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Ramalingam

Ramalingam Kalirajan  |8511 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 02, 2024

Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more
Anji Question by Anji on Feb 27, 2024Hindi
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Hi, below are the funds currently i am investing in. Please let me know any additions/deletions are required for diversification ? 1.Quant smallcap 2.Paragh parokh flexi cap 3. nippon multicap 4.HDFC Balanced advantage fund

Ans: Based on your current portfolio, you have exposure to small-cap, flexi-cap, multi-cap, and balanced advantage funds, which provides diversification across different market segments and investment styles. However, it's essential to periodically review your portfolio to ensure it remains aligned with your investment goals, risk tolerance, and market conditions.

Consider assessing the performance and outlook of each fund, as well as evaluating your overall asset allocation strategy. Depending on your analysis and any changes in your financial situation or objectives, you may choose to make additions or deletions to your portfolio to enhance diversification or address specific investment needs.

Consulting with a financial advisor can provide valuable insights and help tailor your investment strategy to meet your objectives effectively.
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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Ramalingam

Ramalingam Kalirajan  |8511 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 25, 2024

Asked by Anonymous - Jun 11, 2024Hindi
Money
Hi, my age is 35 and currently i am investing 50000 in following four funds. 1. Uti nifty 50 index ->15k 2.parag parikh flexi->15k. 3. Tata small cap->10k. 4. Kotak Opportunities large & midcap fund-->10k. Any suggestions on diversification or allocation? Also can you please suggest if i need to add multi cap , mid cap or any internation mf?
Ans: It’s fantastic that you’re proactively investing and seeking advice on your portfolio. At 35, you’re in a great position to build wealth for the future. Your current investment of Rs 50,000 per month across four mutual funds shows a good start, but there’s room for fine-tuning. Let’s explore your portfolio, discuss diversification, and consider adding other funds to achieve your financial goals.

Evaluating Your Current Portfolio
Let’s first assess the funds you’re currently investing in:

UTI Nifty 50 Index Fund (Rs 15,000)

Nature: This is an index fund that replicates the Nifty 50 index.
Advantages: Offers low-cost exposure to the top 50 companies in India.
Disadvantages: Limited to market returns, lacks flexibility in management.
Parag Parikh Flexi Cap Fund (Rs 15,000)

Nature: This is a flexi-cap fund, investing across market capitalizations and geographies.
Advantages: Provides diversified exposure, including international stocks.
Disadvantages: Can be volatile due to exposure to multiple markets.
Tata Small Cap Fund (Rs 10,000)

Nature: Focuses on small-cap companies with high growth potential.
Advantages: Can provide high returns in the long term.
Disadvantages: Higher risk and volatility compared to large-cap or diversified funds.
Kotak Opportunities Large & Mid Cap Fund (Rs 10,000)

Nature: Invests in both large-cap and mid-cap stocks, aiming for growth.
Advantages: Balances growth potential with stability.
Disadvantages: Mid-caps can add to volatility, though less than small-caps.
Assessing Your Portfolio’s Diversification
Diversification is key to managing risk and achieving balanced growth. Let’s evaluate how diversified your portfolio is:

Equity Exposure: Your current investments are all in equity funds, which is good for growth but can be volatile.

Market Capitalization: You have exposure to large-cap (index and opportunities fund), mid-cap (opportunities fund), and small-cap (Tata Small Cap). This is a good spread across different market capitalizations.

Geographical Diversification: The Parag Parikh Flexi Cap Fund provides some international exposure, which is beneficial for risk management and tapping into global growth.

Suggestions for Improved Diversification
To further enhance your portfolio, consider these suggestions:

1. Increase Diversification with Multi-Cap Funds
Multi-cap funds invest across large, mid, and small-cap stocks. They offer flexibility and balanced exposure to all market segments.

Why Add Multi-Cap Funds? They adapt to market conditions and offer a mix of stability and growth.
Allocation Suggestion: Consider allocating part of your investments to a multi-cap fund to enhance diversification.
Potential Change: You could redirect some of your investment from the UTI Nifty 50 Index Fund to a multi-cap fund. This way, you get managed exposure across various market caps.

2. Consider Adding a Mid-Cap Fund
Mid-cap funds invest in companies that are between large-cap and small-cap in terms of market size.

Why Add Mid-Cap Funds? They offer higher growth potential than large-caps with less risk than small-caps.
Allocation Suggestion: Adding a mid-cap fund could balance the high-risk, high-reward nature of small-cap funds with the stability of large-caps.
Potential Change: You might allocate Rs 10,000 from your current investments to a dedicated mid-cap fund. This complements your large-cap and small-cap exposure.

3. Review the Need for an International Fund
While Parag Parikh Flexi Cap provides some international exposure, a dedicated international fund could give more focused global diversification.

Why Add an International Fund? It provides direct exposure to global markets and currencies, diversifying risks associated with the Indian market.
Allocation Suggestion: Consider a small portion, like Rs 5,000, into a dedicated international fund for greater global exposure.
Potential Change: You could adjust your investment in the Parag Parikh Flexi Cap Fund and add a small allocation to a dedicated international equity fund.

4. Reduce Concentration in Index Funds
Index funds like the UTI Nifty 50 track market indices. While they are stable, they only match market returns and lack active management benefits.

Why Reduce Index Fund Allocation? Actively managed funds can outperform and adjust to market conditions.
Allocation Suggestion: Decrease investment in the UTI Nifty 50 Index Fund and redistribute to more actively managed funds.
Potential Change: Shift part of the Rs 15,000 from the UTI Nifty 50 to funds with active management and growth potential, like multi-cap or mid-cap funds.

Risk Management and Stability
Ensuring your portfolio aligns with your risk tolerance and financial goals is crucial. Here’s how you can manage risks effectively:

1. Balance Growth with Stability
Your portfolio should aim for growth but also maintain some stability to buffer against market volatility.

Growth Funds: Focus on funds that offer high growth potential like small-cap and mid-cap funds.
Stable Funds: Include funds that provide stability, such as large-cap funds or balanced funds.
Why This Balance Matters: It helps in achieving high returns while protecting against significant losses.

2. Monitor and Rebalance Regularly
Regular monitoring and rebalancing of your portfolio are essential to stay on track.

Why Monitor? Ensure that your investments align with your goals and risk tolerance.
When to Rebalance? Adjust your portfolio annually or when there are significant market changes.
How This Helps: It keeps your portfolio aligned with your financial goals and market conditions.

Managing SIPs and Lump Sum Investments
Since you are committing to regular SIPs, let’s ensure they align well with your strategy and goals.

1. Continue with SIPs for Consistency
SIPs offer a disciplined approach to investing, helping to average out costs over time.

Why Continue SIPs? They build wealth steadily and manage market volatility through regular investments.
Monthly Commitment: Your Rs 50,000 monthly SIP is a strong foundation for long-term growth.
Benefits: SIPs help in mitigating the impact of market volatility and averaging out the purchase cost of mutual fund units.

2. Consider Lump Sum Investments During Market Corrections
Lump sum investments during market dips can be advantageous.

Why Lump Sum During Dips? Markets offer buying opportunities at lower prices during corrections.
How to Implement: Keep some funds aside to invest during significant market downturns.
Why This Strategy Works: It allows you to take advantage of lower market valuations, potentially boosting returns.

Aligning with Financial Goals
Your investments should align with both your long-term and short-term financial goals.

1. Define Your Financial Goals
Clearly define your short-term and long-term financial objectives.

Short-Term Goals: Emergencies, travel, or large purchases in the next 2-5 years.
Long-Term Goals: Retirement, children’s education, or wealth building over 10-20 years.
Why Goal Definition is Key: It helps in choosing the right funds and setting the appropriate investment horizon.

2. Match Funds with Goals
Choose funds that align with your risk tolerance and investment horizon for each goal.

Short-Term Investments: Consider debt or balanced funds for short-term goals to reduce risk.
Long-Term Investments: Continue with equity funds for long-term goals for higher growth potential.
Why This Alignment Matters: Different goals require different investment strategies to manage risk and returns effectively.

Final Insights
You’re on a commendable journey towards building wealth with a well-thought-out SIP strategy. Here’s a quick summary and additional insights to fine-tune your portfolio:

Diversification is Crucial: Ensure your investments spread across different types of funds for balanced growth and risk management.

Consider Adding Multi-Cap and Mid-Cap Funds: These funds offer flexibility and growth potential, balancing your current portfolio.

International Exposure: Increase your global market exposure with a dedicated international fund for added diversification.

Rebalance Regularly: Keep an eye on your portfolio’s performance and rebalance annually to stay aligned with your goals.

Maintain SIPs and Use Lump Sums Wisely: Continue with your SIPs for disciplined investing and consider lump sums during market corrections.

Align with Financial Goals: Match your investments with your specific financial goals to manage risk and optimize returns.

Investing is a journey that requires patience, discipline, and a strategy tailored to your unique needs and goals. Keep up the great work, and you’re sure to achieve your financial aspirations.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |8511 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 26, 2024

Asked by Anonymous - Jul 12, 2024Hindi
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Hi, I am 27 years old. I am currently investing total 10k/month in SIP Mutual fund Quant Small Cap --> 5k , HDFC Flexi Cap --> 3k , ICICI Technology Fund --> 2k. I want to increase the investment to 30k/month. Can you help me to decide on the categories for diversifying the portfolio? Other means of saving I am doing is EPF,PPF for retirement, Stocks (current value 2L), FD
Ans: Current Portfolio Overview
Mutual Fund Investments
Rs. 5,000 in Small Cap Fund
Rs. 3,000 in Flexi Cap Fund
Rs. 2,000 in Technology Fund
Other Investments
EPF and PPF for retirement
Rs. 2 lakh in stocks
Fixed Deposit
Diversifying Your Portfolio
Large Cap Funds
Large Cap Funds are a safe option. They invest in top companies with stable performance. Allocating Rs. 8,000/month here can provide stability.

Mid Cap Funds
Mid Cap Funds invest in medium-sized companies with growth potential. They balance risk and reward well. Investing Rs. 6,000/month is advisable.

Debt Funds
Debt Funds are less risky. They provide regular income and capital preservation. You can invest Rs. 5,000/month here.

Balanced or Hybrid Funds
Balanced Funds mix equity and debt. They offer moderate risk with balanced returns. A Rs. 4,000/month investment is suitable.

International Funds
International Funds invest in global markets. They offer diversification beyond domestic markets. Consider Rs. 3,000/month here.

Sectoral or Thematic Funds
Sectoral Funds focus on specific industries. They can be rewarding but risky. A small allocation of Rs. 2,000/month can be beneficial.

Advantages of Actively Managed Funds
Professional Management
Actively Managed Funds are handled by experts. They aim to outperform the market.

Flexibility
These funds adjust based on market conditions. This flexibility can help in uncertain times.

Potential for Higher Returns
They have the potential to deliver better returns than index funds.

Final Insights
Diversifying your investments is key. Spread your money across various categories for balance. Avoid heavy reliance on one type of fund. Review and adjust your portfolio periodically.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |8511 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 28, 2025

Money
Hi , I have recently started investing in mutual funds. I have got following funds in my portfolio. I am 36 years old and I want to invest 30,000 per month and can step up 10% every year. I am looking at 15 years horizon for investment. Could you please tell me if my portfolio is diversified and how much should I invest in each fund and which fund should I stop? SBI Technology Opportunities Fund Direct-Growth, Nippon India Consumption Fund Direct-Growth, SBI Long Term Equity Fund Direct Plan-Growth, Quant ELSS Tax Saver Fund Direct-Growth, ICICI Prudential BHARAT 22 FOF Direct - Growth, Quant Infrastructure Fund Direct-Growth, UTI Gold ETF FoF Direct - Growth, ICICI Prudential Silver ETF FoF Direct - Growth, ICICI Prudential Nifty 50 Index Direct Plan-Growth Parag parikh flexi cap fund Motilal oswal midcap fund
Ans: You have included eleven different mutual fund schemes in your portfolio.

You are investing across sectoral, thematic, flexi cap, mid cap, ELSS, and ETF categories.

Your total monthly commitment is Rs 30000, with a step-up plan of 10% yearly.

Your investment horizon is 15 years, which is very healthy.

Your seriousness towards wealth building is highly appreciable.

Assessment of Asset Allocation

Your portfolio is heavily inclined towards sectoral and thematic funds.

Technology, consumption, infrastructure, gold, and silver sectors are present.

Sectoral funds are high-risk because they depend on specific industry performance.

Only a portion of the portfolio should be in sectoral or thematic funds.

Your flexi cap and mid cap funds provide broader market exposure.

Two ELSS funds are good but having two may cause duplication.

Diversification Analysis

Your portfolio is not adequately diversified across core categories.

Too many sector-specific and commodity funds add concentration risk.

Sectors like technology and consumption move in cycles and can underperform.

Commodities like gold and silver are for hedging, not for growth.

Overweight on thematic sectors reduces stability in market downturns.

Core diversification into flexi cap, large cap, and mid cap funds is missing.

Fund Selection Quality

The active equity funds chosen are from strong and reputed fund houses.

Actively managed funds give better long-term returns than passive funds.

Index funds and ETFs like Bharat 22 or Nifty 50 limit your fund manager’s skill.

Passive funds only copy the market without trying to outperform.

Active fund managers adjust portfolio based on opportunities and risks.

Hence, it is wise to prefer active funds over passive options for wealth creation.

ETFs and index funds can underperform due to tracking errors and expense ratio issues.

SIP Strategy Evaluation

Starting SIP of Rs 30000 monthly with a 10% step-up is excellent.

Over 15 years, this disciplined strategy can create substantial wealth.

SIP works best when continued across market ups and downs.

Step-up feature helps to fight inflation and grow corpus faster.

Continue SIP without worrying about short-term market movements.

Risk Assessment

Sectoral exposure increases your portfolio risk significantly.

Technology, infrastructure, consumption, gold, and silver move differently.

In bad cycles, sectoral funds can severely underperform.

Ideally, sectoral funds should not be more than 10-15% of the portfolio.

Your portfolio currently has 50% or more in sectors and commodities.

High sectoral exposure may cause unstable returns in some years.

Gaps or Missing Elements

You are missing sufficient exposure to large cap and multi cap funds.

Core portfolio should focus on broad market funds for better balance.

Only one mid cap and one flexi cap fund is not enough for stability.

You need to stop unnecessary sectoral and commodity funds.

Create a solid base with multi cap, flexi cap, and large cap oriented funds.

Then keep small satellite allocation to sectors for tactical advantage.

Taxation Impact

ELSS funds provide tax deduction under section 80C up to Rs 1.5 lakh.

But you do not need two ELSS funds; one is enough for tax planning.

Equity mutual fund taxation is now changed.

Short-term gains are taxed at 20% if sold before one year.

Long-term gains above Rs 1.25 lakh are taxed at 12.5%.

Keep investments for more than one year to benefit from lower taxes.

Gold and silver ETFs are treated as debt funds.

Gains from gold and silver funds are taxed as per your income slab.

Importance of Investing Through Certified Financial Planner

Direct plans make you responsible for all research, tracking, and risk management.

A Certified Financial Planner adds immense value to your investment journey.

Regular plans through a trusted MFD offer yearly reviews, rebalancing, and advice.

Regular plans help avoid emotional mistakes during market volatility.

The very small additional cost is worth the professional expertise you receive.

Investing through a CFP ensures goal alignment, tax efficiency, and discipline.

Recommended Changes to Your Portfolio

Stop investments into technology sector fund immediately.

Stop investments into consumption theme fund immediately.

Stop investments into infrastructure sector fund immediately.

Stop investments into Bharat 22 ETF and Nifty 50 Index fund immediately.

Stop investments into gold and silver ETF funds immediately.

Retain one ELSS fund for your 80C tax saving needs.

Continue with your flexi cap fund investment.

Continue with your mid cap fund investment.

Add a large and mid cap fund to balance the portfolio.

Add another flexi cap fund or focused fund for broader coverage.

Keep sectoral exposure to maximum 10% combined if needed later.

Ideal Allocation Suggestion

40% in flexi cap funds.

30% in large and mid cap funds.

20% in mid cap funds.

10% optional tactical sector funds after one year of core stability.

For Rs 30000 monthly, you can split like this:

Rs 12000 in flexi cap funds

Rs 9000 in large and mid cap funds

Rs 6000 in mid cap funds

Rs 3000 in sector funds only if your risk appetite allows.

Review your allocation every year.

Additional Recommendations for Better Portfolio Health

Maintain an emergency fund for 6 months’ expenses separately.

Ensure you have pure term insurance cover based on your income and liabilities.

Create specific goals like retirement, children education, buying a house, etc.

Align investments to these goals for better discipline and motivation.

Step up your SIPs by 10% every year without fail.

Avoid timing the market or reacting to short-term volatility.

Invest with patience and stay focused on the 15-year horizon.

Work closely with a Certified Financial Planner for yearly reviews.

Finally

You have taken a wonderful step towards wealth creation at age 36.

SIP with a step-up strategy and 15 years horizon is powerful.

Portfolio needs urgent streamlining to avoid high sector concentration.

Focus on broad diversified funds instead of sectoral or commodity themes.

Stick to active fund management rather than index or ETF strategies.

Use the services of a Certified Financial Planner for hand-holding and expert advice.

Keep your investments goal-based and not market-news-based.

Build an emergency fund separately to safeguard your investments.

Gradually step-up SIPs to match inflation and rising goals.

Be patient, disciplined, and committed for next 15 years.

You are well on your way towards strong financial independence!

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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

..Read more

Latest Questions
Nayagam P

Nayagam P P  |5017 Answers  |Ask -

Career Counsellor - Answered on May 24, 2025

Career
Namasthe sir My daughter belongs to obc ncl categary her all india rank in mains is 92180 and category rank is 29244 can you please suggest me college can be expected iam from lower middle class background cannot afford higher payble colleges, finally she is merit student from Andhrapradesh
Ans: Md Sir, Here is, How to Predict Your Daughter's Chances of Admission into NIT or IIIT or GFTI After JEE Main/Advanced Results – A Step-by-Step Guide

Providing precise admission chances for each student can be challenging. Some reputed educational websites offer ‘College Predictor’ tools where you can check possible college options based on your percentile, category, and preferences. However, for a more accurate understanding, here’s a simple yet effective 9-step method using JoSAA’s past-year opening and closing ranks. This approach gives you a fair estimate (though not 100% exact) of your admission chances based on the previous year’s data.

Step-by-Step Guide to Check Your Admission Chances Using JoSAA Data
Step 1: Collect Your Key Details
Before starting, note down the following details:

Your JEE Main percentile
Your category (General-Open, SC, ST, OBC-NCL, EWS, PwD categories)
Preferred institute types (NIT, IIIT, GFTI)
Preferred locations (or if you're open to any location in India)
List of at least 3 preferred academic programs (branches) as backups (instead of relying on just one option)
Step 2: Access JoSAA’s Official Opening & Closing Ranks
Go to Google and type: JoSAA Opening & Closing Ranks 2024
Click on the first search result (official JoSAA website).
You will land directly on JoSAA’s portal, where you can enter your details to check past-year cutoffs.
Step 3: Select the Round Number
JoSAA conducts five rounds of counseling.
For a safer estimate, choose Round 4, as most admissions are settled by this round.
Step 4: Choose the Institute Type
Select NIT, IIIT, or GFTI, depending on your preference.
If you are open to all types of institutes, check them one by one instead of selecting all at once.
Step 5: Select the Institute Name (Based on Location)
It is recommended to check institutes one by one, based on your preferred locations.
Avoid selecting ‘ALL’ at once, as it may create confusion.
Step 6: Select Your Preferred Academic Program (Branch)
Enter the branches you are interested in, one at a time, in your preferred order.
Step 7: Submit and Analyze Results
After selecting the relevant details, click the ‘SUBMIT’ button.
The system will display Opening & Closing Ranks of the selected institute and branch for different categories.
Step 8: Note Down the Opening & Closing Ranks
Maintain a notebook or diary to record the Opening & Closing Ranks for each institute and branch you are interested in.
This will serve as a quick reference during JoSAA counseling.
Step 9: Adjust Your Expectations on a Safer Side
Since Opening & Closing Ranks fluctuate slightly each year, always adjust the numbers for safety.
Example Calculation:
If the Opening & Closing Ranks for NIT Delhi | Mechanical Engineering | OPEN Category show 8622 & 26186 (for Home State), consider adjusting them to 8300 & 23000 (on a safer side).
If the Female Category rank is 34334 & 36212, adjust it to 31000 & 33000.
Follow this approach for Other State candidates and different categories.
Pro Tip: Adjust your expected rank slightly lower than the previous year's cutoffs for realistic expectations during JoSAA counseling.

Can This Method Be Used for JEE April & JEE Advanced?
Yes! You can repeat the same steps after your April JEE Main results to refine your admission possibilities.
You can also follow a similar process for JEE Advanced cutoffs when applying for IITs.

Have some other options also as back-ups instead of relying only on JEE/JoSAA.

Want to Learn More About JoSAA Counseling?
If you want detailed insights on JoSAA counseling, engineering entrance exams, preparation strategies, and engineering career options, check out EduJob360’s 180+ YouTube videos on this topic!

Hope this guide helps! All the best for your daughter's admission and a bright future!

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DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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