Sir. I am continuing my sip of 17000 in these mutual fund. 1.parag parikh flexicap dir- 3000 2.icici prudential technology-2000 3.Axis small cap dir-3000 4.Canara robeco small cap-2000 5. Quant small cap-3000 6. Nippon ind small cap-4000....

Sir. I am continuing my sip of 17000 in these mutual fund. 1.parag parikh flexicap dir- 3000 2.icici prudential technology-2000 3.Axis small cap dir-3000 4.Canara robeco small cap-2000 5. Quant small cap-3000 6. Nippon ind small cap-4000. Investment period - 15yr plus .Age- 35. Please suggest me for the same.

Ans: Your SIP allocation has a significant tilt towards small and flexi-cap funds, which can be volatile but offer growth potential. Given your age and investment horizon:

Consider diversifying by adding a large-cap or multi-cap fund to balance the portfolio.
Revisit the technology fund's exposure; while it can offer high growth, it can also be volatile.
Ensure your portfolio aligns with your risk tolerance and long-term goals.
Regular reviews with a financial advisor can help adjust your strategy as needed and ensure your portfolio remains well-balanced.

Ans: It is great that you are planning a disciplined SIP of Rs 60,000 monthly.
You are thinking long-term, which is the right way to grow wealth.
Starting early, and staying invested will build a strong future for your family.
Now, you are on the right track. But the fund selection needs careful refining.

You’ve shortlisted too many mutual funds. That can hurt your diversification.
Too many overlapping schemes create confusion, not balance.
Even good funds lose impact if spread too thin.
Let’s structure your Rs 60,000 SIP better, with focus and clarity.

» Avoid Over-Diversification

– You’ve listed more than 15 funds for one SIP plan.
– That’s excessive and creates overlap across market segments.
– Many schemes fall in the same category – large cap, flexi cap, mid cap.
– This causes unnecessary duplication and weakens returns.

– Ideal portfolio needs 5 to 7 well-selected funds only.
– Each fund should have a clear and unique role.
– Too many funds dilute compounding benefits.
– You also lose track of performance when holding many schemes.

» Say No to Index Funds in SIP Portfolio

– You have multiple index funds in your selection list.
– These include Nifty 50, Nifty Midcap, Bank Index, Sensex-based schemes.
– Index funds follow market passively, without active strategy.
– They invest based on market cap, not on potential or value.

– They also invest in overvalued stocks due to index weighting.
– During market correction, index funds fall with no defence.
– They can’t avoid poor-performing sectors or companies.
– Your portfolio stays exposed even during market weakness.

– Actively managed funds, in contrast, offer flexibility.
– Fund managers can exit weak stocks and sectors.
– This helps reduce downside and improve long-term returns.

– Especially for SIP investors, active funds bring better long-term stability.
– So, remove all index funds from your SIP plan.
– Focus only on quality actively managed mutual funds.

» Avoid Direct Plans if You Want Personalised Guidance

– You’ve selected all direct plans.
– Direct plans do not offer professional support.
– You invest alone, without expert help in goal tracking or market timing.

– If a crisis or market crash comes, there is no guidance.
– Most direct investors panic-sell or stop SIPs during volatility.

– With regular plans, you get support from a qualified Certified Financial Planner.
– A CFP helps in fund selection, goal planning, rebalancing, and reviews.
– They also help manage tax planning and withdrawals.

– Slightly higher cost in regular plans brings long-term value.
– That extra support protects your capital during tough times.

– Direct plans may look cheaper, but can cost more in long run.
– So choose regular plans through a CFP with MFD credentials.

» Build Your Portfolio Around Core and Satellite Approach

– A smart SIP structure follows the core and satellite model.
– Core funds provide stability and long-term compounding.
– Satellite funds add aggression and higher return potential.

– Core should form 60% of SIP amount.
– Satellite should form remaining 40%.
– This keeps the portfolio balanced, yet growth-oriented.

» Suggested Allocation Strategy For Rs 60,000 Monthly SIP

Core Portfolio – Rs 36,000 (60%)
– Choose 1 flexi cap fund for core exposure across market caps.
– Add 1 large and mid cap fund for balanced growth and stability.
– Add 1 multicap fund for structural allocation to large, mid, and small.
– Choose 1 large cap fund with consistent history of risk-managed growth.

Satellite Portfolio – Rs 24,000 (40%)
– Pick 1 small cap fund for aggressive long-term growth.
– Add 1 mid cap fund for wealth building with moderate volatility.
– Include 1 contra or value fund for contrarian exposure during market cycles.
– If tax saving is needed, keep only one ELSS fund.

– Avoid having multiple ELSS schemes, as that over-diversifies the tax benefit.
– One well-performing ELSS fund is enough under Section 80C.

– Don’t mix too many funds from the same AMC.
– Maintain diversity in fund houses for risk spread.

» Avoid Thematic and Sector Funds for Now

– Your list includes sector index funds like private bank or Nifty Bank.
– These are high-risk and narrow-focus schemes.
– Sector funds perform well only during favourable cycles.
– Outside of that, they underperform heavily.

– Avoid sector-specific funds unless you understand sector timing.
– SIP in sector funds is not ideal due to cyclicality.
– Stay with diversified equity funds instead.
– Let sector allocation happen inside multicap or flexicap funds.

» Don’t Mix Similar Category Funds

– You’ve selected 2–3 funds from the same category.
– Example: multiple small cap, large cap, ELSS funds.
– This creates clutter, not clarity.
– Choose one best fund from each category only.
– That keeps the portfolio efficient and easy to manage.

– Fund selection should be based on performance consistency, risk-adjusted returns, fund house philosophy.
– Stick to funds that have proven performance over multiple cycles.

– Don’t choose based on short-term hype or recent rankings.

» Regular Review and SIP Increment Are Important

– SIP is not one-time setup. It needs review every year.
– Check fund performance, category changes, and goal alignment.
– Remove underperformers. Add better options with CFP support.
– Rebalance between categories if one becomes too dominant.

– Increase SIP every year by 10–15%.
– That boosts long-term compounding without stress.
– Review your goals – retirement, child education, house down payment, etc.
– Link each SIP to one goal for better focus.

» Tax Planning Needs Thoughtful Fund Choices

– ELSS funds help save tax under 80C up to Rs 1.5 lakh yearly.
– Don’t invest in more than one ELSS scheme.
– One ELSS fund is enough for tax and growth.

– Avoid choosing ELSS just based on returns.
– Choose based on long-term stability and fund house quality.

– Remember new mutual fund taxation rules.
– Equity LTCG above Rs 1.25 lakh taxed at 12.5%.
– STCG taxed at 20% on equity funds.
– Debt mutual fund gains taxed as per your slab.
– So plan redemptions and switches carefully with your CFP.

» Align SIP With Your Risk Profile

– You are investing Rs 60,000 per month. That’s significant.
– So it must match your risk appetite and financial goals.
– Flexi cap and multicap funds are good for balanced growth.
– Small cap and mid cap funds bring high returns, but also more risk.

– Don’t over-allocate to small cap unless you are ready for volatility.
– Keep riskier funds within 20–30% of SIP only.
– Stay invested for minimum 7–10 years in small cap schemes.
– Shorter durations will harm returns.

– With right mix, even high volatility becomes wealth-building over time.

» Avoid Emotional SIP Decisions

– Don’t pause SIPs when markets fall.
– That’s the best time for long-term growth.
– Falling markets allow you to buy more units.
– This helps you build strong returns in future.

– Avoid switching funds often.
– Let SIPs run uninterrupted for long periods.
– Review performance, but don’t react emotionally.

– Good funds need time to show full potential.
– Stay patient and trust the process.

» Finally

– You have the right mindset and monthly commitment.
– Rs 60,000 SIP monthly is powerful for wealth creation.
– But reduce the number of mutual funds in your portfolio.
– Remove all index and sector-based schemes.
– Focus only on actively managed, diversified equity mutual funds.
– Avoid direct plans and invest via regular plans with CFP support.
– Use a core and satellite portfolio structure.
– Review annually and align with changing goals.
– Avoid overreacting to short-term performance.

– With this discipline and focus, your financial future is very bright.
– Stay invested and consistent. Your goals are well within reach.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment