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37-year-old Earning 2.4L, Seeking Investment Advice

Ramalingam

Ramalingam Kalirajan  |8534 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Aug 19, 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
Asked by Anonymous - Aug 19, 2024Hindi
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Hello Sir, am 37, am earning around 2.4 L per month. Am having a home loan with 71k EMI per month, tenure is 8 years, already 3 years have passed. I do investment of 1.5L into Sukanya account for my daughter and 1.5L into PPF. I also do 40k per month SIP, that includes 10k Parag Parikh Flexicap fund, 6k Quant Active fund, 5k Motilal Oswal Midcap fund, 5k Quant Smallcap fund, 5k Canara Robeco Smallcap fund, 6k Tata Digital India fund and 3k ICICI prudential Nasdaq Index fund. Kindly review my investment portfolio and looking forward to your expert suggestions .

Ans: You have a well-structured portfolio with a mix of traditional and modern investment options. Here's a detailed review of your current investments:

1. Home Loan Consideration
EMI Commitment: Rs 71,000 per month is a significant portion of your income. With five years remaining on the loan, your focus should be on managing this efficiently without over-leveraging yourself.
2. Traditional Investments
Sukanya Samriddhi Account (SSA): Investing Rs 1.5 lakhs per year is a great move for your daughter's future. SSA offers tax benefits under Section 80C and provides a decent interest rate, ensuring a secure corpus for her education or marriage.

Public Provident Fund (PPF): Rs 1.5 lakhs annually in PPF is a prudent choice for long-term wealth creation. The tax-free interest and the secure nature of PPF make it an excellent tool for retirement planning.

3. SIP Portfolio Analysis
Diversification: Your SIPs are well-diversified across large-cap, mid-cap, small-cap, and sectoral funds, which is good for balancing risk and reward.

Fund Selection:

Parag Parikh Flexicap Fund: This fund is known for its consistent performance, with a mix of domestic and international equities. It adds stability to your portfolio.

Quant Active Fund: This fund is a good choice for active management and offers exposure to multiple sectors. However, Quant funds are known for their aggressive approach, so monitoring is key.

Motilal Oswal Midcap Fund: A focused approach on mid-cap stocks, which are riskier but offer higher growth potential. It’s a good fit for your risk appetite.

Quant Smallcap Fund and Canara Robeco Smallcap Fund: Small-cap funds can be volatile, but they offer high growth potential over the long term. Since you have two small-cap funds, you might consider if this exposure aligns with your risk tolerance.

Tata Digital India Fund: This sectoral fund focuses on the IT sector. While it has delivered strong returns, sectoral funds can be risky if the sector underperforms. Consider if you need this level of sectoral exposure.

ICICI Prudential Nasdaq Index Fund: While this fund gives exposure to global tech giants, it's tied to the performance of the Nasdaq index. Since it’s an index fund, it lacks active management, which could be a disadvantage in volatile markets.

4. Suggestions for Improvement
Review Small-Cap Exposure: You have a significant portion in small-cap funds. Small-cap funds can be volatile, and holding two such funds increases your risk. Consider consolidating or reducing exposure if it doesn't match your risk tolerance.

Reassess Sectoral Allocation: Your investment in Tata Digital India Fund ties you to one sector. If the sector performs poorly, your returns could be negatively impacted. Diversifying into a broader thematic fund might be a safer alternative.

Consider Active Management: The ICICI Prudential Nasdaq Index Fund, being an index fund, may not perform as well in bear markets. Consider switching to an actively managed international fund that can adapt to changing market conditions.

5. Final Insights
Your current investment strategy is robust, with a good mix of traditional and market-linked investments. However, you should regularly review your portfolio to ensure it aligns with your financial goals and risk tolerance. Consider consolidating your small-cap exposure and reassessing your sectoral allocation to reduce risk.

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  |8534 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 17, 2024

Asked by Anonymous - Apr 13, 2024Hindi
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My age is 32 and I earn 40,000 PM. I invest 11400/ month in MF. My investments are 2000 in UTI index equity fund, 2000 in Parag Parikh Flexi Fund, 2000 Quant Midcap Fund, 1500 Tata Small Cap fund, 1500 Nippon small cap fund, 1200 in Quant flexi cap, and 1200 in Axis Small cap. I have also invested a lump sum of 60,000 in Quant Infrastructure fund. Kindly advise if my portfolio is okay
Ans: Evaluating Your Mutual Fund Portfolio
At 32, investing in mutual funds with a disciplined approach is a commendable step towards building wealth for the future. Let's evaluate your current portfolio to ensure it aligns with your financial goals and risk tolerance.

Portfolio Composition
UTI Index Equity Fund:

Provides exposure to a diversified portfolio of large-cap stocks, tracking the performance of the underlying index. Offers stability and long-term growth potential.
Parag Parikh Flexi Fund:

A well-managed fund with a flexible investment approach across equity and debt securities. Known for its focus on quality stocks and global diversification.
Quant Midcap Fund:

Invests primarily in mid-cap companies with growth potential. Offers the opportunity for higher returns but comes with higher volatility.
Tata Small Cap Fund and Nippon Small Cap Fund:

Small-cap funds focus on companies with small market capitalization, offering high growth potential. However, they are more volatile and suitable for investors with a higher risk appetite.
Quant Flexi Cap and Axis Small Cap Fund:

Flexi-cap and small-cap funds provide flexibility to invest across market capitalizations. Ensure you're comfortable with the risk associated with small-cap investments.
Quant Infrastructure Fund (Lump Sum):

Infrastructure funds invest in companies involved in infrastructure development, such as construction, energy, and transportation. Consider the long-term prospects of the infrastructure sector and the fund's performance.
Assessing Portfolio Diversification
Your portfolio includes a mix of large-cap, mid-cap, and small-cap funds, offering diversification across market capitalizations. However, it's essential to review the overlap between funds to avoid concentration risk and ensure adequate diversification.

Portfolio Review and Optimization
Risk Assessment:

Evaluate your risk tolerance and investment horizon to determine if the current allocation aligns with your financial goals.
Performance Review:

Monitor the performance of individual funds and compare them against their benchmarks and peer group. Consider making adjustments if any funds consistently underperform.
Asset Allocation:

Ensure your asset allocation is balanced and in line with your risk profile. Consider rebalancing if necessary to maintain the desired mix of equity and debt investments.
Professional Advice:

Consider consulting with a Certified Financial Planner to review your portfolio and receive personalized recommendations based on your financial situation and goals.
Conclusion
Your mutual fund portfolio shows a diversified mix of investments across market capitalizations and sectors. Regularly review and assess your portfolio's performance to ensure it remains aligned with your financial objectives. Remember, investing is a long-term journey, and periodic adjustments may be necessary to navigate market fluctuations and achieve your wealth accumulation goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Latest Questions
Nayagam P

Nayagam P P  |5346 Answers  |Ask -

Career Counsellor - Answered on May 28, 2025

Asked by Anonymous - May 27, 2025
Career
My son got 98.25 percentile in jee mains. Can he get descent can branch. Should he take a drop? Please suggest
Ans: You have not mentioned above his performance in JEE-Advanced & Expected Score. Drop is not very advisable. Anyway, here is, How to Predict Your Son's Chances of Admission into NIT or IIIT or GFTI After JEE Main/Advanced Results – A Step-by-Step Guide

Providing precise admission chances for each student can be challenging. Here’s a simple yet effective 9-step method using JoSAA’s past-year opening and closing ranks. This approach gives you a fair estimate (though not 100% exact) of your admission chances based on the previous year’s data.

Step-by-Step Guide to Check Your Admission Chances Using JoSAA Data
Step 1: Collect Your Key Details
Before starting, note down the following details:

Your JEE Main percentile
Your category (General-Open, SC, ST, OBC-NCL, EWS, PwD categories)
Preferred institute types (NIT, IIIT, GFTI)
Preferred locations (or if you're open to any location in India)
List of at least 3 preferred academic programs (branches) as backups (instead of relying on just one option)
Step 2: Access JoSAA’s Official Opening & Closing Ranks
Go to Google and type: JoSAA Opening & Closing Ranks 2024
Click on the first search result (official JoSAA website).
You will land directly on JoSAA’s portal, where you can enter your details to check past-year cutoffs.
Step 3: Select the Round Number
JoSAA conducts five rounds of counseling.
For a safer estimate, choose Round 4, as most admissions are settled by this round.
Step 4: Choose the Institute Type
Select NIT, IIIT, or GFTI, depending on your preference.
If you are open to all types of institutes, check them one by one instead of selecting all at once.
Step 5: Select the Institute Name (Based on Location)
It is recommended to check institutes one by one, based on your preferred locations.
Avoid selecting ‘ALL’ at once, as it may create confusion.
Step 6: Select Your Preferred Academic Program (Branch)
Enter the branches you are interested in, one at a time, in your preferred order.
Step 7: Submit and Analyze Results
After selecting the relevant details, click the ‘SUBMIT’ button.
The system will display Opening & Closing Ranks of the selected institute and branch for different categories.
Step 8: Note Down the Opening & Closing Ranks
Maintain a notebook or diary to record the Opening & Closing Ranks for each institute and branch you are interested in.
This will serve as a quick reference during JoSAA counseling.
Step 9: Adjust Your Expectations on a Safer Side
Since Opening & Closing Ranks fluctuate slightly each year, always adjust the numbers for safety.
Example Calculation:
If the Opening & Closing Ranks for NIT Delhi | Mechanical Engineering | OPEN Category show 8622 & 26186 (for Home State), consider adjusting them to 8300 & 23000 (on a safer side).
If the Female Category rank is 34334 & 36212, adjust it to 31000 & 33000.
Follow this approach for Other State candidates and different categories.
Pro Tip: Adjust your expected rank slightly lower than the previous year's cutoffs for realistic expectations during JoSAA counseling.

Can This Method Be Used for JEE April & JEE Advanced?
Yes! You can repeat the same steps after your April JEE Main results to refine your admission possibilities.
You can also follow a similar process for JEE Advanced cutoffs when applying for IITs.

Have some other options also as back-ups instead of relying only on JEE/JoSAA.

Want to Learn More About JoSAA Counseling?
If you want detailed insights on JoSAA counseling, engineering entrance exams, preparation strategies, and engineering career options, check out EduJob360’s 180+ YouTube videos on this topic!

Hope this guide helps! All the best for your son's admission and a bright future!

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Nayagam P

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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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