Hello sir, i am 32 years old and just started a SIP investment of 7K per month for the following funds for wealth creation for next 10 - 15 years.
Core portfolio (60%)
1. Parag Parikh flexicap fund - 1.5K
2. JM Flexicap - 2K
3. Navi Nifty 50 - 0.5K
Satellite portfolio (40%)
1. Kotak Emerging Equity Fund - 0.8K
2. JM Midcap fund - 1K
3. Tata smallcap fund - 0.7K
4. Edelweiss midcap 150 momentum 50 - 0.5K
Could please review and advise me whether the above funds is to be considered good. Please provide some suggestions if changes required.
Ans: Your SIP portfolio seems well-diversified across various categories of equity funds, which is a good approach for long-term wealth creation. Let's review each fund and provide some suggestions:
Core Portfolio (60%):
Parag Parikh Flexicap Fund: This fund follows a flexible investment approach across large, mid, and small-cap stocks. It's known for its quality stock selection and has delivered consistent returns over the years.
JM Flexicap Fund: Another flexi-cap fund, providing exposure to companies across market capitalizations. Ensure you review its performance and consistency compared to peers.
Navi Nifty 50: Investing in an index fund like Navi Nifty 50 provides exposure to India's top 50 companies. It's a low-cost option with a focus on large-cap stocks.
Satellite Portfolio (40%):
Kotak Emerging Equity Fund: This fund focuses on emerging companies with high growth potential. Review its performance and ensure it aligns with your risk appetite.
JM Midcap Fund: Mid-cap funds like JM Midcap can offer higher growth potential but come with higher volatility. Monitor its performance and risk closely.
Tata Smallcap Fund: Investing in small-cap funds can provide exposure to high-growth companies. Ensure you're comfortable with the risk associated with small-cap investing.
Edelweiss Midcap 150 Momentum 50: This fund follows a momentum-based investment strategy, focusing on mid-cap stocks showing positive price momentum. Understand its investment approach and risk profile.
Suggestions:
Monitor Performance: Regularly review the performance of your funds and ensure they're meeting your expectations. Consider replacing underperforming funds with better alternatives.
Risk Management: Given the higher allocation to mid-cap and small-cap funds in your portfolio, be prepared for higher volatility. Ensure your risk tolerance aligns with the risk profile of these funds.
Review Fund Selection: Consider diversifying across fund houses to reduce concentration risk. Also, consider adding an international equity fund or a debt fund for further diversification.
Long-Term Perspective: Stay focused on your long-term investment horizon and avoid making knee-jerk reactions based on short-term market movements.
Overall, your SIP portfolio appears well-structured for wealth creation over the next 10-15 years. However, regularly monitoring and reviewing your portfolio's performance is essential to ensure it remains aligned with your financial goals and risk tolerance. Consider consulting with a financial advisor for personalized guidance based on your individual circumstances.
Asked on - Apr 27, 2024 | Answered on Apr 27, 2024
ListenThanks for your valuable feedback sir, could you please provide suggestions for fund selection for international equity and debt exposure.
Ans: Here's a guide to selecting an international equity fund and a debt fund for your Indian portfolio:
International Equity Fund:
Know your goals: Are you saving for a child's education abroad or your own retirement? Long-term goals can handle more volatility, allowing for exposure to developed and emerging markets.
Consider the cost: Actively managed funds can outperform but have higher fees. Index funds offer a low-cost way to track a specific market.
Pick a theme (optional): Do you want broad global exposure or focus on a specific region like the US or Asia?
Here's how a CFP can help:
Risk assessment: They'll understand your comfort level with fluctuations and recommend funds that match your risk tolerance.
Diversification: They can help you choose funds with minimal overlap to avoid putting all your eggs in one basket.
Long-term view: A CFP will focus on building a portfolio for your future, not chasing short-term fads.
Debt Fund:
Investment horizon: Short-term goals (less than 3 years) might benefit from low-duration debt funds with minimal interest rate risk. Longer goals can handle slightly higher volatility with options like corporate bond funds.
Credit quality: Consider the creditworthiness of the issuers (companies or government) in the debt fund. Higher credit quality generally offers lower returns but more stability.
Remember: Diversification is key! Don't invest all your money in just one international equity or debt fund. A CFP can help you create a balanced portfolio that aligns with your goals and risk appetite.