Hi Dev, Greetings ! I have invested in HDFC Banking & Financial Services Fund lumpsum in NFO and presently going SIP @2000/- per month. Your suggestion Please. Best, cgopal

Ans:

Ans: Hi it's good to see you are investing from a young age , do continue and you can add nifty or sensex fund to complement your existing portfolio

Ans: Hello and thanks for writing to me. I am recommending some schemes keeping in mind that you want to have aggressive growth for your corpus. You can consider starting SIP's in :

1-UTI Small Cap Fund: Rs.20,000 per month.
2-Sundaram Small Cap Fund: Rs.20,000 per month
3-Kotak Small Cap Fund: Rs.15,000 per month
4-DSP Mid Cap Fund: 15,000 Per Month
5-SBI Magnum Midcap Fund: Rs.15,000 per month.
6-Tata Hybrid Equity Fund: Rs.7,500 per month.
7-Edelweiss Multi Asset Allocation Fund: Rs.7,500


Small and mid cap funds can and do outperform the larger market indices and hence the higher recommended allocation to mid and small cap funds. There are also 2 hybrid funds where the allocation is around 15% of your investible corpus. Periodic rebalancing is essential to ensure you are on the right track and stepping up your SIP's every year or more often can help you create a larger corpus.

I recommend you find a good financial advisor who can very clearly understand your own risk appetite and goals in order to help you craft a custom plan and help with rebalancing as per your own risk tolerances.

Ans: Selecting the Right SIP for Your Investment: A Comprehensive Guide

Understanding SIPs:

Systematic Investment Plans (SIPs) offer a disciplined approach to investing in mutual funds. By investing a fixed amount at regular intervals, investors can benefit from rupee cost averaging and the power of compounding.

Assessing Your Investment Goals:

Before selecting a SIP, it's crucial to identify your investment objectives, risk tolerance, and investment horizon. Are you investing for short-term goals like buying a car or a house, or is it for long-term wealth accumulation, such as retirement planning?

Matching Funds to Objectives:

Based on your goals, you can choose from a variety of mutual fund categories, including equity funds, debt funds, or hybrid funds. Each category offers different risk-return profiles, catering to diverse investor preferences.

Investment Horizon and Risk Profile:

For a SIP of Rs 20,000 per month, your investment horizon and risk profile play pivotal roles in fund selection. Equity funds are suitable for long-term wealth creation, but they come with higher volatility. Debt funds, on the other hand, provide stability but lower returns.

Recommendation:

Considering your investment horizon and the potential for wealth accumulation, investing in diversified equity funds through a SIP seems appropriate. These funds invest in a mix of large-cap, mid-cap, and small-cap stocks, spreading risk across different market segments.

Benefits of Active Management:

Opting for actively managed funds allows skilled fund managers to capitalize on market opportunities and navigate volatility effectively. Their expertise in stock selection and portfolio management can potentially enhance returns over the long term.

Disadvantages of Index Funds:

Index funds, while cost-effective, may not always outperform actively managed funds. They are restricted to tracking specific indices, potentially missing out on opportunities for alpha generation through active stock selection.

Consultation with a Certified Financial Planner:

Seeking advice from a Certified Financial Planner (CFP) can further streamline your investment decision. A CFP evaluates your financial situation, risk appetite, and goals to recommend suitable funds aligned with your objectives.

Conclusion:

In summary, for a SIP of Rs 20,000 per month, investing in diversified equity funds through active management offers the potential for long-term wealth creation. However, it's essential to consult with a CFP to ensure alignment with your financial goals and risk tolerance.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in