Please advise regarding the following portfolios.

No investments in ICICI Pru Tax Saver Fund for the last four years; only in Axis Tax Saver and DSP Tax Saver.

All funds are regular growth, except debt funds.

Risk appetite is moderate.

Portfolio 1 -- investor age, 35 years

Axis Blue Chip

Axis Long Term Equity

Canara Robeco Focused Fund

DSP Flexi Cap

HDFC Balanced

HDFC Flexi

ICICI Pru Tax Saver

Mirae Asset FANG+ NYSE ETF

Nippon India Pharma

Portfolio 2 -- investor age, 61 years

Axis Banking & PSU Debt

Axis Bluechip

Axis Growth Opportunity Fund

Axis Long Term Tax Saver

Edelweiss Balanced Advantage

ICICI Pru Corporate Bond

ICICI Pru Long Term Tax Saver

SBI Magnum Gilt Long Term Fund

Portfolio 3 -- investor age, 31 years

Axis Bluechip

DSP Tax Saver

ICICI Pru Tech, Growth

ICICI Long Term Tax Saver

Nippon India Pharma

Parag Parikh Flexi Cap

SBI Banking & Financial Service Plan, Regular Growth

Portfolio 4 -- investor age, 65 years

Axis Bluechip

Axis Long Term Tax Saver

Mirae Asset Emerging Bluechip

Mirae Asset Large Cap

ICICI Pru Long Term Equity Tax Saver

Portfolio 5 -- investor age, age 27 years

Axis Bluechip

Axis Long Term Tax Saver

Parag Parikh Flexi Cap

Tata Banking And Financial Services Fund

Tata Digital India

Tata India Pharma & Healthcare

Ans: The funds are decent; however, there are too many funds in large cap; these can be consolidated

Ans: Hi Amit and thanks for writing to me. The funds you invest in are good funds and you can continue to invest in them.

Ans: Tax saver funds are the schemes that helps investor save tax under Section 80C of the Income Tax Act, 1961, but have a lock-in period of 3 years. Hence, you can reduce your contributions to tax savings fund to the extent you need the deduction. It is also suggested to change the option from IDCW to Growth from a taxation standpoint. You can continue to invest in HDFC TOP 100 Fund and it is also suggested to change the option from IDCW to Growth module. Further, you can evaluate adding a midcap fund if you have the risk appetite.

Ans: Good Morning,

You have built a commendable and diversified investment portfolio at a young age. This proactive approach to investing sets a solid foundation for your future financial goals. Let’s review and assess your portfolio to ensure it aligns with your objectives.

Overview of Your Portfolio
Your portfolio includes a mix of tax-saving funds, large-cap, mid-cap, and small-cap funds, which is a balanced approach to long-term wealth creation. Here is a summary of your investments:

Mirae Asset Tax Saver: 4,500 rupees
Tata ELSS: 3,000 rupees
Parag Parikh Flexi Cap: 3,000 rupees
Mirae Asset Large & Mid Cap: 2,000 rupees
SBI Small Cap: 6,500 rupees
Axis Small Cap: 3,000 rupees
You are also doing step-up SIPs, which is an excellent strategy for increasing your investment amount over time and leveraging the power of compounding.

Assessment and Recommendations
Strengths of Your Portfolio
Diverse Fund Selection:

Your portfolio includes ELSS funds, which offer tax benefits under Section 80C.
The mix of large-cap, mid-cap, and small-cap funds provides balanced exposure across different market capitalizations.
Flexi-cap funds like Parag Parikh Flexi Cap offer flexibility to move across market caps based on market conditions.
Step-up SIPs:

Increasing your SIP amount periodically helps in combating inflation and increasing your investment corpus over time.
Areas for Improvement
Overweight in Small Caps:

You have significant exposure to small-cap funds (SBI Small Cap and Axis Small Cap). Small-cap funds can be highly volatile and risky, especially during market downturns.
Consider reducing exposure to small caps slightly to mitigate risk. Reallocate these funds to more stable large-cap or balanced funds.
ELSS Funds Allocation:

Your investment in ELSS funds (Mirae Asset Tax Saver and Tata ELSS) is good for tax saving, but ensure it aligns with your tax-saving needs.
Evaluate if the current allocation meets your Section 80C limit and adjust if necessary.
Review Fund Performance:

Regularly review the performance of each fund in your portfolio. While you have chosen reputable funds, market dynamics change, and fund performance can vary.
If any fund consistently underperforms, consider replacing it with a better-performing alternative.
Portfolio Rebalancing:

Periodically rebalance your portfolio to maintain the desired asset allocation. This ensures that your investment strategy stays aligned with your financial goals and risk tolerance.
Suggested Adjustments
Increase Allocation to Large-Cap and Balanced Funds:

Consider increasing your investment in large-cap or balanced funds. These funds tend to be more stable and less volatile compared to small-cap funds.
Maintain Diversification:

Continue diversifying across different fund types and market capitalizations to spread risk and maximize potential returns.
Monitor and Adjust Step-up SIPs:

Keep increasing your SIP amounts regularly. Ensure that the increments are sustainable and align with your income growth.
Long-Term Strategy
Stay Invested for the Long Term:

Continue your disciplined investment approach. Staying invested for the long term will help you ride out market volatility and benefit from compounding.
Regular Reviews with a Certified Financial Planner (CFP):

Schedule regular reviews with a CFP to ensure your portfolio remains aligned with your financial goals. A CFP can provide tailored advice and adjustments based on market conditions and personal circumstances.
Emergency Fund and Insurance:

Ensure you have an adequate emergency fund and proper insurance coverage. This will protect your investments from being liquidated during emergencies.
Conclusion
Your portfolio is well-diversified and positioned for growth. By making minor adjustments, increasing stability, and regularly reviewing your investments, you can continue to build wealth effectively.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in