sir, am 26 year old and have some SIPs for Rs 1000 each.
1. QUANT SMALL CAP FUND DIRECT
2. NIPPON INDIA LARGE CAP DIRECT
3. MIRAE ASSEST ELSS TAX SAVER
4. UTI NIFTY 50
5. PARAG PARIKH FLEXI CAP
6. TATA MIDCAP GROWTH DIRECT
7. TATA SMALL CAP DIRECT
my question is, these are good SIPs for next 10-15 years ?
second is i want to invest 10000 more per month, please let me know which SIPs will be good for next 15 years. Thanks
Ans: At age 26, it is appreciable that you have started investing early.
It shows responsibility towards your future financial goals.
Your current SIPs are diversified across multiple categories.
But some of these SIPs may not be aligned well for long-term consistency.
Let us now review each one professionally.
1. Quant Small Cap Fund - Direct
Small caps can be volatile.
This fund is aggressive and high-risk.
Direct plans have no guidance or monitoring.
This may affect long-term performance.
Switching to a regular plan with a Certified Financial Planner is better.
This will ensure proper guidance and rebalancing.
2. Nippon India Large Cap - Direct
Large caps offer stability in a portfolio.
However, this fund’s long-term consistency is not very strong.
Also, direct plans lack expert monitoring.
A regular plan through a CFP ensures better handholding.
Tracking and performance review becomes easier.
3. Mirae Asset ELSS Tax Saver
This fund is decent for tax saving.
It is diversified and has shown fair returns.
However, regular review is still needed.
A regular plan helps with documentation and timely alerts.
Switching to regular mode can be beneficial in the long run.
4. UTI Nifty 50 - Direct
This is an index fund.
Index funds only mirror the market.
They do not aim to beat the market.
They lack human intelligence and flexibility.
They don’t perform well during corrections or sideways markets.
Actively managed funds have higher potential.
They can outperform in changing market situations.
Consider replacing this with a well-managed large cap fund.
In regular plan through CFP, you get guided fund selection.
5. Parag Parikh Flexi Cap
Flexi cap funds provide flexibility across market segments.
This fund has been popular recently.
But it has higher exposure to international stocks.
This brings currency risk and regulatory risks.
Also, it may overlap with other holdings.
You should regularly monitor for overlap and concentration.
Again, direct mode has no professional review.
6. Tata Midcap Growth - Direct
Midcaps are good for long-term.
But they need close tracking due to higher volatility.
A regular plan with expert guidance is ideal.
Direct mode will not help during market correction periods.
Switching to regular mode will ensure ongoing support.
7. Tata Small Cap - Direct
Small caps are risky in short to medium term.
This should not be your core holding.
Should be allocated only with close guidance.
Again, direct plans can go off-track without support.
If unmanaged, can bring portfolio imbalance.
Assessment of Direct Funds: Key Concerns
Direct funds may look cheaper in expense.
But they lack professional support and review.
There is no monitoring of changes in fund quality.
You may miss timely exits and rebalancing.
A Certified Financial Planner guides with logic and analysis.
They also help align your funds with your goals.
Regular plans have MFD support and rebalancing discipline.
They protect from behavioural mistakes during market volatility.
Overall, regular funds with expert guidance bring higher net value.
What Can Be Done with Your Existing SIPs?
You can consider the following changes:
Discontinue index fund (UTI Nifty 50) SIP.
Reduce exposure to direct small and midcap funds.
Switch from direct plans to regular plans via a Certified Financial Planner.
Ensure SIPs are part of a professionally constructed portfolio.
Ensure proper asset allocation, fund category balancing and tax efficiency.
New SIP of Rs 10,000 per Month – Suggestions
For your new Rs 10,000 monthly SIP, here is a 360-degree plan:
Allocate across diversified categories.
Ensure each fund has low overlap and different market focus.
Invest in 3 to 4 funds max.
All in regular mode with CFP-led support.
Avoid index funds, as they only match market returns.
Go for actively managed funds with proven history.
Include large-cap, mid-cap and flexi-cap mix.
Monitor quarterly with your Certified Financial Planner.
Additional Guidance for 15-Year Wealth Building
At 26, your time horizon is excellent.
But long-term wealth creation needs more than just SIPs.
It needs strategy and discipline.
Below are key steps for a full-circle approach:
Set clear financial goals: Home, car, retirement, child education etc.
Link SIPs to each goal separately.
Keep emergency fund in place (6 months expenses).
Get sufficient life and health insurance (pure protection plans).
Avoid investment-cum-insurance products.
They give low returns and poor insurance.
Do not mix insurance with investment.
Track your SIP performance annually.
Rebalance if some funds underperform.
Maintain asset allocation: Equity, Debt and Liquid.
Avoid emotional reactions during market dips.
Stay invested with guidance from your CFP.
Be aware of taxation rules on equity and debt funds.
LTCG on equity above Rs 1.25 lakh is taxed at 12.5%.
STCG on equity is taxed at 20%.
Debt fund gains are taxed as per income slab.
Regular plan MFD and CFP helps with all tax planning.
What Not to Do in the Next 15 Years
Don’t invest in index funds.
They lack active strategy.
Don’t choose funds by past returns only.
Don’t use direct funds without financial expertise.
Don’t invest in real estate for returns.
Don’t invest in annuity products for retirement.
Don’t mix investment and insurance.
Don’t make decisions based on short-term news or noise.
Don’t stop SIPs during market corrections.
Role of a Certified Financial Planner
A Certified Financial Planner helps you:
Set goals based on life stages.
Create custom SIP and lump sum plans.
Select the best active funds for your goals.
Rebalance annually to stay on track.
Plan taxes as per latest rules.
Protect wealth with right insurances.
Build retirement with strategic planning.
Create a total financial blueprint for life.
Keep emotions out of financial decisions.
Final Insights
You have taken a great step by starting early.
But choosing the right funds is key.
More important is monitoring them regularly.
Direct plans lack this important support.
Switching to regular plans under CFP brings value.
Also, add Rs 10,000 new SIP with proper strategy.
Don’t follow trends.
Stay committed and review annually.
Avoid overlapping funds and unnecessary risks.
Have a complete financial roadmap in place.
You are building your future.
Make each rupee work with expert guidance.
This 360-degree approach will lead to better outcomes.
You will be financially secure and confident.
Take the next steps with clarity and care.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
Question by Arun on Sep 20, 2023Hindi
