL CAP FUND - GROWTH PLAN GROWTH OPTION – 3,000

NIPPON INDIA SMALL CAP FUND - GROWTH PLAN GROWTH OPTION – 25,000

SBI Flexicap Fund - Regular Plan – Growth – 3,000

My Question is whether to continue these MF funds or any changes required? If changes required which one to go for?

Ans: Hi Joseph. Following an extensive analysis of your portfolio, I recommend reconsidering the schemes such as the Axis Bluechip Fund, Aditya Birla Sun Life Small Cap Fund and SBI Flexi cap fund along with a portfolio reshuffle. Also you may introduce large and midcap category in your portfolio. Some Suggested funds are:

  • Kotak Equity Opportunities Fund
  • Quant Active Fund
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  |7739 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 29, 2024

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I do have SIP going on below MFs from 2000 rs to 10000 rs in each MF. My monthly investment is 1 lakh. Most of them are from 2015 and a few of them were added in 2022. My age is 40 and my goal is to create wealth of 10cr in the next 10 years. I believe in aggressive growth. Should I continue investing in below MFs or need to replace them with different MFs? Aditya Birla Sun Life Frontline Equity Fund - Growth Aditya Birla Sun Life MNC Fund - Regular Plan - Growth Aditya Birla Sun Life Multi-Cap Fund - Regular Plan - Growth Axis Flexi Cap Fund - Regular Plan - Growth Axis Focused 25 Fund - Regular Plan - Growth DSP Small Cap Fund - Regular Plan - Growth Franklin India Smaller Companies Fund - Growth HDFC Mid-Cap Opportunities Fund - Growth ICICI Prudential Equity & Debt Fund - Growth L&T India Value Fund - Regular Plan - Growth Mirae Asset Large Cap Fund - Regular Plan - Growth Samco Flexi Cap Fund - Regular Plan - Growth ICICI Prudential Value Discovery Fund - Growth ICICI Prudential NASDAQ 100 Index Fund Direct Growth Edelweiss Balanced Advantage Fund - Growth Kotak Small Cap Fund - Growth DSP Quant Fund - Direct - Growth
Ans: Creating Wealth with Aggressive Mutual Fund Investments
your commitment to building a substantial corpus for the future is commendable. Let’s assess your current mutual fund portfolio and explore ways to achieve your goal of Rs. 10 crore in the next 10 years.

Evaluating Your Current Portfolio
Current Mutual Fund Investments
Aditya Birla Sun Life Frontline Equity Fund - Growth
Aditya Birla Sun Life MNC Fund - Regular Plan - Growth
Aditya Birla Sun Life Multi-Cap Fund - Regular Plan - Growth
Axis Flexi Cap Fund - Regular Plan - Growth
Axis Focused 25 Fund - Regular Plan - Growth
DSP Small Cap Fund - Regular Plan - Growth
Franklin India Smaller Companies Fund - Growth
HDFC Mid-Cap Opportunities Fund - Growth
ICICI Prudential Equity & Debt Fund - Growth
L&T India Value Fund - Regular Plan - Growth
Mirae Asset Large Cap Fund - Regular Plan - Growth
Samco Flexi Cap Fund - Regular Plan - Growth
ICICI Prudential Value Discovery Fund - Growth
ICICI Prudential NASDAQ 100 Index Fund Direct Growth
Edelweiss Balanced Advantage Fund - Growth
Kotak Small Cap Fund - Growth
DSP Quant Fund - Direct - Growth
Portfolio Analysis
Diversity and Overlap
Your portfolio consists of a mix of large-cap, mid-cap, small-cap, multi-cap, and value funds. While this diversity can reduce risk, there may be significant overlap in holdings, especially in large-cap funds.

Performance Evaluation
Evaluate the performance of each fund over different time periods. Check if they consistently outperform their benchmarks and peers. This analysis helps identify underperforming funds.

Risk Assessment
Given your aggressive growth strategy, higher allocation to mid-cap and small-cap funds is suitable. However, it's crucial to balance this with some large-cap and multi-cap funds for stability.

Recommended Changes
Reducing Overlap
To reduce overlap, consider consolidating similar fund types. For example, choose one or two large-cap funds instead of multiple. This approach streamlines your portfolio.

Focus on Consistent Performers
Retain funds with a strong track record of consistent performance. Replace underperforming funds with those having better potential. This strategy enhances overall portfolio performance.

Suggested Mutual Funds
Large Cap Funds
Large-cap funds invest in well-established companies. They offer stability and moderate growth.

Mid Cap Funds
Mid-cap funds target companies with high growth potential. They balance risk and reward effectively.

Small Cap Funds
Small-cap funds invest in emerging companies. They offer high growth potential but come with higher risk.

Multi Cap Funds
Multi-cap funds diversify across market capitalizations. They offer balanced risk and reward.

Value Funds
Value funds invest in undervalued companies. They provide growth potential through capital appreciation.

Investment Strategy
Monthly Investment Plan
With a monthly investment of Rs. 1 lakh, allocate funds as follows:

Large Cap Funds: Rs. 30,000
Mid Cap Funds: Rs. 30,000
Small Cap Funds: Rs. 20,000
Multi Cap Funds: Rs. 10,000
Value Funds: Rs. 10,000
Annual Review and Rebalancing
Review your portfolio annually. Rebalance to maintain the desired allocation. This approach ensures alignment with your goals and market conditions.

Risks and Benefits of Direct Investing
Disadvantages of Direct Funds
Direct funds may have lower expense ratios. However, they require active management. Without expert guidance, you may miss market opportunities or take on unnecessary risks.

Benefits of Regular Funds
Investing through a Certified Financial Planner offers several benefits. They provide professional management, regular monitoring, and timely adjustments to your portfolio. This approach can lead to better long-term performance.

Conclusion
your dedication to achieving your financial goals is impressive. By optimizing your mutual fund portfolio and investing consistently, you can build significant wealth. Ensure you review and rebalance your investments regularly to stay on track.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Hardik

Hardik Parikh  |106 Answers  |Ask -

Tax, Mutual Fund Expert - Answered on Apr 07, 2023

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ello Sir, I am 43 yrs of age and following is the list of my MF holdings which are all 15 Months Plus......Can you pls advice me if I should continue to remain Invested in the same or should I change any of these....I am looking at an aggressive and high return Funds in the next 3 Years....Also one very important point is all my Investments are thru an Agent, do you suggest i shud withdraw them all and go for Direct Plans.....Pls advice - SIP Details - CANARA ROBECCO EMERGING EQUITIES FUND – 10000 PGIM INDIA MID CAP OPPORTUNITIES FUND – 5000 ICICI PRUDENTIAL TECHNOLOGY FUND – 4000 SBI FOCUSED EQUITY FUND – 6000 QUANT ACTIVE FUND – 10000 MIRAE ASSET LARGE CAP FUND – 10000 INDIA INFOLINE - 5000 LUMPSUM Details - PGIM INDIA MID CAP OPPORTUNITIES FUND – REGULAR GROWTH – 3 LACS K1155 - KOTAK MULTICAP FUND – REGULAR PLAN GROWTH – 3 LACS AXIS MULTICAP FUND REGULAR PLAN GROWTH – 3 LACS IIFL FOCUSED EQUITY FUND – 4 LACS UTI FLEXI CAP FUND – 2.5 LACS MIRAE ASSET LARGE CAP FUND – 3 LACS LIC MF LARGE AND MID CAP FUND – 4 LACS CANARA ROBECCO BLUE CHIP EQUITY FUND – 3 LACS QUANT ACTIVE FUND – 2.5 LACS PARAG PARIKH FLEXI CAP FUND – 2.5 LACS
Ans: Hello Yatin,

Firstly, I appreciate that you've been consistently investing in mutual funds for more than 15 months. Based on your age and the 3-year investment horizon you mentioned, it's reasonable to have an aggressive investment strategy. However, I would also like to remind you that higher returns often come with higher risks.

Regarding your current holdings, I see that you have a well-diversified portfolio across large-cap, mid-cap, focused, and sectoral funds. Given your investment goals, you may consider continuing with most of these funds. However, I recommend reviewing the performance of the funds against their benchmark indices and their respective categories. You might want to consider replacing any underperforming funds with better-performing alternatives in the same category.

On the point of investing through an agent, I suggest you evaluate the benefits and drawbacks of switching to direct plans. Direct plans generally have lower expense ratios, which could result in higher returns over time. However, if you value the guidance and support provided by your agent, you might want to stick with the regular plans.

If you decide to switch to direct plans, you can do so without redeeming or selling your existing investments. You can start by converting your future SIPs to direct plans and then gradually switch your existing holdings.

Please note that this advice is based on the limited information you provided and should not be considered as personalized financial advice. I recommend that you consult with a certified financial planner or advisor for a detailed analysis of your portfolio and investment goals.

Wishing you the best in your investment journey!

..Read more

Ramalingam

Ramalingam Kalirajan  |7739 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 22, 2024

Money
Hi sir, i am 48 yrs working in pvt ltd co, having 75k / month salary, now i hv started MF SIP of 2000 in each like 1. HDFC Top 100 Fund - Regular Plan - Growth 2. Kotak Bluechip Fund - Growth (Regular Plan) 3. Tata Small Cap Fund - Regular Plan - Growth 4. HSBC Multi Cap Fund - Regular Growth 5. Motilal Oswal Midcap Fund - Regular Plan Growth 6.NIPPON INDIA MULTI ASSET FUND - GROWTH PLAN. Pl advise is it OK to continue for 10 yrs or change/add some other MF.
Ans: It's great to see that you're taking steps towards securing your financial future by investing in mutual funds. Starting SIPs is a wise choice. At 48 years old, planning for the next decade is crucial. Let’s assess your current SIPs and see if any adjustments are needed.

Understanding Your SIP Portfolio
Current SIP Investments
You have started SIPs in six mutual funds:

HDFC Top 100 Fund - Regular Plan - Growth
Kotak Bluechip Fund - Growth (Regular Plan)
Tata Small Cap Fund - Regular Plan - Growth
HSBC Multi Cap Fund - Regular Growth
Motilal Oswal Midcap Fund - Regular Plan Growth
Nippon India Multi Asset Fund - Growth Plan
Each SIP is for ?2,000 per month, making a total investment of ?12,000 per month. Let’s break down the advantages and areas of improvement.

Complimenting Your Efforts
Firstly, congratulations on your proactive approach to investing. Starting SIPs in a diverse range of funds is commendable. Your strategy shows a good mix of large-cap, mid-cap, small-cap, multi-cap, and multi-asset funds. This diversification helps in balancing risk and potential returns.

Analyzing Your Fund Choices
Large-Cap Funds
Large-cap funds like HDFC Top 100 and Kotak Bluechip invest in well-established companies. These funds are relatively stable and provide steady growth. It’s wise to have these in your portfolio for risk mitigation.

Mid-Cap and Small-Cap Funds
Mid-cap (Motilal Oswal Midcap Fund) and small-cap (Tata Small Cap Fund) funds have higher growth potential but also come with higher risk. Given your 10-year horizon, these can offer substantial returns. However, it’s important to monitor their performance regularly.

Multi-Cap Funds
Multi-cap funds like HSBC Multi Cap Fund invest across different market capitalizations. They provide diversification within a single fund, balancing risk and reward. This fund adds flexibility and adaptability to your portfolio.

Multi-Asset Funds
The Nippon India Multi Asset Fund invests in a mix of equities, debt, and other asset classes. This fund enhances diversification, providing a hedge against market volatility. It’s a good choice for stability and moderate growth.

Recommendations for Your Portfolio
Assessing Diversification
Your current selection shows good diversification across various types of funds. This reduces risk and capitalizes on growth opportunities in different market segments.

Regular Plan vs Direct Plan
Since you are using Regular Plans, you are paying a commission to distributors. Investing through a Certified Financial Planner (CFP) ensures you get professional advice, which is beneficial. However, be aware that Direct Plans have lower expense ratios. This means potentially higher returns due to lower costs, but they require more personal involvement in managing investments.

Benefits of Actively Managed Funds
Your funds are actively managed, which is good. Actively managed funds aim to outperform market indices through strategic decisions by professional fund managers. This can lead to higher returns compared to index funds, which simply mimic market performance.

Portfolio Rebalancing
Rebalancing your portfolio periodically is crucial. As you approach your retirement, gradually shifting towards less volatile investments is advisable. This ensures capital protection while still earning reasonable returns.

Risk Tolerance and Goals
Evaluate your risk tolerance and financial goals regularly. If your risk appetite decreases as you near retirement, consider reallocating more funds to large-cap or multi-asset funds for stability.

Action Plan for the Next 10 Years
Stay Informed
Continue educating yourself about market trends and mutual fund performance. Stay updated with economic changes that could impact your investments.

Monitor Performance
Regularly monitor the performance of your SIPs. Look at the returns, expense ratios, and fund manager’s performance. This helps in making informed decisions about continuing or switching funds.

Consult a Certified Financial Planner
Regularly consult with a Certified Financial Planner (CFP). They can provide personalized advice based on market conditions and your changing financial needs.

Increase SIP Amounts Gradually
As your salary increases, consider gradually increasing your SIP amounts. This will help you build a larger corpus over time without significantly impacting your current lifestyle.

Emergency Fund
Ensure you have an emergency fund in place. This should cover at least six months of your expenses. It provides a financial cushion during unforeseen circumstances without disrupting your investment strategy.

Health and Life Insurance
Maintain adequate health and life insurance. This ensures your financial plan remains on track even in case of health emergencies or unforeseen events.

Conclusion
Your current SIP portfolio is well-diversified and has a good mix of funds. Regular monitoring and periodic rebalancing will keep it aligned with your financial goals. Stay informed, consult with a Certified Financial Planner, and adjust your investment strategy as needed. By doing so, you can confidently work towards your retirement goal.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..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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