I am currently investing in the following MFs. Please advise if these are right MFs or I need to shift to something better:

ABSL Focused Div. investment
ABSL Focused Equity investment
ABSL Equity Fund Growth

Ans:

1. Axis Focused-25 fund growth (Investment About 52 %): Reduce the exposure and include Uti Equity Fund-growth Plan-growth and Parag Parikh Long Term Equity Fund- Regular Plan Growth

2. Axis Long Term Equity Fund Growth (About 35 %): Reduce the exposure and add Canara Robeco Equity Tax Saver Fund Regular Growth

3. Axis Blue Chip Fund (About 4 %): Please continue

4. Axis Equity Saver Fund (About 7 %): Kindly consider Axis Esg Equity Fund Regular Growth instead

5. ICICI Prudential Value Fund Series 20 (About 2 %): Please continue

Ans: This is fine; we can review it post 1 year

Ans: We don't know your risk appetite and goals but by the looks of your investments, we believe you have a long term horizon couple with aggressive risk profile. Last couple of months have seen fair value emerging in Midcap and Smallcap segment. Therefore, its a good time to exit your laggards. While the other two can be continued, Axis Midcap Fund can be replaced. The AMC is going through a lot of changes and while some of the funds have made a strong comeback, its risk-adjusted returns remains on the lower side.

Ans: Assessment of Mutual Fund Investments and Recommendations:

Your decision to invest in mutual funds reflects a proactive approach towards building long-term wealth. Let's evaluate your current investment strategy and provide recommendations to ensure you are on the right track.

Current Investment Analysis:

Parag Parikh Flexi Cap: Investing Rs. 30,000 per month in a flexi cap fund like Parag Parikh reflects a balanced approach, allowing exposure to companies across market capitalizations. Flexi cap funds offer flexibility to capitalize on opportunities across market segments, potentially enhancing returns.

Axis Small Cap: Allocating Rs. 35,000 per month to a small-cap fund like Axis Small Cap indicates a willingness to take on higher risk for potentially higher returns. Small-cap funds have the potential for significant growth but also carry higher volatility due to exposure to smaller companies.

Kotak Emerging Equity: Investing Rs. 35,000 monthly in an emerging equity fund like Kotak Emerging Equity aligns with a strategy focused on capitalizing on growth opportunities in emerging sectors and companies. These funds invest in stocks of companies with potential for rapid growth, albeit with higher risk.

Recommendations:

Diversification: While your current investment strategy displays a focused approach, it's essential to ensure adequate diversification across fund categories. Consider diversifying into other categories such as large-cap, multi-cap, or thematic funds to spread risk and capture opportunities across different market segments.

Risk Management: Given the higher risk associated with small-cap and emerging equity funds, it's crucial to assess your risk tolerance and ensure it aligns with your investment horizon and financial goals. Consider rebalancing your portfolio periodically to manage risk exposure effectively.

Regular Review: Regularly review your portfolio's performance and make adjustments as needed to stay aligned with your long-term financial objectives. Monitor the performance of individual funds and assess their consistency in delivering returns relative to their benchmarks and peers.

Professional Guidance: Consider consulting with a Certified Financial Planner (CFP) to evaluate your investment strategy comprehensively. A CFP can provide personalized advice tailored to your financial goals, risk tolerance, and investment horizon, ensuring your portfolio remains on track to achieve your objectives.

Periodic Rebalancing: Periodically rebalance your portfolio to maintain the desired asset allocation and risk profile. Rebalancing involves selling overweight assets and reallocating funds to underweighted ones, ensuring your portfolio remains aligned with your investment objectives.

By implementing these recommendations, you can enhance the effectiveness of your investment strategy and increase the likelihood of achieving your long-term financial goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in