Sir, my age is 40; i have lump sum investment in following funds of 2.5 lakhs each which are now giving me 50% return in one year (invested in june 2020). i want to top of 50k every month so how much should i allocate fund for below this funds (i invest in shariah based funds)

tata ethical fund direct
Taurus ethical fund direct
invesco india infrastructure fund direct 
tata India pharma fund direct

Ans: achieving a target of 30 crores in 20 years is an ambitious goal that requires a thoughtful strategy. While it's tempting to focus solely on the numbers, remember to consider the journey of investing. Reflect on what this goal means to you and the life you envision for yourself and your loved ones.

Considering the long horizon, a disciplined approach to monthly investments can make a significant difference. It's not just about the amount but also about staying committed to your financial journey through market ups and downs.

Diversification across various asset classes can provide a balance between growth potential and risk mitigation. While equities often offer higher returns over the long term, don't underestimate the importance of having a well-rounded portfolio.

Lastly, investing is not just about chasing numbers. It's a tool to help you realize your dreams, aspirations, and the life you've imagined for yourself. So, as you embark on this journey, remember to enjoy the process and appreciate the milestones along the way.

Ans: To achieve a target corpus of 30 crores in 20 years, you'll need to invest a substantial amount regularly, considering your current portfolio of 30 lakhs. The specific amount you should invest per month or in lump sum will depend on various factors such as your risk tolerance, expected rate of return, and the investment vehicles you choose (mutual funds, stocks, etc.).

Keep in mind that these calculations should be based on certain assumptions and projections, and actual results may vary. It's also essential to regularly review and adjust your investment strategy based on changing market conditions and your financial situation.

Consulting with a financial advisor can provide personalized guidance and help you develop a comprehensive investment plan tailored to your specific goals, risk tolerance, and investment horizon. They can assist you in determining the most suitable investment vehicles and strategies to maximize your chances of reaching your target corpus.

Ans: It's wonderful to see your proactive approach to financial planning, especially considering your family's future needs and goals. Let's discuss how to allocate your investments to create a solid corpus for retirement, kids' education, and marriage:

• First, let's address your existing assets – your flat and plots. These are valuable assets that can contribute to your overall net worth.
• However, it's crucial not to rely solely on real estate for your investment portfolio diversification.

• With regards to your loans, it's advisable to prioritize paying off high-interest debts, like your loan with a 42 lakh balance.
• By reducing debt, you can free up more funds for investments and increase your financial flexibility.

• Now, let's focus on your monthly expenses, including your child's school fees and other living expenses.
• It's essential to budget wisely and ensure that your investment contributions don't compromise your day-to-day financial stability.

• Your existing investments in PPF, PF, NPS, and Sukanya are commendable. These provide a solid foundation for your financial future.
• You can continue contributing to these instruments while also exploring additional investment avenues to diversify your portfolio.

• Considering your investment horizon and risk tolerance, mutual funds offer an excellent opportunity for long-term growth.
• Your current SIP portfolio across different categories – large cap, mid cap, small cap, multi, and flexi cap – is well-diversified.

• As a Certified Financial Planner, I would suggest reviewing your asset allocation and ensuring it aligns with your financial goals.
• Allocate a portion of your monthly savings towards increasing your SIP contributions to mutual funds, aiming for a balanced mix across categories.

• Additionally, consider increasing your contributions to retirement-focused instruments like NPS, which offer tax benefits and long-term wealth accumulation.
• For your children's education and marriage goals, consider setting up separate SIPs or investment accounts dedicated to these objectives.

• Lastly, ensure you have adequate insurance coverage, including term insurance and health insurance, to protect your family's financial well-being.
• Regularly review your financial plan, adjust as needed, and stay committed to your long-term goals.

By following these steps and staying disciplined with your investments, you'll be well-prepared to achieve your financial aspirations and provide for your family's future needs. Keep up the good work, and remember that consistency and patience are key to success!

Ans: It's great to see your proactive approach to investing, especially at the age of 36. Investing through SIPs in mutual funds is a smart way to build wealth over the long term. Let's assess your current investment strategy and see if any adjustments are needed.

Firstly, investing in nine mutual funds might be excessive and could lead to over-diversification. Managing too many funds can be challenging and may not necessarily lead to better returns. It's generally recommended to have a focused portfolio with a smaller number of well-chosen funds.

Secondly, your portfolio seems to have a tilt towards mid-cap and small-cap funds, which can be riskier compared to large-cap funds. While these funds have the potential for higher returns, they also come with increased volatility. It's essential to ensure that your portfolio aligns with your risk tolerance and investment goals.

As a Certified Financial Planner, I suggest streamlining your portfolio by consolidating your investments into fewer funds that cover a broader spectrum of the market. Consider retaining one or two well-performing funds from each category (large-cap, mid-cap, small-cap, etc.) to achieve diversification while keeping things manageable.

Regarding allocation, it's crucial to align your investments with your risk profile and financial goals. A common approach is to allocate a higher percentage to large-cap funds for stability and then allocate smaller portions to mid-cap and small-cap funds for growth potential. However, the exact allocation would depend on factors like your risk tolerance, investment horizon, and overall financial situation.

I recommend consulting with a Certified Financial Planner who can conduct a detailed analysis of your financial goals and risk profile to provide personalized advice on asset allocation and fund selection.

In conclusion, while your initiative to invest through SIPs is commendable, refining your portfolio and asset allocation can optimize your returns and reduce unnecessary complexity.

Best Regards,

K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in

Ans: Understanding Your Current Portfolio
Firstly, congratulations on having a well-diversified mutual fund portfolio. With Rs 40 lakhs already invested, you have a good mix of large cap, mid cap, and small cap funds. Your current allocation is as follows:

Large Cap: 60%
Mid Cap: 32%
Small Cap: 4%
Your ongoing SIPs in various funds indicate a balanced approach. Let's now look at how to invest the additional Rs 60 lakhs you have.

Investment Strategy Overview
With Rs 60 lakhs to invest, and a need for Rs 20 lakhs in two years, the strategy must be two-pronged:

Short-Term (2 Years): Safe and liquid investments.
Long-Term (8-10 Years): Higher risk, potentially higher return investments.
Short-Term Investment (Rs 20 Lakhs)
For the Rs 20 lakhs needed in two years, prioritize capital preservation and liquidity. Consider the following:

Debt Mutual Funds: Low risk, stable returns, and high liquidity.
Liquid Funds: Excellent for very short-term needs, offering quick access to funds.
Short Duration Funds: Slightly higher returns than liquid funds, but with minimal risk.
Debt Mutual Funds
Debt mutual funds invest in fixed income securities. These are ideal for short-term goals. They offer safety and reasonable returns.

Liquid Funds
Liquid funds are low-risk, invest in short-term instruments. They provide quick access to your money, usually within a day.

Short Duration Funds
Short duration funds have a tenure of one to three years. They offer slightly higher returns than liquid funds, with minimal risk.

Long-Term Investment (Rs 40 Lakhs)
For the remaining Rs 40 lakhs, focus on growth-oriented investments. This includes a mix of equity mutual funds tailored to your risk tolerance and investment horizon.

Equity Mutual Funds
Equity mutual funds are designed for long-term growth. They invest in stocks and have the potential for high returns.

Large Cap Funds
Large cap funds invest in large, well-established companies. They are less volatile and provide steady growth.

Mid Cap Funds
Mid cap funds invest in medium-sized companies. They offer higher growth potential but with increased risk.

Small Cap Funds
Small cap funds invest in smaller companies. These funds can deliver high returns but are highly volatile.

Suggested Allocation
Based on your current portfolio and the need to balance growth and safety, here's a suggested allocation for the Rs 60 lakhs:

Short-Term (Rs 20 Lakhs)
Debt Mutual Funds: Rs 10 lakhs
Liquid Funds: Rs 5 lakhs
Short Duration Funds: Rs 5 lakhs
Long-Term (Rs 40 Lakhs)
Large Cap Funds: Rs 16 lakhs (40%)
Mid Cap Funds: Rs 12 lakhs (30%)
Small Cap Funds: Rs 8 lakhs (20%)
Flexi Cap Funds: Rs 4 lakhs (10%)
Evaluating Current Holdings
You have a robust portfolio with good fund choices. Let’s evaluate how the new investment can align with your existing holdings:

Large Cap Funds
Your 60% allocation in large cap funds is excellent for stability. Increasing this with the new Rs 16 lakhs ensures continued steady growth.

Mid Cap Funds
Your current 32% in mid cap funds aligns well with moderate risk appetite. Adding Rs 12 lakhs here maintains a balanced growth potential.

Small Cap Funds
Small cap exposure at 4% is quite conservative. Adding Rs 8 lakhs increases this to 10%, enhancing growth prospects while managing risk.

Flexi Cap Funds
Flexi cap funds offer flexibility to invest across market capitalizations. This can provide better returns with risk management. Allocating Rs 4 lakhs here diversifies your portfolio further.

Benefits of Actively Managed Funds
Actively managed funds have professional managers making investment decisions. This can lead to better performance compared to index funds, especially in volatile markets.

Disadvantages of Index Funds
Limited Flexibility: Index funds follow a fixed index and cannot adjust to market changes.
Average Returns: They aim to match the market, not outperform it.
Higher Market Risk: Entirely market-driven, exposing you to higher risk during downturns.
Benefits of Regular Funds
Investing through a Certified Financial Planner (CFP) provides several advantages over direct funds:

Expert Guidance: A CFP can help select the best funds based on your goals and risk tolerance.
Portfolio Monitoring: Regular reviews and rebalancing ensure your investments stay on track.
Access to Research: Professional advisors have access to detailed market research, aiding better decision-making.
Reviewing SIPs and New Lumpsum Investment
Your ongoing SIPs are in diverse funds, which is great for long-term wealth creation. The lumpsum investment can complement these SIPs, adding depth to your portfolio.

Assessing Existing SIPs
PP Flexi Cap: Provides flexibility across market caps, balancing risk and return.
Quant Midcap: Good for growth with moderate risk.
ICICI Bluechip: Stable returns from large cap stocks.
HDFC Less: Ensure this aligns with your goals; consider consulting your CFP.
Quant Small Cap: Adds aggressive growth potential.
Invesco India Contra: Contrarian approach can hedge against market trends.
Ideal Allocation Strategy
Combining your SIPs with the new lumpsum investment ensures a balanced, diversified portfolio. This approach maximizes growth potential while managing risk.

For Short-Term Needs
Invest Rs 20 lakhs in a mix of debt, liquid, and short duration funds. This ensures safety and liquidity for your immediate needs.

For Long-Term Growth
Invest Rs 40 lakhs in a diversified mix of large cap, mid cap, small cap, and flexi cap funds. This allocation supports growth while balancing risk.

Ongoing Portfolio Monitoring
Regularly reviewing your portfolio is essential. A Certified Financial Planner can help monitor performance and suggest adjustments as needed.

Regular Reviews
Quarterly Reviews: Ensure your investments align with market conditions.
Annual Rebalancing: Adjust your portfolio to maintain desired asset allocation.
Conclusion
Investing Rs 60 lakhs requires a thoughtful approach. Prioritizing safety for short-term needs and growth for long-term goals is key. Your current SIPs are well-chosen, and the new lumpsum investment complements them.

Benefits of Professional Guidance
A Certified Financial Planner can provide expert advice, ongoing monitoring, and access to detailed research. This enhances your investment strategy and helps achieve your financial goals.

Final Thoughts
Balancing safety and growth, diversifying investments, and regular monitoring are crucial. This strategy ensures your money works effectively for your financial future.

Best Regards,
K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in