Sir, I have both Mirae asset Large and Mid cap fund with sip + Mirae asset Large cap fund (sip stopped) in my fortfilio since 5 years which I feel 60% overlaping. Can I make STP from Mirae asset large cap fund to Mirae asset large and Mid cap fund. So that I can make one fund for 10 years period.

Ans: Yes SIP and SWP can be done from the same fund. However please keep SWP at 7.5% to 8% of the corpus for perpetuity.

Ans: Please continue; can be reviewed post 6 months

Ans: Yes please to your first three statements.

On SIP, Rs 5,000 per month to Tata Digital India Fund -- D/P-G and Motilal Oswal Nasdaq 100 FOF -- D/P-G.

 

Ans: Your SIP allocation across flexi-cap, multi-cap, and ELSS funds shows a diversified approach, which is beneficial for a five-year investment horizon. However, consider the following:

Diversification: You have exposure to multiple funds across similar categories. Evaluate if this level of diversification is necessary or if consolidating can simplify your portfolio.
Risk Assessment: Ensure the risk level of these funds aligns with your risk tolerance and investment horizon.
Performance Review: Regularly monitor fund performance and make adjustments if any fund consistently underperforms.
Goal Alignment: Confirm if the selected funds align with your financial goals and time horizon of five years.
Consulting a financial advisor can help optimize your portfolio based on your goals, risk profile, and market conditions.

Ans: Switching or making a Systematic Transfer Plan (STP) from Mirae Asset Large Cap Fund to Mirae Asset Large and Mid Cap Fund can be considered based on your financial goals, risk tolerance, and investment strategy.

Factors to Consider:
1. Portfolio Diversification:
Large Cap Fund: Primarily invests in the top 100 companies, which are considered stable and less volatile. It is ideal for those seeking steady returns with relatively lower risk.
Large and Mid Cap Fund: Combines both large-cap (safer, stable) and mid-cap (higher growth potential but riskier) stocks. This offers a balanced approach, with more room for growth but with a bit more risk.
If your goal is to increase exposure to mid-cap stocks for potentially higher growth, an STP or switch to the Large and Mid Cap Fund makes sense. This fund offers a more diversified approach while still having a safety net of large-cap investments.

2. Investment Time Horizon:
Large and mid-cap funds tend to perform better in the long term (5+ years), as mid-caps may take time to realize their full growth potential. If your investment horizon is shorter, sticking with a large-cap fund may be preferable.
3. Risk Appetite:
Mid-cap stocks have higher growth potential but come with increased volatility. If you are comfortable with short-term fluctuations for long-term gains, an STP into the large and mid-cap fund could align with your goals.
4. Performance Track Record:
Both funds from Mirae Asset have strong reputations, but large-cap funds offer more consistent returns with lower downside risks during market corrections. You may want to assess the historical performance and volatility of both funds to see which fits your strategy better.
Why Use STP Instead of a Lump Sum Switch?
Tax Efficiency: An STP allows you to move funds gradually, spreading out tax implications and avoiding a large one-time exit load or capital gains tax.
Risk Mitigation: Instead of moving all your funds at once, an STP reduces the risk of entering at a high point in the market.
Consistent Investment: You continue investing in a disciplined manner, benefiting from rupee cost averaging.
Final Insight:
If your risk profile supports it, and your goal is long-term wealth creation, a STP from Mirae Asset Large Cap Fund to Mirae Asset Large and Mid Cap Fund can be a good option. This allows you to diversify your portfolio while retaining some stability through large-cap exposure.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in