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: 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

Ans: Your portfolio consists of multiple actively managed funds across different categories. While it has a good mix of large-cap, mid-cap, and small-cap funds, there are areas where adjustments can improve diversification and risk management.

Strengths of Your Portfolio
Your long-term investment horizon of 10 years allows for compounding and wealth creation.

You have exposure to different market caps, which provides a balance of stability and growth.

Actively managed funds can generate higher returns compared to passive funds.

Concerns in Your Portfolio
You are holding too many funds, leading to unnecessary duplication. More funds do not always mean better diversification.

Your portfolio has excessive allocation to sectoral funds, which increases concentration risk. If the sector underperforms, your returns will be affected.

Some funds have overlapping holdings, reducing the overall diversification benefit.

You have multiple funds from the same asset management company, limiting exposure to different investment styles.

Recommended Portfolio Adjustments
Retain a well-performing large & mid-cap fund instead of holding multiple funds in this category.

Maintain exposure to small-cap or mid-cap funds but avoid holding multiple funds with similar strategies.

A single focused fund is sufficient. Too many concentrated portfolios increase risk without adding significant benefits.

Reduce exposure to sector-specific funds. While sectoral funds can deliver high returns, they carry higher volatility and depend heavily on the sector’s performance. A more diversified approach is recommended.

Instead of multiple funds in the same category, consolidate into a few high-quality diversified equity funds that provide stable long-term growth.

Include a flexi-cap fund to enhance diversification and give fund managers the flexibility to invest across market capitalizations.

Final Insights
Your investment approach is well-structured, but simplifying your portfolio will improve returns and make it easier to manage.

Reducing sectoral allocation and consolidating overlapping funds will improve efficiency and stability.

A diversified and well-balanced portfolio with a mix of large-cap, mid-cap, small-cap, and flexi-cap funds will ensure long-term growth with controlled risk.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner,

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

Ans: Hi Sandeep,

You have mentioned a total of 8 MF schemes for your investment of 28000 per month.
As details regarding your goal and requirement is not available, it is difficult to judge the overall portfolio from that point of view.
The schemes mentioned though are different names but will have a lot of overlap especially when you consider large cap stocks in their portfolio - HDFC Large & Mid / HDFC Large / HFDC Focused 30 and even the 3 Infra funds.

I believe the idea was to diversify your portfolio thru multiple schemes and if so, that is not really achieved.

Assuming you want to invest for over 10 year period, I suggest you keep your portfolio relatively simple with 4-5 schemes - 1 large cap (6000 in HDFC Large is ok), 1 Mid cap (6000 in HDFC Mid-cap or Motilal Oswal Midcap), 1 Small Cap (6000 in Nippon Small cap is ok) and 1 Infra (as you have shown inclination to Infra, 4000 in ICICI Pru Infra is ok) and add 1 Flexicap (6000 in Parag Parikh Flexicap which also has some overseas exposure). This will provide good diversification and less overlap.

This will provide good diversification and asset allocation across market caps.

Thanks & Regards
Janak Patel
Certified Financial Planner.

Ans: Your investment approach shows a good mix of large, mid, and small-cap funds. However, there are areas where adjustments can improve risk management and returns.

Review of Existing Portfolio
Large Cap Exposure (Rs 3,000/month)

Large-cap funds offer stability.

The allocation here is low compared to mid and small caps.

A slight increase may help balance volatility.

Large & Mid Cap Exposure (Rs 5,000/month)

This fund gives exposure to both stable and growth-oriented stocks.

Keeping this allocation is fine.

Mid Cap Exposure (Rs 3,000/month)

Mid-cap funds can give high returns but are volatile.

Exposure is reasonable but should not be increased further.

Small Cap Exposure (Rs 5,000/month)

Small caps have high growth potential but also high risk.

Reducing this allocation slightly may help manage risk.

Focused Fund (Rs 3,000/month)

These funds hold fewer stocks, increasing concentration risk.

If risk appetite is low, consider switching to a more diversified fund.

Infrastructure Fund (Rs 3,000/month)

Thematic funds like this are sector-specific.

These are cyclical and may not perform consistently.

If diversification is a priority, this can be switched to a multi-sector fund.

Flexi Cap Exposure (Rs 4,000/month)

Flexi-cap funds offer flexibility across market caps.

This is a good choice and can be continued.

Contra Fund (Rs 4,000/month)

Contra funds follow a contrarian strategy, buying undervalued stocks.

These are good for long-term investing.

Keeping this allocation is fine.

Suggested Adjustments
Reduce small-cap allocation to Rs 3,000/month.

Increase large-cap allocation to Rs 5,000/month.

Consider switching out of the infrastructure fund to a more diversified fund.

If risk appetite is moderate, shift from focused fund to a flexi-cap or large & mid-cap fund.

These changes will improve diversification, reduce risk, and maintain growth potential.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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