Hi , My age 47 yrs. started SIP in 2010 after watching CNBC TV started with 3000 in 3 fund and increased to 63000 in 16 fund for me and my wife. Accumulated 1 CR. till now. For my son education I Need 25 lac every year for 5 years from next year. I kept 5 lac emergency fund. PPF for family is 1.1 CR. No Fixed deposit. I have adequate Term and health Insurance. Equity 10 lac. Should I withdraw money from MF and put in FD or wait till next year considering volatility in market ?

Ans: Hello Rajesh Khanna. Based on the current diversification of your portfolio, I would recommend reconsidering HDFC Top 100 fund sip. As an additional option for 25 lakh investments, you may consider midcap, smallcap, flexicap, and large-cap funds.

Furthermore, you can invest via STP instead of the lump sum in order to benefit from future market volatility.

Ans: Assessing Your Mutual Fund Investments and Planning for the Future

Your portfolio demonstrates a disciplined approach to mutual fund investing over the years. Let's evaluate your current holdings and chart a course for future investments.

Analyzing Existing SIPs

HDFC Top 200, ICICI Prudential Large & Midcap, and Bandhan Flexicap Funds have been part of your investment journey for several years. These funds offer exposure to different market segments, providing diversification benefits.

BSL Frontline Equity Fund, while stopped in 2020, has a long track record of performance. It's essential to review the reasons for discontinuing this SIP and assess whether it aligns with your current investment strategy.

Mirae Asset Bluechip Fund and HDFC Flexi Cap Fund, initiated more recently, contribute to diversification and may offer growth potential.

Evaluating Performance and Suitability

Review the performance of each fund relative to its benchmark and peer group. Assess whether the fund manager's investment approach and strategy align with your risk tolerance and investment objectives.

Consider the consistency of returns, risk-adjusted performance, and fund management quality. Additionally, evaluate the fund's expense ratio and turnover ratio to ensure cost-effectiveness.

Deciding Whether to Continue or Exit

Continue SIPs in funds with consistent performance, robust fundamentals, and alignment with your investment goals.

Consider exiting funds that consistently underperform their benchmarks or peers, have experienced significant changes in fund management, or deviate from your risk profile.

Planning Additional Investments

Given your intention to invest an additional Rs. 15,000, consider the following options:

Increase SIP amounts in existing funds with proven track records and growth potential. This approach maintains continuity and capitalizes on the strengths of your current portfolio.

Explore new funds that complement your existing holdings and provide exposure to underrepresented sectors or asset classes. Conduct thorough research and seek professional advice to identify suitable options.

Seeking Professional Guidance

As a Certified Financial Planner, I recommend conducting a comprehensive portfolio review to ensure alignment with your financial goals and risk tolerance. Regular monitoring and periodic adjustments are essential to optimize your investment outcomes.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: At 38, with two daughters and a monthly salary of 50k, your commitment to investing for your family's future is commendable. Let's review your current SIP investments:

Aditya Birla Sun Life Digital India Fund: This fund offers exposure to the digital revolution, which can be a high-growth sector. Given the increasing digitalization trend, it's a promising choice for long-term growth.
ICICI Prudential Commodities Fund: Commodities can be volatile and subject to market fluctuations. While they offer diversification benefits, they may not be suitable for all investors due to their inherent risk.
Quant Small Cap: Small-cap funds can offer high growth potential, but they also come with higher volatility. They're best suited for investors with a high-risk tolerance and a long-term investment horizon.
Sukanya Samriddhi Yojana (SSY): This government-backed scheme is an excellent choice for securing your daughters' future education and marriage expenses. It offers tax benefits and guaranteed returns, making it a reliable investment option.
Given your financial responsibilities and investment horizon, it's essential to ensure that your portfolio is well-balanced and aligned with your risk tolerance. Consider consulting with a Certified Financial Planner who can assess your financial goals and recommend suitable investment options.

While your current SIPs show diversity, you may want to review the ICICI Prudential Commodities Fund due to its higher risk profile. Instead, you could consider adding a diversified equity fund or a balanced fund to your portfolio for stability and growth potential.

Remember, regular review and adjustment of your investment strategy are essential to ensure it remains in line with your financial goals and risk tolerance. With careful planning and professional guidance, you can build a robust investment portfolio that secures your family's future aspirations.

Ans: You are 32 years old and have been investing Rs. 6,000 per month through SIP for the last 5 years. Your current corpus is around Rs. 7 lakhs. Due to unstable income, you are considering withdrawing and reinvesting this amount for better returns.

Assessing Investment Options
You have Rs. 7 lakhs and need to invest it wisely. Let's evaluate some investment options that can offer good returns and suit your situation.

Investment Strategy
Emergency Fund
Before reinvesting, set aside an emergency fund. This fund should cover 6-12 months of expenses. An emergency fund provides financial stability during uncertain times.

Debt Mutual Funds
Invest a portion in debt mutual funds. These funds are less volatile and provide stable returns. They are suitable for short to medium-term goals and offer better returns than traditional savings accounts.

Diversified Equity Mutual Funds
Invest in diversified equity mutual funds. These funds spread your investment across various sectors. This reduces risk and enhances potential returns. Actively managed funds are preferable to index funds. They have the potential to outperform the market.

Balanced Funds
Balanced funds, also known as hybrid funds, invest in both equities and debt. They offer a good mix of safety and growth. Balanced funds can provide stable returns and reduce the risk of market volatility.

Systematic Transfer Plan (STP)
Use a Systematic Transfer Plan (STP). Transfer a fixed amount from your debt fund to an equity fund monthly. This approach mitigates market risk and ensures disciplined investment.

Rebalancing and Monitoring
Regular Review
Regularly review your investment portfolio. Assess performance and make necessary adjustments. This ensures your investments stay aligned with your financial goals.

Avoid Direct Funds
Direct funds might seem cost-effective but lack professional guidance. Invest through a Certified Financial Planner (CFP). A CFP can provide expert advice and help optimize your investments.

Tax Efficiency
Consider the tax implications of your investments. Equity mutual funds held for over a year qualify for long-term capital gains tax. Debt funds held for over three years benefit from indexation, reducing tax liabilities.

Final Insights
Emergency Fund: Set aside 6-12 months of expenses.

Debt Mutual Funds: Allocate a portion for stability.

Diversified Equity Mutual Funds: Invest for potential high returns.

Balanced Funds: Combine safety and growth.

Systematic Transfer Plan: Transfer funds systematically from debt to equity.

Regular Review: Monitor and adjust your portfolio.

Avoid Direct Funds: Seek professional guidance from a CFP.

Tax Efficiency: Consider tax implications and benefits.

By following this strategy, you can manage your current corpus effectively and achieve better returns despite an unstable income.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: Hi Rajan,

Good to know you planned investment for your son's education. There a few things to keep in mind when planning investment which are market linked.
The time horizon is very important to reap the benefit from the market linked investments. In your case your son is going to join college this year and than means you will need this money for his fees. Along with this the fund selection based on the risk profile.
There have been 2 things that seem to be of concern at this time - 1. Markets are bearish currently and 2. Not enough time to stay invested. Also the funds you have selected are of very high risk category and hence you may see higher impact in the fund value compare to the market.
If you still see a return of 19% as mentioned, I would recommend you to withdraw and for whatever time you have the money before utilizing it, do consider a low risk option of investment like Bank FDs.
This will provide safety and liquidity of your money when required.
All the best to your son for his future.

Thanks & Regards
Janak Patel
Certified Financial Planner.