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Ramalingam Kalirajan |10870 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Oct 24, 2025

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

Question by Office on Oct 23, 2025Hindi

I want to create a mutual fund SIP portfolio for a 27,000 P.M. investment time period of 10 to 15 years. Suggest me some funds for the portfolio?

Ans: You are making a very thoughtful decision by planning a long-term SIP portfolio. Investing Rs 27,000 every month for 10 to 15 years is a solid step towards wealth creation. It shows your maturity, focus, and awareness about disciplined investing. Starting early and staying consistent will help you build a strong financial future. Your commitment today will surely pay off tomorrow. Let us look at how to build a strong, diversified portfolio to meet your long-term goals.

» Appreciation of your initiative

Your approach towards systematic investing deserves appreciation. You are not just saving but investing wisely. This is the right way to achieve financial independence. By planning for 10 to 15 years, you are giving your investments enough time to grow. Time is your biggest strength. Compounding works like magic when you give it time.

Also, starting an SIP builds financial discipline. It helps you invest regularly, without worrying about market levels. This habit itself is a great foundation for long-term success.

» Defining the objective clearly

You want to invest Rs 27,000 monthly for the next 10 to 15 years. This is a long-term wealth-building goal. For this time frame, equity mutual funds are the most suitable. They offer the best potential for inflation-beating returns.

A 10–15 year horizon helps you handle short-term volatility comfortably. Your focus should be on steady wealth creation, not short-term returns. A mix of diversified equity funds will give you stability, growth, and protection against inflation.

» Setting the right asset allocation

For a time horizon of 10 to 15 years, an ideal asset allocation would be:

Around 80–85% in equity-oriented funds for long-term growth

Around 15–20% in hybrid or debt-oriented funds for stability

This mix ensures good growth potential while controlling risk during market corrections. Equity funds will drive the returns, and hybrid or debt funds will cushion the volatility.

Within equity, diversification across different market caps and investment styles will balance the portfolio.

» Suggested mutual fund categories for your portfolio

You can create a simple and effective portfolio with 5 funds from different categories. Each category serves a purpose and together they build a strong foundation.

Flexicap or Multicap Fund – Brings balanced exposure across large, mid, and small companies. It adapts to market conditions.

Large & Mid Cap Fund – Combines the stability of large caps and the growth of mid caps.

Mid Cap Fund – Adds a strong growth element for long-term compounding.

Small Cap Fund – Offers higher growth potential over long periods.

Hybrid Aggressive or Balanced Advantage Fund – Provides stability and reduces risk through dynamic allocation.

This combination spreads your money across different segments and styles, reducing risk while maintaining good growth potential.

» Sample allocation of Rs 27,000 monthly investment

You may consider dividing your SIP amount like this:

Rs 8,000 – Flexicap or Multicap Fund

Rs 6,000 – Large & Mid Cap Fund

Rs 5,000 – Mid Cap Fund

Rs 4,000 – Small Cap Fund

Rs 4,000 – Hybrid or Balanced Advantage Fund

This allocation is well-diversified and suits a long-term investor with moderate-to-high risk tolerance. You can always fine-tune this in consultation with a Certified Financial Planner.

» Understanding the role of each category

Flexicap or Multicap Fund: These funds move freely between large, mid, and small companies. They help capture opportunities across segments. The fund manager can adjust allocations based on market conditions. This flexibility helps in both bull and bear markets.

Large & Mid Cap Fund: This category balances growth and stability. Large caps add safety and consistency, while mid caps bring higher growth potential. It ensures steady long-term wealth creation.

Mid Cap Fund: Mid cap companies are fast-growing businesses. They usually outperform large caps over long periods. But they can be volatile in the short term. Holding them for 10–15 years gives time to smooth out volatility.

Small Cap Fund: Small cap funds invest in emerging companies. They carry higher risk but reward long-term investors well. A small allocation, around 15%, adds strength and return potential.

Hybrid or Balanced Advantage Fund: This fund type dynamically adjusts between equity and debt based on market valuations. It provides stability and acts as a cushion during market corrections.

» Importance of diversification

Your portfolio should not depend on one type of fund or one market segment. By including large, mid, small, and hybrid funds, you spread risk. If one segment underperforms, others can balance it.

Diversification ensures smoother returns and reduces the impact of market volatility. It also helps you stay invested comfortably during tough market phases.

» Investing through regular plans

Many investors prefer direct plans thinking they save costs. But direct plans require constant monitoring and rebalancing. Without expert guidance, investors often make emotional decisions and redeem at wrong times.

Regular plans through a Certified Financial Planner provide professional advice, periodic reviews, and risk management. A CFP monitors market conditions and adjusts the portfolio when needed.

The small difference in expense ratio is worth the professional support, discipline, and peace of mind. In the long run, regular plans often deliver better actual returns due to consistent behaviour and timely guidance.

» Importance of professional guidance

A Certified Financial Planner (CFP) studies your goals, risk profile, and income pattern. They design a portfolio that fits your life stage and needs. They also review it regularly to ensure it stays on track.

A CFP also guides you on taxation, rebalancing, and goal alignment. This 360-degree approach helps you manage both growth and safety.

Without proper guidance, investors often chase high returns or make short-term decisions. A CFP ensures you stay focused and disciplined.

» Taxation aspects of mutual funds

As per the new tax rule, when selling equity mutual funds, long-term capital gains above Rs 1.25 lakh are taxed at 12.5%. Short-term gains are taxed at 20%.

For debt mutual funds, both long-term and short-term gains are taxed as per your income tax slab.

Since your investment horizon is 10–15 years, most of your gains will fall under long-term capital gains. You can plan redemptions smartly to reduce tax impact. Avoid frequent switching as that creates unnecessary taxable events.

» SIP step-up strategy

Every year, try to increase your SIP by 10–15%. This is called a step-up SIP. As your income grows, your investments should also grow.

This simple step helps you fight inflation and reach goals faster. It ensures your wealth grows in line with your lifestyle needs.

Even a small yearly increase in SIP amount can make a huge difference after 15 years.

» Reviewing your portfolio

It is important to review your portfolio at least once a year. Check if your funds are performing above their category average. If any fund underperforms consistently for 3 years or more, you can consider switching.

Do not change funds based on one year’s performance. Give time for funds to deliver. The key is to stay consistent. A Certified Financial Planner can help you analyse performance objectively.

» Managing risk and emotions

Equity markets move up and down. Short-term falls are normal. Do not panic or stop SIPs when markets fall. In fact, those are the best times to invest more.

SIPs work best during volatile periods. You buy more units at lower prices and build strong wealth when markets recover.

Avoid emotional decisions. Stay patient and trust your long-term plan. Consistency matters more than timing.

» Inflation and real growth

Inflation reduces the value of money over time. That is why equity funds are important. They provide inflation-beating returns over the long term.

Your SIP portfolio, with a 10–15 year horizon, will likely outperform inflation comfortably. Equity exposure ensures your purchasing power increases over time.

Keep your focus on real returns, not short-term market movements.

» Linking SIPs with goals

It is better to connect your SIPs with specific goals. For example – child’s education, retirement, or house purchase. When goals are defined, you get clarity and motivation to continue.

Goal-based investing keeps you disciplined and emotionally detached from market volatility. It also helps in reviewing progress properly.

Your Certified Financial Planner can map each SIP to a specific goal and track performance.

» Emergency fund and protection

Before starting SIPs, maintain an emergency fund equal to at least six months of expenses. This ensures financial safety in case of job loss or unexpected costs.

Also, have adequate term insurance and health insurance. Avoid ULIPs or investment-cum-insurance policies as they give poor returns and high costs. Term insurance plus mutual funds is a smarter and transparent combination.

This protection ensures your investments stay untouched during emergencies.

» Rebalancing near goal maturity

As your goal nears, around year 13 or 14, start reducing equity exposure gradually. Shift about 20–25% of your corpus to hybrid or short-term debt funds.

This helps protect your capital from sudden market drops before you need the money. A gradual shift is safer than a sudden exit.

A Certified Financial Planner can guide you with this transition smoothly.

» Avoiding common mistakes

– Do not stop SIPs when markets fall.
– Avoid adding too many funds to your portfolio.
– Don’t choose funds based only on past one-year returns.
– Avoid direct plans if you can’t track and review properly.
– Don’t invest in ULIPs or traditional insurance plans.
– Avoid timing the market or chasing short-term performance.

Following these simple principles will keep your portfolio healthy and stable.

» Finally

Your plan to invest Rs 27,000 every month for 10 to 15 years is a great step. With the right mix of equity and hybrid funds, disciplined SIPs, and yearly reviews, you can build significant wealth.

Stay consistent, increase SIPs gradually, and avoid emotional reactions to market movements. Investing through regular plans with a Certified Financial Planner ensures expert guidance, discipline, and goal alignment.

You are already on the right path. Keep investing patiently, and your financial dreams will surely come true.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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

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