I have been following your articles rigorously and I would highly appreciate it if you can provide your valuable feedback.

I am 30 years of age and my monthly compensation is 2L. I have recently started investing in MF. I don't have any loan/EMI and my ongoing SIP is Rs 60,000.

I have an appetite for moderate-high risk. 

Further, I have savings of 15L which I want to invest in a lump sum and need a substantial return in the next 3-5 years with low-moderate risk

Below is my portfolio: 

Parag Parikh Flexi Cap -- 25k

Canara Robecco bluechip equity -- 15k

Quant Tax Plan -- 5k

Quant Active Fund -- 10k

Canara Robeco Small Cap -- 5k

Kindly advise whether to hold, redeem or change with new funds. Thanks.

Ans: Hi Rohan Das. Considering your requirements and risk appetite, your portfolio is well-positioned. Since you have already invested in Axis Bluechip and AMC diversification is also essential, I recommend investing in schemes other than Axis Mid Cap Fund.

The amount of your SIP can be increased up to 25k based on your child's educational goals.

Ans: Let's analyze your portfolio and provide recommendations based on your aggressive investment stance and the desire for high returns over the next three years.

Portfolio Review:

You have a well-diversified portfolio with exposure to various equity categories, which is a good approach for long-term growth. Given your aggressive stance, let's assess your holdings:

Equity Funds:
You have exposure to large-cap, mid-cap, focused equity, technology, and flexi-cap funds. This diversification can potentially balance risk and return, but you might consider focusing more on aggressive funds for higher growth.
Direct vs. Regular Plans:
Investing through an agent (Regular Plans) involves a higher expense ratio due to commissions. While Direct Plans can reduce costs, your relationship with a trusted Mutual Fund Distributor (MFD) who provides personal emotional support can add value beyond just financial advice.
Recommendations:

Continue with Regular Plans through a Trusted MFD:
Given your aggressive stance and the emotional support you receive from your MFD, continuing with Regular Plans through your trusted MFD can align well with your investment goals. A supportive MFD can offer personalized advice, emotional reassurance, and keep you informed about market developments.
Focus on Aggressive Funds:
Emphasize funds with a proven track record of aggressive growth and high returns. Your MFD can help identify and recommend funds that align with your risk appetite and investment horizon.
Periodic Reviews with Emotional Support:
Schedule regular reviews with your MFD to evaluate your portfolio's performance and make necessary adjustments. A supportive MFD can offer emotional support during market fluctuations, helping you stay disciplined and confident in your investment decisions.
Build a Strong Relationship with Your MFD:
Embrace the relationship with your MFD who understands your financial goals, concerns, and provides emotional support. A strong relationship can enhance your investment experience, making it more reassuring and enjoyable.
Conclusion:

Given your aggressive stance and the importance of emotional support in your investment journey, continuing with Regular Plans through your trusted MFD seems suitable. Focus on aggressive funds, maintain regular reviews with your MFD, and nurture your relationship with them for personalized advice and emotional reassurance. Remember, investing is not just about numbers; it's about peace of mind, trust, and confidence in your investment decisions. Embrace this journey with your MFD by your side, and may your investments flourish over time.

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!

Ans: Investing Rs. 5.5 lakhs monthly across 11 funds is impressive. Your aggressive approach matches your 10-15 years horizon. Let’s analyse your portfolio and suggest improvements.

Strengths of Your Current Portfolio
Well-Diversified Across Categories: Your funds span large-cap, mid-cap, small-cap, and flexi-cap categories.

Aligned with Aggressive Strategy: The portfolio leans towards mid-cap and small-cap funds. These suit long-term aggressive investors.

Consistent Contributions: High SIP commitment ensures disciplined wealth creation over time.

Areas of Concern
Over-Diversification: Investing in 11 funds dilutes potential returns. Similar categories may overlap.

Direct Funds Approach: Direct plans lack professional guidance for portfolio review and rebalancing.

Small-Cap Heavy Allocation: Multiple small-cap funds increase risk in volatile markets.

Multiple Multicap Funds: Holding three multicap funds may result in duplication of stocks.

Suggestions for Portfolio Optimisation
Limit the Number of Funds
Reduce the number of funds to 5-7. This avoids over-diversification.

Retain one strong performer from each category: large-cap, mid-cap, small-cap, flexi-cap, and multicap.

Avoid Category Duplication
Retain only one fund each in small-cap, mid-cap, and multicap categories.

Choose funds with consistent past performance and fund house credibility.

Focus on Actively Managed Funds Through MFD
Direct funds lack professional advice.

Investing through an MFD with a Certified Financial Planner ensures expert guidance.

MFDs monitor market conditions and align your portfolio for optimal returns.

Reassess Risk Allocation
Small-cap funds should be limited to 10-15% of your portfolio.

Mid-cap funds can constitute 25-30% for higher growth potential.

Allocate 25-30% to large-cap or flexi-cap funds for stability.

Periodic Review and Rebalancing
Review your portfolio every six months or annually.

Rebalance to maintain your desired asset allocation.

Track fund performance and exit underperformers promptly.

Tax Implications to Consider
Long-term capital gains above Rs. 1.25 lakh attract 12.5% tax.

Short-term gains are taxed at 20%.

Diversifying across equity and hybrid funds can optimise tax outflow.

Benefits of Reduced Fund Count
Simplified portfolio management.

Improved tracking of individual fund performance.

Higher potential for compounding due to concentrated allocation.

Recommended Allocation for Aggressive Investors
Large-Cap/Flexi-Cap Funds: Stability with market participation.

Mid-Cap Funds: Balance between risk and growth.

Small-Cap Funds: High-risk, high-reward potential.

Multicap Funds: Flexible allocation across market capitalisations.

Final Insights
Your portfolio reflects strong financial discipline and long-term vision. However, over-diversification dilutes growth. Streamline your funds for focused performance. Professional guidance ensures optimal fund selection and timely rebalancing. Stick to your SIPs to achieve your financial goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment