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Ramalingam

Ramalingam Kalirajan  |7201 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 27, 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
Dr Question by Dr on May 25, 2024Hindi
Money

My current age is 49 Years. I have my own house worth Rs. 90 lakhs, one Flat worth Rs, 50 L, two small Bunglows at Bolpur worth Rs. 25 L, and 12 katthas of Land worth Rs. 40 L. Having no loan in the market. Through mutual funds I have invested Rs. 50 L. Its market value is 1.25 Cr. Presently I am running (1) SIP of Rs. 4,80, 000 p.a., (2) PPF of Rs. 1,50,000 /- p.a. (3) LIC (Market Linked) Rs. 2.25,000/- p.a. and (4) SBI Life Rs. 6,00,000 p.a. LICs are going to be matured by 2027. Would like to make a total fund og 5 Cr by 2030. So that after retirement at my age of 55, I can earn at least Rs. 3 L p.m. SIPs are : (1) SBI Blue Chip Fund Regular Plan Growth Rs. 60,000 p.a. (2) SBI Focussed Equity Fund Regular Growth Rs. 60,000 p.a. (3) SBI Magnum Global Fund Regular Plan Growth Rs. 60,000 p.a. (4) SBI Magnum Midcap Fund Regular Plan Growth Rs. 60,000 p.a. (5) SBI Nifty 50 Equal Weight Index Fund Regular Plan Growth Rs. 1,00,000 p.a.

Ans: Evaluating Your Current Financial Situation
At 49 years old, you have significant assets and investments. Your primary goals are to accumulate Rs. 5 crore by 2030 and ensure a monthly income of Rs. 3 lakh post-retirement. Let's break down your current assets and investments:

Real Estate Holdings:

House: Rs. 90 lakh
Flat: Rs. 50 lakh
Two bungalows at Bolpur: Rs. 25 lakh
12 katthas of land: Rs. 40 lakh
Financial Investments:

Mutual funds: Rs. 50 lakh invested, current market value Rs. 1.25 crore
SIPs: Rs. 4,80,000 annually
PPF: Rs. 1,50,000 annually
LIC (Market Linked): Rs. 2,25,000 annually
SBI Life: Rs. 6,00,000 annually
Financial Goals and Analysis
You aim to reach a total corpus of Rs. 5 crore by 2030. You also want to secure a monthly income of Rs. 3 lakh after retirement at age 55.

Strategic Investment Plan
To achieve your goals, it's essential to optimize your current investments and ensure they align with your risk tolerance and time horizon.

Reviewing Mutual Fund Investments
Your SIPs are well-diversified across various categories. However, it's crucial to evaluate their performance regularly and make adjustments as needed.

Current SIPs:

SBI Blue Chip Fund: Rs. 60,000 p.a.
SBI Focused Equity Fund: Rs. 60,000 p.a.
SBI Magnum Global Fund: Rs. 60,000 p.a.
SBI Magnum Midcap Fund: Rs. 60,000 p.a.
SBI Nifty 50 Equal Weight Index Fund: Rs. 1,00,000 p.a.
Suggested Adjustments:
SBI Blue Chip Fund: Increase SIP to Rs. 1,00,000 p.a.
SBI Focused Equity Fund: Maintain Rs. 60,000 p.a.
SBI Magnum Global Fund: Increase SIP to Rs. 1,00,000 p.a.
SBI Magnum Midcap Fund: Increase SIP to Rs. 1,00,000 p.a.
Add a Multi-Cap Fund: Allocate Rs. 60,000 p.a.
Add a Debt Fund: Allocate Rs. 60,000 p.a. for stability and risk mitigation.
Optimizing PPF Contributions
PPF is a safe and tax-efficient investment. Continue your annual contribution of Rs. 1,50,000. It offers steady returns and is an excellent tool for long-term wealth accumulation.

Evaluating Life Insurance Policies
Your LIC and SBI Life policies are significant commitments. Given their maturity in 2027, you can re-evaluate them to see if they meet your financial goals.

LIC Market Linked:

Annual Premium: Rs. 2,25,000
Maturity: 2027
SBI Life:

Annual Premium: Rs. 6,00,000
Consider the following:

Review Policy Performance: Evaluate if the returns are meeting your expectations.
Term Insurance: If you need life cover, a term insurance policy might be more cost-effective. This could free up funds for other investments.
Investment Strategy Post-Maturity of LIC
Once your LIC policies mature in 2027, you will have additional funds. Reinvest these into mutual funds or other high-return instruments to grow your corpus further.

Asset Allocation and Diversification
Balancing risk and return is crucial. Here’s a suggested asset allocation strategy:

Equity Funds (60-70%): Continue and increase SIPs in high-performing mutual funds.
Debt Funds (20-30%): Add debt funds for stability.
PPF (10-20%): Continue contributions for safe, tax-free returns.
Projected Growth and Future Value
Assuming an average annual return of 12% on your mutual fund investments, let's estimate the future value of your portfolio.

Mutual Funds:

Current Value: Rs. 1.25 crore
Annual SIPs: Increased to Rs. 4.80 lakh
Additional Lump Sum from LIC Maturity
Using a compound interest calculator, we can project significant growth. Regular reviews and adjustments will help stay on track.

Contingency Fund
Maintain an emergency fund equivalent to 6-12 months of expenses. This ensures financial stability in case of unexpected events.

Retirement Income Strategy
To secure Rs. 3 lakh monthly post-retirement, consider a mix of:

Systematic Withdrawal Plan (SWP): From mutual funds to provide regular income.
Debt Funds: For steady returns with low risk.
Post-Retirement Investments: Explore Senior Citizens’ Savings Scheme (SCSS) and other safe options.
Regular Review and Adjustment
Financial markets and personal circumstances change. Regularly review and adjust your portfolio to ensure it aligns with your goals and risk tolerance.

Conclusion
By optimizing your current investments and making strategic adjustments, you can achieve your goal of Rs. 5 crore by 2030 and secure a monthly income of Rs. 3 lakh post-retirement. Here’s a summary of the action plan:

Increase SIP contributions in high-performing funds.
Review and potentially replace LIC policies with term insurance.
Continue PPF contributions.
Reinvest LIC maturity proceeds into mutual funds.
Maintain an emergency fund.
Regularly review and adjust your investments.
Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
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  |7201 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 29, 2024

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My current age is 49 Years. I have my own house worth Rs. 90 lakhs, one Flat worth Rs, 50 L, two small Bunglows at Bolkpur worth Rs. 25 L, and 12 katthas of Land worth Rs. 40 L. Having no loan in the market. Through mutual funds I have invested Rs. 50 L. Its market value is 1.25 Cr. Presently I am running (1) SIP of Rs. 4,80, 000 p.m., (2) PPF of Rs. 1,50,000 /- p.a. (3) LIC (Market Linked) Rs. 2.25,000/- p.a. and (4) SBI Life Rs. 6,00,000 p.a. LICs are going to be matured by 2027. Would like to make a total fund og 5 Cr by 2030. So that after retirement at my age of 55, I can earn at least Rs. 3 L p.m. SIPs are : (1) SBI Blue Chip Fund Regular Plan Growth Rs. 60,000 p.a. (2) SBI Focussed Equity Fund Regular Growth Rs. 60,000 p.a. (3) SBI Magnum Global Fund Regular Plan Growth Rs. 60,000 p.a. (4) SBI Magnum Midcap Fund Regular Plan Growth Rs. 60,000 p.a. (5) SBI Nifty 50 Equal Weight Index Fund Regular Plan Growth Rs. 1,00,000 p.a.
Ans: Thank you for sharing detailed information about your current financial situation and goals. You have done an excellent job in building a diversified portfolio. Your goal of achieving Rs. 5 crore by 2030 and earning Rs. 3 lakh per month after retirement is commendable. Let’s delve into how you can achieve this.

Assessing Your Current Financial Status
You own multiple properties worth Rs. 2.05 crore, and your mutual fund investments are valued at Rs. 1.25 crore. Additionally, you are actively investing through SIPs, PPF, LIC, and SBI Life Insurance. This diversified approach is sound and sets a strong foundation for your financial goals.

Understanding Your Investment Strategy
You have allocated Rs. 4.8 lakh per month in SIPs and are contributing to PPF and insurance policies. Your current investment strategy reflects a balanced approach, combining equity, debt, and insurance products.

Evaluating Your SIP Investments
You have invested in several mutual funds, which is a good strategy. Actively managed funds can provide better returns due to professional management. However, index funds, while stable, may not offer the same level of growth as actively managed funds.

Disadvantages of Index Funds
Index funds track a specific market index and lack active management. They may not outperform the market and have limited flexibility. Actively managed funds, on the other hand, can adapt to market conditions, aiming for higher returns.

Benefits of Actively Managed Funds
Actively managed funds have experienced fund managers who make strategic decisions. They aim to outperform the market by selecting high-potential stocks. This can lead to better returns compared to index funds.

Importance of Diversification
Diversification reduces risk and enhances returns. Your portfolio should include a mix of large-cap, mid-cap, and small-cap funds. This approach balances stability with growth potential, aligning with your risk tolerance.

Regular Monitoring and Rebalancing
Regularly monitoring your investments is crucial. Rebalancing your portfolio ensures it aligns with your financial goals and risk tolerance. This helps maintain the desired asset allocation and optimizes returns.

Maximizing PPF Contributions
Your PPF contributions offer tax benefits and secure returns. Maximizing contributions to PPF can enhance your overall returns while providing safety. The tax-free interest adds to the attractiveness of PPF as a long-term investment.

Reviewing Insurance Policies
Your LIC and SBI Life policies provide insurance coverage and investment growth. However, market-linked insurance plans may have higher costs and lower returns compared to mutual funds. Considering your investment goals, it might be beneficial to surrender these policies and reinvest the proceeds in mutual funds.

Benefits of Reinvesting in Mutual Funds
Reinvesting the surrender value from your insurance policies into mutual funds can potentially offer higher returns. Mutual funds provide greater flexibility and the potential for significant growth, aligning well with your long-term goals.

Achieving Your Goal of Rs. 5 Crore by 2030
To achieve your goal of Rs. 5 crore by 2030, you need to focus on high-growth investments. Continue your SIPs in actively managed funds, maximize PPF contributions, and consider reinvesting insurance policy proceeds into mutual funds. This combined strategy should help you reach your target.

Generating Rs. 3 Lakh per Month Post-Retirement
To generate Rs. 3 lakh per month after retirement, you need a diversified income stream. This can include withdrawals from mutual funds, interest from PPF, and income from other investments. A Certified Financial Planner can help design a withdrawal strategy to meet your income needs.

Importance of Professional Guidance
Consulting a Certified Financial Planner ensures personalized advice. They can help optimize your investment strategy, align it with your goals, and manage risk. Professional guidance is invaluable in achieving financial security.

Disadvantages of Direct Funds
Direct funds require you to manage investments without professional advice. This can be challenging and risky without market knowledge. Regular funds, advised by a CFP, offer better management and informed decision-making.

Conclusion
Your current financial plan is robust and well-diversified. By continuing your disciplined investment approach, considering the surrender of insurance policies for better investment opportunities, and seeking professional advice, you can achieve your goal of Rs. 5 crore by 2030. This will ensure a comfortable retirement with a steady income.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |7201 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 23, 2024

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Money
My current age is 49 Years. I have my own house worth Rs. 90 lakhs, one Flat worth Rs, 50 L, two small Bungalows at Bolpur worth Rs. 25 L, and 12 kothas of Land worth Rs. 40 L. Having no loan in the market. Through mutual funds, I have invested Rs. 50 L.. Presently Its market value is 1.25 Cr. Presently I am running (1) SIP of Rs. 4,80, 000 p.a., (2) PPF of Rs. 1,50,000 /- p.a. (3) LIC (Market Linked) Rs. 2.25,000/- p.a. and (4) SBI Life Rs. 6,00,000 p.a. LICs are going to be matured by 2027. Would like to make a total fund og 5 Cr by 2030. So that after retirement at my age of 55, I can earn at least Rs. 3 L p.m. SIPs are : (1) SBI Blue Chip Fund Regular Plan Growth Rs. 60,000 p.a. (2) SBI Focussed Equity Fund Regular Growth Rs. 60,000 p.a. (3) SBI Magnum Global Fund Regular Plan Growth Rs. 60,000 p.a. (4) SBI Magnum Midcap Fund Regular Plan Growth Rs. 60,000 p.a. (5) SBI Nifty 50 Equal Weight Index Fund Regular Plan Growth Rs. 1,00,000 p.a.
Ans: Current Financial Status and Investment Goals

Your financial position is commendable. At 49, owning a house, a flat, two bungalows, and land showcases a solid real estate portfolio. Additionally, having Rs. 50 lakhs invested in mutual funds, now worth Rs. 1.25 crores, is impressive. The absence of loans further strengthens your financial health.

Ongoing Investments

You have a diversified investment approach. Your SIPs, PPF, and insurance policies show a well-thought-out strategy. These ongoing investments are critical for achieving your financial goals.

Assessing SIP Investments

Your SIP portfolio includes various funds. Actively managed funds can outperform index funds, especially in volatile markets. Certified Financial Planners can guide you in choosing funds that align with your risk tolerance and financial goals. Regular funds offer professional management, which can be beneficial.

Advantages of Actively Managed Funds

Actively managed funds aim to outperform the market. Fund managers adjust the portfolio based on market conditions. This can lead to better returns compared to index funds, which only mimic market performance.

Evaluating Insurance Policies

Your insurance policies, both LIC and SBI Life, provide a safety net. The market-linked LIC policy maturing in 2027 will add to your corpus. Ensure these policies align with your long-term financial goals.

Public Provident Fund (PPF)

Your PPF investment is a safe and tax-efficient option. It provides steady, risk-free returns and is a good addition to your retirement portfolio.

Targeting a Rs. 5 Crore Corpus by 2030

To reach Rs. 5 crore by 2030, reassess your investment strategy periodically. With your current assets and investments, this goal seems achievable. Keep track of market trends and adjust your investments accordingly.

Post-Retirement Income Plan

You aim for a monthly income of Rs. 3 lakhs post-retirement. Diversifying income sources, including investments, rental income, and interest from safe instruments, can help achieve this target.

Avoiding Index Funds

Index funds merely replicate market performance and might not provide superior returns. Actively managed funds, with expert fund management, can potentially deliver better returns and align with your financial goals.

Disadvantages of Direct Funds

Direct funds lack professional guidance, which regular funds offer. Certified Financial Planners provide tailored advice, helping to optimize your investment portfolio for better returns.

Regular Review and Adjustment

Regularly review your portfolio with a Certified Financial Planner. Market conditions change, and timely adjustments ensure your investments remain aligned with your goals.

Conclusion

Your financial foundation is strong, and with strategic planning, you can achieve your Rs. 5 crore target by 2030. Keep investing wisely, seek professional guidance, and review your portfolio periodically.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

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Ramalingam Kalirajan  |7201 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Sep 11, 2024

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Sir, I am 44 year old and want to retire after 15 years with 20 cr. value in current investing 1.55L in MF SIP in these fund ADITYA BIRLA SUN LIFE PSU EQUITY FUND - DIRECT PLAN 5000 AXIS BLUECHIP FUND - DIRECT PLAN 0 AXIS MIDCAP FUND - DIRECT PLAN 0 AXIS SMALL CAP FUND - DIRECT PLAN 4000 CANARA ROBECO BLUECHIP EQUITY FUND - DIRECT PLAN 12000 HDFC MULTI CAP FUND - DIRECT PLAN 3000 ICICI PRUDENTIAL BHARAT 22 FOF - DIRECT PLAN 5000 ICICI PRUDENTIAL NIFTY NEXT 50 INDEX FUND - DIRECT PLAN 3000 KOTAK MULTICAP FUND - DIRECT PLAN 4000 MIRAE ASSET LARGE CAP FUND - DIRECT PLAN 4000 MOTILAL OSWAL MIDCAP FUND - DIRECT PLAN 6000 MOTILAL OSWAL NIFTY INDIA DEFENCE INDEX FUND - DIRECT PLAN 10000 NIPPON INDIA LARGE CAP FUND - DIRECT PLAN 10000 NIPPON INDIA MULTI CAP FUND - DIRECT PLAN 4000 NIPPON INDIA SMALL CAP FUND - DIRECT PLAN 5000 PARAG PARIKH FLEXI CAP FUND - DIRECT PLAN 6000 PGIM INDIA FLEXI CAP FUND - DIRECT PLAN 6000 PGIM INDIA MIDCAP OPPORTUNITIES FUND - DIRECT PLAN 4000 QUANT ELSS TAX SAVER FUND - DIRECT PLAN 12500 QUANT INFRASTRUCTURE FUND - DIRECT PLAN 7000 QUANT LARGE AND MID CAP FUND - DIRECT PLAN 6000 QUANT MID CAP FUND - DIRECT PLAN 12000 QUANT SMALL CAP FUND - DIRECT PLAN 7000 SBI CONTRA FUND - DIRECT PLAN 8000 TATA SMALL CAP FUND - DIRECT PLAN 6000 ZERODHA NIFTY LARGEMIDCAP 250 INDEX FUND - DIRECT PLAN 2500 I feel that i am investing in too much fund . Kindly look my above portfolio and suggest to addition and change from these schemes to achieve the mentioned retirement target of 20 Cr. MF. Portfolio after 15 years.
Ans: Assessing Your Current Investment Portfolio
You've established a clear financial goal: accumulating Rs 20 crore by the time you retire in 15 years. To achieve this, you're currently investing Rs 1.55 lakh per month through SIPs in mutual funds. This commitment shows you're serious about your future and willing to take the necessary steps to secure it. However, the number of funds in your portfolio suggests you may be spreading your investments too thin, which could hinder your progress.

Understanding Over-Diversification
Diversification is a cornerstone of investing. It reduces risk by spreading investments across various assets or funds. However, over-diversification occurs when too many investments are made in similar funds or asset classes. This dilutes potential returns and complicates portfolio management. Your portfolio consists of 27 different funds, which is excessive.

The Dangers of Over-Diversification
Fund Overlap: Many funds in your portfolio likely invest in the same or similar stocks, leading to unnecessary redundancy. This doesn’t enhance diversification but rather makes it harder for you to see significant returns.

Management Complexity: With 27 funds, it’s challenging to track each one’s performance. This complexity makes it difficult to make timely adjustments to your portfolio, which is crucial for achieving your long-term goals.

Diluted Returns: When you invest in too many funds, the performance of your best-performing funds gets diluted by the average or poor performance of others. This can drag down your overall returns.

The Need for Streamlining Your Portfolio
To achieve your goal of Rs 20 crore in 15 years, it’s essential to streamline your portfolio. A focused approach will allow you to benefit from the growth potential of carefully selected funds without the drawbacks of over-diversification.

1. Large-Cap Funds: Foundation of Stability and Growth
Current Allocation: You have several large-cap funds in your portfolio, which are known for their stability and lower volatility compared to mid-cap and small-cap funds. However, holding multiple large-cap funds is unnecessary as they often invest in the same blue-chip companies.

Recommended Action: Consolidate your large-cap investments into one or two well-performing funds. This will simplify your portfolio and ensure that your investments are concentrated in the best opportunities within the large-cap space.

Suggested Allocation: Ideally, 25-30% of your portfolio should be allocated to large-cap funds. This allocation provides stability and consistent growth potential, crucial for someone planning retirement in 15 years.

2. Mid-Cap and Small-Cap Funds: Growth Drivers
Current Allocation: Mid-cap and small-cap funds are essential for achieving high growth. However, these funds come with higher risk and volatility. Your portfolio includes multiple mid-cap and small-cap funds, which may lead to overlapping investments.

Recommended Action: Narrow down your mid-cap and small-cap funds to one or two top performers in each category. Focus on funds that have a consistent track record of outperforming their benchmarks.

Suggested Allocation: Allocate 30-40% of your portfolio to a mix of mid-cap and small-cap funds. This will provide the growth potential needed to reach your Rs 20 crore goal while managing the risk associated with these funds.

3. Multi-Cap and Flexi-Cap Funds: Balanced Growth with Flexibility
Current Allocation: Multi-cap and flexi-cap funds offer flexibility by investing across different market capitalizations. Your portfolio has several of these funds, which is a good strategy for diversification. However, having too many can dilute their benefits.

Recommended Action: Consolidate your multi-cap and flexi-cap funds into one or two that have demonstrated consistent performance. These funds should have the ability to adjust their portfolio allocation based on market conditions.

Suggested Allocation: 20-25% of your portfolio should be in multi-cap or flexi-cap funds. This provides a balance between stability and growth, essential for long-term wealth accumulation.

4. Sectoral and Thematic Funds: Tactical Bets for Enhanced Returns
Current Allocation: You’ve invested in sectoral funds like Quant Infrastructure Fund and Motilal Oswal Nifty India Defence Index Fund. These funds can offer high returns but come with increased risk due to their concentrated exposure to specific sectors.

Recommended Action: Limit your exposure to sectoral and thematic funds. These should represent a small portion of your portfolio, used for tactical bets rather than core holdings. Choose sectors you believe will outperform in the long term, but be mindful of the higher volatility.

Suggested Allocation: Restrict sectoral and thematic funds to 5-10% of your portfolio. This ensures that while you can benefit from sectoral growth, the overall portfolio remains stable and diversified.

5. Index Funds: A Reconsideration of Their Role
Current Allocation: Your portfolio includes index funds like Zerodha Nifty LargeMidcap 250 Index Fund and ICICI Prudential Nifty Next 50 Index Fund. While index funds have low expense ratios and provide broad market exposure, they may not always be the best choice, especially when aiming for high growth.

Disadvantages of Index Funds:

Lack of Active Management: Index funds merely replicate the market and do not exploit market inefficiencies. Active fund managers, on the other hand, can outperform the market by selecting stocks based on research and analysis.
Underperformance in Volatile Markets: During market downturns or periods of high volatility, index funds may not protect your capital as well as actively managed funds, which can adjust their portfolios to minimize losses.
Recommended Action: Consider reducing or eliminating your index fund exposure. Instead, focus on actively managed funds that have a track record of outperforming their benchmarks.

Suggested Allocation: If you choose to retain any index funds, limit them to no more than 5% of your portfolio. The majority of your investments should be in actively managed funds with the potential for higher returns.

Building an Ideal Portfolio for Your Retirement Goal
To achieve your Rs 20 crore target in 15 years, it’s essential to build a portfolio that is both diversified and focused. Here’s a suggested portfolio structure that aligns with your risk profile, time horizon, and return expectations:

1. Large-Cap Funds (25-30% of Portfolio):
Retain 1-2 high-performing large-cap funds. These funds should have a history of consistent returns and lower volatility.
Why Large-Cap Funds? They provide stability and steady growth, essential as you approach retirement. Large-cap funds invest in established companies with strong track records, making them a safer bet.
2. Mid-Cap Funds (20-25% of Portfolio):
Retain 1-2 mid-cap funds that have shown resilience and consistent growth over the years.
Why Mid-Cap Funds? Mid-cap funds offer a good balance between risk and return. They invest in companies with the potential to become large-caps in the future, providing higher growth opportunities.
3. Small-Cap Funds (15-20% of Portfolio):
Retain 1-2 small-cap funds that have consistently outperformed their benchmarks.
Why Small-Cap Funds? Small-cap funds are riskier but can deliver significant returns over the long term. They are suitable for the growth portion of your portfolio, especially given your 15-year time horizon.
4. Flexi-Cap Funds (20-25% of Portfolio):
Retain 1-2 flexi-cap funds with a strong performance history. These funds should have the flexibility to invest across market capitalizations.
Why Flexi-Cap Funds? Flexi-cap funds provide a balanced approach to investing, with the flexibility to adjust to market conditions. This makes them a valuable part of your portfolio.
5. Sectoral/Thematic Funds (5-10% of Portfolio):
Retain only 1-2 sectoral funds that align with your long-term views.
Why Sectoral Funds? Sectoral funds can provide high returns, but they come with higher risk. By limiting exposure, you can benefit from sectoral growth without exposing your portfolio to excessive risk.
6. Index Funds (Up to 5% of Portfolio):
If you wish to retain any index funds, limit them to a small portion of your portfolio.
Why Limit Index Funds? Index funds offer market returns but lack the ability to outperform. Given your aggressive growth target, actively managed funds may serve you better.
Final Insights
Your goal of accumulating Rs 20 crore by retirement is ambitious but achievable with the right strategy. By consolidating and focusing your investments, you can maximize returns while managing risk effectively. Here’s a summary of the steps you should take:

Consolidate large-cap funds: Merge similar funds to avoid redundancy and simplify management.
Focus on mid-cap and small-cap funds: Select the top performers in each category to drive growth.
Streamline multi-cap/flexi-cap funds: Keep the best performers and ensure they have the flexibility to adapt to market changes.
Limit sectoral funds: Use them for tactical investments but keep their exposure low to manage risk.
Reduce index fund exposure: Consider actively managed funds for their potential to outperform, especially in volatile markets.
By implementing these changes, you’ll not only simplify your portfolio but also enhance its performance potential. This streamlined approach will help you stay on track to achieve your retirement goal of Rs 20 crore in 15 years.

Investing is a long-term commitment, and regular reviews of your portfolio are essential to ensure it remains aligned with your goals. As you get closer to retirement, consider gradually shifting your portfolio towards more stable investments to protect your capital. However, for now, an aggressive yet focused strategy is key to reaching your ambitious financial goal.

Remember, every investment decision should be made with a clear understanding of your risk tolerance, time horizon, and financial objectives. By staying disciplined and focused, you can build the wealth you need to enjoy a comfortable retirement.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in

..Read more

Latest Questions
Milind

Milind Vadjikar  |741 Answers  |Ask -

Insurance, Stocks, MF, PF Expert - Answered on Dec 03, 2024

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What happens when a Mutual Fund company shuts down / gets sold off?
Ans: Hello;

If a mutual fund company gets sold or fails, the process is prescribed by SEBI:

In case MF company is Sold,
The new fund house may:
1. Continue the scheme with a new name and management.

2. Merge the scheme with similar funds and offer investors the option to exit without any exit load.

In case MF company shuts down,
The fund house will:
1. Pay out investors based on the fund's last recorded Net Asset Value (NAV) and the number of units the investor holds, after deducting expenses.

2. If the company is not in a position to do so then SEBI may liquidate the funds assets and distribute the proceeds to unit holders.

It is also pertinent to note that mutual fund regulation in India is one of the most stringent and hence best, from investor's point of view, globally.

This is not just in theory. We have seen how the Franklin Templeton abrupt closure of debt funds was handled with surgical precision, by SEBI, with no loss to unitholders.


Skin in the game regulation mandates that 20% salary of key mutual fund personnel and fund managers is paid in terms of units of their funds with a 3 year lock-in.

The stocks and bonds purchased by the AMC for the fund are held by a custodian, appointed by the trust that administers the fund.

The trust engages into a investment management agreement with the AMC for managing the fund as per their mandate and within regulatory guidelines.

Registrar and Transfer Agents handle the investor registration,kyc, maintaining records, providing account and tax statements etc.

Happy Investing;
X: @mars_invest

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Ravi

Ravi Mittal  |450 Answers  |Ask -

Dating, Relationships Expert - Answered on Dec 03, 2024

Asked by Anonymous - Dec 03, 2024Hindi
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Hello, my wife is Ugandan and I’m of English national, 30 years old and she’s 26, we met nearly a year ago and got married in uk with some of her friends and small family. We haven’t done kuchala (not sure if that’s correct spelling) yet and I’m feeling anxious for when the time comes. She said her family will kneel when they greet me and being white this is already stinging my moral (due to history). I also talked about moving in together before the meet the parents happen however she says she’s rather move in after? Currently this could take two years before going to Uganda, how should I proceed without overstepping her cultural beliefs as after all we are married and by my culture we should already be living together
Ans: Dear Anonymous,
It is very nice of you to be so considerate and sensitive while handling these cultural nuances. Let's discuss the kneeling tradition. It's a sign of respect and it's deeply rooted in Ugandan culture. While I understand your point of view, you also have to remember that it can have significant meaning to her and her family. I suggest you politely express your feelings and let her know why it is uncomfortable for you to see her family kneel. When you explain, mention how much her culture means to you as well. I am sure both of you can communicate and come to a compromise that makes you both happy. Just in case, they persist in following the ritual, just look at it as a gesture of love and respect and not submission.

About the moving in together part, in certain parts of the world, couples living together before the traditional wedding is not considered respectful. But since you are already married, you can try explaining to your wife how the living situation does not go against her cultural expectations. But if it is a really big deal for her and her family, consider seeing it from her perspective.

Communication is everything here. Look at every problem as a team; it's not your problem vs her problem. It's both of you vs the problems.

I hope this helps

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Radheshyam

Radheshyam Zanwar  |1088 Answers  |Ask -

MHT-CET, IIT-JEE, NEET-UG Expert - Answered on Dec 03, 2024

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I have received a job offer from Siecorp ,a Singapore based company though my posting would be at my hometown . They have asked me to submit all credentials related to education & job experiences which is quite normal but they have asked the following documents also which they said would help me to arrange through some agent by payment & the same would be reimbursed during first month of employment . Earlier also another overseas company asked for the same & I denied to make payment before having the job in hand . 1. Construction Health and Safety Technician (CHST) – Compulsory 2. OSHA Safety Certificate – Compulsory 3. Safety Trained Supervisor (STS) – Non-Compulsory Kindly advise whether these certificates are really required to be submitted to join any foreign company or any sort of cheating business regards,
Ans: Hello Bipradas.
From your query, it is clear that you have offered by job by a Singapore-based company and they are giving you a posting in your home town. You did not mention anything about the work culture of the company. It simply indicates that you are supposed to work from home which is always related to computers. I think there is no harm in producing the required documents through an agent if they are offering you a handsome salary. The requirement for documents differs from company to company. There is no harm in submitting the mentioned documents. If have fear in your mind, then please go through the profile of the company in detail before submitting the documents. There are many ways to check the authenticity of the company. There are some chances of cheating, but everybody is not indulged in the same category. But take the steps with utmost precaution.

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Radheshyam

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