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Ramalingam

Ramalingam Kalirajan  |7201 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 15, 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
Shanky Question by Shanky on May 02, 2024Hindi
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Hello, I am 32 years old and have started investing in following funds. Please review. I am investing with a horizon of 10 - 15 years and ready to take risk. The investment is not linked to any specific goal but to save and create wealth. 1. Parag Parik - 10k 2. Kotak Multicap - 10k 3. Canra Rebocco Small Cap - 5k 4. Canara rebocco blue chip - 5k 5. ICICI PRU value discovery - 10k 6. AXIS Growth Opportunities - 9k 7. HDFC Balance Advantage - 7k 8. Groww Index Fund - 7k 6. Axis ELSS - 2.5k

Ans: It's great to see your proactive approach towards investing at the age of 32, with a clear horizon of 10-15 years and a willingness to take on risk to achieve your wealth creation goals. Let's review your investment portfolio to ensure alignment with your objectives.

Assessment of Fund Selection:

Parag Parikh Long Term Equity Fund (PPLTEF): This fund follows a flexible investment strategy, investing in a mix of Indian and foreign equities. It's known for its consistent performance and focus on quality stocks.

Kotak Standard Multicap Fund: Multicap funds offer diversification across market capitalizations. Kotak is a reputable AMC, and this fund has a strong track record of delivering steady returns over the long term.

Canara Robeco Small Cap Fund: Small-cap funds have the potential for high growth but come with higher volatility. Canara Robeco has a decent reputation, but small-cap investments require careful monitoring due to their inherent risk.

Canara Robeco Bluechip Equity Fund: Blue-chip funds invest in large-cap stocks known for their stability and reliability. This fund offers a conservative approach within your portfolio, balancing the risk associated with small-cap investments.

ICICI Prudential Value Discovery Fund: Value-oriented funds focus on undervalued stocks with growth potential. ICICI Pru is a trusted AMC, and this fund aims to deliver long-term capital appreciation.

Axis Growth Opportunities Fund: This fund targets growth-oriented companies across sectors. With a focus on mid and small-cap stocks, it adds diversification to your portfolio but may come with higher volatility.

HDFC Balanced Advantage Fund: Balanced advantage funds dynamically manage equity exposure based on market conditions. This can provide stability during market downturns while capturing growth opportunities during upswings.

Groww Index Fund: Index funds passively track market indices. While they offer low expense ratios and broad market exposure, they may underperform actively managed funds during certain market conditions.

Axis Long Term Equity Fund (ELSS): ELSS funds offer tax benefits under Section 80C of the Income Tax Act. Axis is a reputable AMC, and this fund invests predominantly in equity, providing potential for capital appreciation along with tax savings.

Overall Portfolio Assessment:

Your portfolio reflects a diversified mix of equity funds across market capitalizations and investment styles. It's well-suited for long-term wealth creation, considering your risk appetite and investment horizon.

Recommendation:

Regularly review your portfolio's performance and rebalance if necessary to maintain your desired asset allocation. Consider consulting with a Certified Financial Planner periodically to ensure your investments remain aligned with your financial goals.

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 08, 2024

Asked by Anonymous - Apr 12, 2024Hindi
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Hello Sir, I am 28 years old and currently investing in the following funds for the last 2 years.1. Uti Nifty 50 index (Rs.5000) 2. SBI Small Cap (Rs.4000) 3.Mirae Asset Large & Midcap(Rs2000) and 4.Motilal Oswal Nasdaq 100 fof(Rs.1000). I also intend to step up my SIPs in these funds in the upcoming years.My goal is wealth creation and I am looking for 15-20 years of investment. Kindly review the funds and suggest if I need to make any adjustments to them or add any new funds in my portfolio. Thank you.
Ans: Considering your investment horizon of 15-20 years and your goal of wealth creation, your current portfolio appears to be well-diversified across different market segments. Here's a review of your funds and some suggestions:
1. UTI Nifty 50 Index: Investing in a broad-market index fund like UTI Nifty 50 Index provides exposure to India's top 50 companies by market capitalization. It's a good choice for long-term wealth creation as it offers diversification across various sectors of the economy.
2. SBI Small Cap: Small-cap funds like SBI Small Cap have the potential for higher growth over the long term but come with higher volatility. Given your investment horizon, this fund can add an element of growth to your portfolio. However, be prepared for fluctuations in returns.
3. Mirae Asset Large & Midcap: This fund follows a blend of large-cap and mid-cap stocks, providing a balanced approach to growth and stability. It's suitable for investors seeking exposure to quality companies across market capitalizations.
4. Motilal Oswal Nasdaq 100 FOF: Investing in an international fund like Motilal Oswal Nasdaq 100 FOF adds global diversification to your portfolio. The Nasdaq 100 index comprises leading US technology and internet companies, offering growth opportunities beyond the Indian market.
Active vs. Passive Management:
While you've included both actively managed mutual funds and index funds (ETFs) in your portfolio, it's important to understand the differences between the two. Actively managed funds aim to outperform the market through active stock selection and portfolio management, while index funds passively track a specific index's performance.
Benefits of Actively Managed Funds:
Actively managed funds offer the potential for higher returns compared to index funds, especially during market inefficiencies or when skilled fund managers can identify lucrative investment opportunities. Additionally, active management allows for flexibility in portfolio construction and adjustments based on market conditions.
Potential Disadvantages of Index Funds:
While index funds offer low expense ratios and broad market exposure, they may lack the potential for outperformance compared to actively managed funds. Additionally, they're subject to tracking error, which occurs when the fund's performance deviates from the index it's designed to replicate.
Given your age and investment horizon, you have the flexibility to take on more risk for potentially higher returns. Here are a few suggestions:
1. Consider Adding a Mid-Cap Fund: Since you already have exposure to large-cap and small-cap segments, adding a mid-cap fund can further diversify your portfolio and capture growth opportunities in this segment.
2. Review Portfolio Allocation: Ensure your portfolio is well-balanced across different market segments to manage risk effectively. You may consider increasing or decreasing allocations to certain funds based on your risk tolerance and return expectations.
3. Regularly Review and Rebalance: Periodically review your portfolio's performance and make necessary adjustments to ensure it remains aligned with your long-term goals. Rebalancing can help maintain the desired asset allocation and manage risk.
Overall, your portfolio seems well-structured for long-term wealth creation. However, it's essential to monitor market developments and stay updated on fund performance to make informed decisions.
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 21, 2024

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Hi Sir, My name is Krishna & I am 38 years old and I have a savings of around 40Lakhs in bank in FD's and I started investing 20000 every month from Jan-2024 in these mutual funds [1. DSP Nifty 50 Equal Weight Index Fund Direct-Growth, 2. HDFC Index Fund Nifty 50 Plan - Direct Plan, 3. Nippon India Large Cap Fund - Direct Plan, 4. Edelweiss Large Cap Fund - Direct Plan, 5. ICICI Prudential Bluechip Fund - Direct Plan-Growth, 6. Kotak Emerging Equity Fund - Direct Plan, 7. Motilal Oswal Midcap Fund - Direct Plan, 8. Axis Small Cap Fund - Direct Plan, 9. Kotak Multi Asset Allocator FoF - Dynamic - Direct Plan, 10. Edelweiss Aggressive Hybrid Fund - Direct Plan]. I checked through money control and value research before investing in these mutual funds. I would like to keep investing till 50 years (currently 38yrs) for longterm holdings may be 7+ years to 12+ years. Kindly check my portfolio and please let me know if my investments are good.
Ans: Assessment of Mutual Fund Portfolio for Long-Term Investment

Krishna, it's commendable that you've taken the initiative to invest in mutual funds for your long-term financial well-being. Let's evaluate your portfolio to ensure it aligns with your investment objectives and risk tolerance.

Portfolio Composition Analysis

Your portfolio comprises a mix of large-cap, mid-cap, small-cap, hybrid, and index funds, reflecting diversification across different market segments. This diversification is essential for managing risk and capturing growth opportunities across various sectors of the economy.

Benefits of Diversification

Diversification is the cornerstone of sound investment strategy, helping spread risk across different asset classes and market segments. By investing in a mix of large-cap, mid-cap, and small-cap funds, you're positioned to benefit from the growth potential of companies of varying sizes.

Active vs. Passive Management

While index funds provide low-cost exposure to broad market indices, actively managed funds offer the potential for outperformance through skilled fund management. Your portfolio includes both actively managed funds and index funds, striking a balance between cost efficiency and potential returns.

Potential Areas of Improvement

Reviewing Fund Selection Criteria: While your research through Moneycontrol and Value Research is commendable, consider consulting with a Certified Financial Planner to validate your investment choices and ensure they align with your financial goals and risk tolerance.

Regular Portfolio Review: Given your investment horizon of 12+ years, it's crucial to conduct periodic portfolio reviews to assess fund performance, monitor changes in fund objectives or management, and rebalance your portfolio if necessary.

Asset Allocation Strategy: Evaluate your asset allocation strategy to ensure it's optimized for long-term growth and risk management. Consider factors such as age, risk tolerance, and investment goals when determining the ideal mix of equity and debt funds in your portfolio.

Final Recommendations

Seek Professional Advice: Consider consulting with a Certified Financial Planner to conduct a comprehensive review of your investment portfolio and provide personalized recommendations based on your financial goals and risk profile.

Stay Informed: Stay abreast of market developments, economic trends, and regulatory changes that may impact your investment portfolio. Continuous learning and informed decision-making are essential for long-term investment success.

Maintain Discipline: Maintain discipline in your investment approach by adhering to your long-term investment plan, avoiding impulsive decisions based on short-term market fluctuations, and staying committed to your financial goals.

In conclusion, while your current mutual fund portfolio demonstrates a proactive approach to long-term wealth accumulation, there's always room for refinement and optimization. By seeking professional guidance and staying disciplined in your investment journey, you can enhance the effectiveness of your portfolio and work towards achieving your financial aspirations.

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

...Read more

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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