I entered in MF investment very lately. i.e. in the age of 56 years. Now I am 60+ years. Due to private sector I may continue my service. But there is no guarantee from management side. I am investing monthly for Rs.23000 in the following Mutual since 4 years:

1)  Aditya Birla Sun Life MNC Fund Regular Growth – 1500

2)  Axis Bluechip Fund Regular Growth – 1500

3)  Axis Focused 25 Fund Regular Growth – 1500

4)  Canara Robeco Blue chip Equity Fund Regular Growth – 1500

5)  DSP Nifty 50 Equal Weight index Fund Regular Growth – 1500

6)  Franklin India Smaller Companies Fund Regular Growth – 3000

7)  HDFC Developed World Indexed FOF Growth – 500

8)  ICICI Prudential MNC Fund Growth – 500

9)  ICICI Prudential ESG Fund Growth – 1200

10)  ICICI Prudential Business Cycle Fund Growth – 1500

11)  Mirae Asset Midcap Emerging Bluechip Fund Regular Growth – 1500

12)  Mirae Asset Midcao Fund Regular Growth – 1500

13)  Parag Parikh Flexi Cap Fund Growth – 1300

14)  India Invesco Small Cap Fund Regular Growth – 1000

15)  Invesco India ESG Equity Fund Regular Growth – 500

16)  SBI Equity Hybrid Fund Regular Growth – 1500

17)  Tata Small Cap Fund Regular Growth – 1500

So far I have withdrawn amount of Rs.266000 due to financial crisis. Presently my investment in the above funds comes to about Rs.850000 and as per NAV it comes to more than Rs.1100000. I want to withdraw full and invest in SWP system as my service is no guarantee. Please suggest me good fund so that I can withdraw at least Rs.10000 p.m. for monthly livelihood.

Ans: Too many funds; please continue with 1, 3, 4, 5 and 11.

Keep the lumpsums invested.

Ans: Given your desire for aggressive growth in the next 3 years, it's crucial to assess your current mutual fund holdings and make informed decisions. Here are some considerations:

Performance Review: Evaluate the performance of your existing funds over the past few years. Look at their consistency, returns, and how they have performed during different market cycles.
Risk Appetite: Consider your risk tolerance and whether your current funds align with your risk profile. Aggressive funds typically carry higher risk, so ensure you are comfortable with potential volatility.
Diversification: Check the diversification of your portfolio across different fund types (large cap, mid cap, small cap) and sectors. A well-diversified portfolio can help mitigate risk.
Expense Ratio: Assess the expense ratio of your funds, especially if they are regular plans. Direct plans generally have lower expense ratios, which can significantly impact returns over the long term.
Exit Loads and Tax Implications: Understand any exit loads or tax implications associated with redeeming your existing investments, especially if they are less than 3 years old.
Consideration of Direct Plans: Switching to direct plans can save on expenses in the long run, potentially boosting returns. However, ensure you are comfortable with managing your investments independently or seek the assistance of a fee-based advisor.
After considering these factors, you can decide whether to continue with your current holdings, reallocate investments, or explore new funds that align better with your goals and risk appetite. It's essential to periodically review your portfolio and make adjustments as needed to stay on track with your financial objectives.

Ans: Hello Manoj,

It's great to see that you've been disciplined with your investments and have built a sizable corpus already. To assess if your current investments will help you achieve your goals of 8 crores in the next 10 years, let's take a closer look at your financial situation and goals.

Current Investments:
Mutual Funds: ~30.5 lakhs
Direct stocks: 30k
LIC policies and term insurance: Not considered for investment purposes
Bank FDs: 27 lakhs
PPF: 3 lakhs
Total: ~60.5 lakhs
Monthly SIP investments: ~45k
Now let's analyze your goals:

Children's marriage and education: 2 crores
Buying a home: 2 crores
Retirement life (in 10 years): 4 crores
Total: 8 crores
Assuming an average annual return of 12% on your equity investments, here's a rough projection of your portfolio's growth:

Current investments (60.5 lakhs) in 10 years: ~1.87 crores
Monthly SIPs (45k) in 10 years: ~1.05 crores
Total: ~2.92 crores
Based on this calculation, you would not reach your goal of 8 crores in the next 10 years. However, you can consider making some changes to improve your chances:

Reassess your goals: Consider if your goals are realistic and if there's any flexibility in the amounts or timelines.
Increase your SIP investments: As your salary increases, try to increase your SIP investments to accelerate your portfolio's growth.
Rebalance your portfolio: Regularly review your portfolio to ensure it's aligned with your risk appetite and financial goals. This may involve reducing the number of funds or shifting the allocation between equity and debt.
Monitor fund performance: Keep an eye on the performance of your funds and consider replacing underperforming ones.
Remember that financial planning is an ongoing process, and it's essential to periodically review and adjust your strategy. It's also a good idea to consult with a professional financial advisor to get personalized advice for your specific situation. While it might be challenging to achieve 8 crores within 10 years, these suggestions may help you get closer to your goals.

Best regards,

Ans: Hello Sushanta and thanks for writing to me. Please elaborate on your objectives and risk appetities to understand your needs and requirements better.

As a general rule, balanced advantage funds can be good schemes to begin SWP's.

Ans: Assessing and Optimizing Your Mutual Fund Portfolio for Aggressive Risk Appetite

As a Certified Financial Planner (CFP), I'll evaluate your mutual fund portfolio and suggest potential optimizations to align with your aggressive risk appetite and long-term financial goals.

Analyzing Current Portfolio Allocation and Diversification

Your portfolio comprises a diverse mix of equity funds spanning various market capitalizations and sectors. While this diversification can potentially enhance returns, it's crucial to assess the overall allocation and ensure it aligns with your risk appetite and investment objectives.

Identifying Overlapping Holdings and Concentration Risks

Reviewing your fund selection, I observe potential overlap in holdings across funds, leading to concentration risks. Overlapping investments may increase portfolio correlation and susceptibility to market fluctuations, necessitating a reassessment of fund selection to achieve better diversification.

Assessing Fund Performance and Consistency

Evaluating the performance of individual funds over different time horizons can provide insights into their ability to deliver consistent returns. It's essential to identify funds that have demonstrated resilience across market cycles and outperformed their benchmarks and peers over the long term.

Considering Expense Ratios and Fund Costs

Expense ratios and fund costs impact overall returns and should be scrutinized to ensure they align with the value proposition offered by each fund. While lower expense ratios are desirable, it's essential to weigh them against other factors such as fund performance and portfolio management quality.

Exploring Opportunities for Optimization and Rationalization

Given your aggressive risk appetite, optimizing your portfolio to enhance potential returns while managing risks is paramount. This may involve consolidating overlapping holdings, reallocating investments towards high-conviction funds, and introducing exposure to emerging themes or sectors with growth potential.

Emphasizing the Importance of Regular Monitoring and Review

As a CFP, I stress the significance of regular portfolio monitoring and review to adapt to changing market dynamics and investor preferences. Periodic reassessment of fund performance, asset allocation, and risk exposure can help optimize your portfolio and capitalize on emerging opportunities.

Seeking Professional Guidance for Portfolio Optimization

I recommend consulting with a qualified financial advisor or Mutual Fund Distributor (MFD) with a CFP credential to conduct a comprehensive portfolio review and optimization exercise. Professional guidance can provide valuable insights and recommendations tailored to your specific risk profile and investment objectives.

Making Informed Investment Decisions for Long-Term Wealth Creation

In conclusion, optimizing your mutual fund portfolio for aggressive risk appetite requires a strategic approach that balances potential returns with prudent risk management. By conducting thorough analysis, seeking professional guidance, and maintaining a disciplined investment approach, you can work towards achieving your long-term financial goals.

Best Regards,

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