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Ramalingam

Ramalingam Kalirajan  |2375 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 18, 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
Gkp Question by Gkp on Apr 17, 2024Hindi
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Hello Financial Experts, I'm 36 years old software Engineer, Investing average of 40K in SIPs for 3 years now and need some guidance or suggestions and below is my current portfolio looks like for a long term goal of 15 years to stand the large corpus. HDFC multicap Direct Growth - 10k Quant Gold Savings fund - 10k Quant small cap fund - 10k Axis small cap fund 10k UTI Nifty 50 index fund - 5k 360 One Focused fund - 5k Based on reports, mostly are equity funds and large cap portion is less compared to small/midcap. Thinking to start one large cap fund or Flexi Cap with 20 K initially, what would be some options? Any help here would be much appreciated!!

Ans: Given your current portfolio and long-term goal of 15 years, diversifying further can help balance risk. You're right in considering adding a large-cap or flexi-cap fund. For a large-cap fund, you might consider well-established funds with a consistent track record. Flexi-cap funds offer flexibility to invest across market caps, providing diversification. Research funds that have a blend of large, mid, and small-cap exposure for balanced growth. Some popular large-cap and flexi-cap funds have shown consistent performance over the years. Consulting with a financial advisor can offer personalized recommendations tailored to your needs.
Asked on - Apr 18, 2024 | Answered on Apr 18, 2024
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Thanks a bunch for the response Mr.Ramalingam sir. I would really appreciate if you can shed some light on few flexi cap funds. Do you think I have to stop any current fund or continue with same and add either of large or flexi cap fund to the folio for diversification and risk appetite. I have twin girls of age 2 and wanted to save big numbers for their future alongside. Thanks for your time again!!
Ans: Flexi cap funds are a popular category in mutual funds that offer flexibility in terms of investment across market capitalizations (large cap, mid cap, and small cap). These funds can adapt to market conditions and capitalize on opportunities across sectors and market segments.

Advantages of Flexi Cap Funds:

Diversification: Flexi cap funds invest across market caps and sectors, providing diversification and potentially reducing portfolio volatility.
Flexibility: The fund manager has the flexibility to shift allocations based on market conditions, which can help in capitalizing on opportunities and managing risks.
Potential for Growth: Flexi cap funds can benefit from growth opportunities across the market spectrum, from large established companies to smaller, high-growth potential companies.
Should you stop or continue with current funds?

Assess Current Portfolio: Evaluate your current mutual fund portfolio to understand its composition, performance, and alignment with your investment goals.
Check Overlapping: If your current funds already have significant exposure to large cap stocks, adding a flexi cap fund can provide exposure to mid and small cap segments, enhancing diversification.
Risk Appetite and Diversification: If you have a moderate to high-risk appetite and are looking for diversification across market caps, adding a flexi cap fund can be beneficial. However, if your current portfolio is well-diversified and aligned with your risk profile and investment goals, there may not be a need to stop any existing funds.
Performance Review: Regularly review the performance of your existing funds. If any fund consistently underperforms its benchmark or peers, consider replacing it with a better-performing option.
Considerations for Investing for Twin Girls' Future:

Long-Term Horizon: Since your twin girls are just 2 years old, you have a long-term investment horizon. Flexi cap funds, with their adaptability and potential for growth, can be suitable for long-term investment goals.
Risk Tolerance: While aiming for high returns, it's crucial to consider your risk tolerance. Ensure your investment strategy aligns with your risk tolerance to avoid potential stress during market downturns.
Regular Review: As your daughters grow and their financial needs evolve, regularly review and adjust your investment strategy to ensure it remains aligned with their future goals.
Consultation with Financial Planner: Given the importance of saving for your daughters' future, it's highly recommended to consult with a certified financial plannerr. They can provide personalized advice based on a thorough understanding of your financial situation, goals, and risk tolerance.
Remember, while flexi cap funds can be a valuable addition to your investment portfolio, it's crucial to choose funds that align with your investment goals, risk tolerance, and time horizon. Always consider seeking professional advice before making investment decisions.
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  |2375 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 08, 2024

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I am 26 years old and investing Rs.5100 each in Kotak Small Cap Fund & PP Flexi Cap Fund, through SIP since last 18 months. I have a long term view of over 10 years and may even like to continue even after 10 years. These fund have not shown much appreciation in last 2 years. Is there any need to review my investiment or I may continue above SIPs ? I am also thinking to start another SIP of 5000 in a large cap fund i.e. Mirae Asset Emerging Bluechip Fund, for a long term view. Whether it will be a good decision OR please suggest any other good option for large cap fund. Please guide.
Ans: Given your long-term investment horizon and diversified portfolio, it's natural to experience periods of lower growth or volatility, especially in specific market segments like small caps. However, it's essential to periodically review your investments to ensure they align with your financial goals and risk tolerance.

Considering your existing SIPs in Kotak Small Cap Fund and PP Flexi Cap Fund, it's advisable to assess their performance against their respective benchmarks and peer funds. If they consistently underperform, you may consider reallocating or discontinuing these SIPs.

Regarding starting a new SIP in Mirae Asset Emerging Bluechip Fund or any other large-cap fund, it's a prudent move to diversify your portfolio across different market segments. However, before making a decision, thoroughly research the fund's historical performance, fund manager's track record, expense ratio, and investment philosophy.

Alternatively, you can explore other large-cap funds known for consistent performance and stability, ensuring they complement your existing investments and contribute to your long-term financial objectives.

Remember, regular portfolio reviews and adjustments are crucial to optimize returns and mitigate risks over the long term. Consulting a financial advisor can provide personalized guidance based on your individual circumstances and investment goals.

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Ramalingam

Ramalingam Kalirajan  |2375 Answers  |Ask -

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

Asked by Anonymous - Apr 16, 2024Hindi
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I am 41, with take home salary of 2L/month. I want to retire early and live a sustainable life. Considering family income of 3.3L/month and expenses close to 1.1L/month, I have no loans, owns house without HL. I have invested 1 Cr is agricultural land and leased and rental income of 24% ROI. I also have a Bajaj goal assure ulip of 1L/yr since 2018 for 15 yrs premium paying term and 20 yrs of maturity and newly purchased another ulip in midcap 150 index fund of 2.5L/yr for 10 yrs payment term and withdrawal after 25 yrs. I have a corpus of 1 Cr and want to know good instruments which can help me retire b/w 55-60 yrs. I want to grow my capital aggressively considering Indian economy will grow in the future. Pls suggest if Lumpsum investment is recommended or SIP considering the surplus I have for investment now. Where should the entire amount be invested temporarily till everything is invested over time if SIP or SWP options are considered. Kindly suggest.
Ans: Planning for Early Retirement with Aggressive Growth Strategy
Compliments on Your Financial Discipline
You have a well-structured financial situation with no loans and significant investments. Your approach to early retirement with a focus on aggressive growth is commendable.

Current Financial Overview
Monthly Take Home Salary: Rs. 2 lakhs.
Total Family Income: Rs. 3.3 lakhs.
Monthly Expenses: Rs. 1.1 lakh.
Investments: Rs. 1 crore in agricultural land with 24% ROI.
ULIP Policies: Bajaj Goal Assure ULIP (Rs. 1 lakh/year for 15 years) and Midcap 150 Index ULIP (Rs. 2.5 lakhs/year for 10 years).
Corpus: Rs. 1 crore.
Investment Strategy for Retirement
Asset Allocation:

Diversify your portfolio across various asset classes such as equity, debt, and gold to manage risk and maximize returns.
Equity Investments:

SIP in Equity Mutual Funds: Given the long-term horizon, SIPs in equity mutual funds are recommended. Focus on a mix of large-cap, mid-cap, and small-cap funds for diversification.
Lumpsum Investment: You can invest a portion of your corpus in equity funds through Systematic Transfer Plan (STP) to mitigate market volatility. Start with a lump sum in a liquid fund and systematically transfer to equity funds.
Debt Instruments:

Debt Mutual Funds: Allocate a portion to debt mutual funds for stability and regular income.
Public Provident Fund (PPF): This is a safe option with tax benefits and should be part of your debt portfolio.
Gold:

Sovereign Gold Bonds (SGBs): These are government-backed and provide a regular interest along with capital appreciation linked to gold prices.
Emergency Fund:

Maintain an emergency fund covering 6-12 months of expenses in a high-yield savings account or liquid fund.
Temporary Investment Until SIP Deployment
Liquid Funds: Park your corpus in liquid funds temporarily. These funds offer better returns than savings accounts and are highly liquid, allowing easy transfer to SIPs.
Systematic Transfer Plan (STP): Utilize STP to gradually move money from liquid funds to equity funds, reducing the impact of market volatility.
Recommended Mutual Fund Categories
Large Cap Funds:

Invest in large-cap funds for stable and consistent growth with lower risk.
Mid Cap and Small Cap Funds:

Allocate a portion to mid-cap and small-cap funds for higher growth potential, considering your aggressive growth strategy.
Flexi Cap Funds:

These funds invest across market capitalizations and provide flexibility to fund managers to optimize returns.
Balanced Advantage Funds:

These dynamically manage the allocation between equity and debt, providing a balanced approach to risk and return.
Tax Planning and ULIPs
Review ULIP Policies: Ensure the ULIP policies align with your financial goals. ULIPs often have higher charges compared to mutual funds, so consider this in your overall strategy.
Insurance-cum-investment schemes
Insurance-cum-investment schemes (ULIPs, endowment plans) offer a one-stop solution for insurance and investment needs. However, they might not be the best choice for pure investment due to:
• Lower Potential Returns: Guaranteed returns are usually lower than what MFs can offer through market exposure.
• Higher Costs: Multiple fees in insurance plans (allocation charges, admin fees) can reduce returns compared to the expense ratio of MFs.
• Limited Flexibility: Lock-in periods restrict access to your money, whereas MFs provide more flexibility.
MFs, on the other hand, focus solely on investment and offer:
• Potentially Higher Returns: Investments in stocks and bonds can lead to higher growth compared to guaranteed returns.
• Lower Costs: Expense ratios in MFs are generally lower than the multiple fees in insurance plans.
• Greater Control: You have a wider range of investment options and control over asset allocation to suit your risk appetite.
Consider your goals!
• Need life insurance? Term Insurance plans might be suitable.
• Focus on growing wealth? MFs might be a better option due to their flexibility and return potential.

Tax Benefits: Maximize your tax benefits through investments in PPF, NPS, and ELSS (Equity-Linked Savings Scheme) funds.
Conclusion
To retire between 55-60 years with a sustainable lifestyle, focus on an aggressive yet diversified investment strategy. Use a mix of SIPs in equity funds, debt funds, and gold investments. Temporarily park your lump sum in liquid funds and use STPs for gradual investment. Regularly review and adjust your portfolio to stay aligned with your financial goals.

Planning for early retirement is a significant decision, and your disciplined approach is praiseworthy. Continue to monitor and adapt your investments to ensure a secure and prosperous future.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

...Read more

Ramalingam

Ramalingam Kalirajan  |2375 Answers  |Ask -

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

Asked by Anonymous - Apr 14, 2024Hindi
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Sir, I am 44 years and want to invest in SIPs to collate a corpse of 6 Cr in next 15 years. I have below SIPs running since 2020. DSP flexi cap (G) - 20k per month Axis bluechip (G) -20k per month If you can suggest the right MF to invest and the distribution. Many thanks...
Ans: Building a Rs. 6 Crore Corpus in 15 Years
Commendable Start
You are already off to a strong start with your existing SIPs in DSP Flexi Cap and Axis Bluechip funds. Starting early and maintaining consistency are key to achieving your financial goals.

Assessing Current Investments
DSP Flexi Cap (G): Flexi cap funds provide diversification across market capitalizations, which balances risk and growth potential. This is a solid choice.

Axis Bluechip (G): Bluechip funds focus on large-cap stocks, offering stability and steady growth. This fund helps in reducing volatility in your portfolio.

Suggested Investment Strategy
To achieve a corpus of Rs. 6 Crore in 15 years, you may need to diversify further and increase your SIP amounts. Here’s a recommended strategy:

Increase SIP Amounts:

Based on your target, calculate the required monthly SIP amount. You may need to increase your total SIP amount from the current Rs. 40,000.
Diversify Across More Funds:

Adding more funds can help you capture different market segments and reduce risk.
Recommended Funds and Distribution
Large Cap Fund:

Continue with Axis Bluechip (G). Consider increasing your SIP in this fund to maintain stability.
Flexi Cap Fund:

Continue with DSP Flexi Cap (G). Flexi cap funds are versatile and can adjust to market conditions.
Mid Cap Fund:

Add a mid-cap fund for higher growth potential. These funds invest in companies with higher growth prospects but come with moderate risk.
Small Cap Fund:

Allocate a smaller portion to a small cap fund. These funds can provide significant growth but are more volatile.
Balanced Advantage Fund:

Include a balanced advantage fund. These funds dynamically adjust the allocation between equity and debt based on market conditions, providing stability.
Suggested Distribution
Axis Bluechip Fund: Increase SIP to Rs. 25,000 per month.
DSP Flexi Cap Fund: Increase SIP to Rs. 25,000 per month.
Mid Cap Fund: Start an SIP of Rs. 20,000 per month.
Small Cap Fund: Start an SIP of Rs. 15,000 per month.
Balanced Advantage Fund: Start an SIP of Rs. 15,000 per month.
Monitoring and Adjustments
Regular Reviews: Review your portfolio every 6-12 months. Ensure it aligns with your goals and risk tolerance.

Rebalancing: Rebalance your portfolio annually to maintain the desired asset allocation.

Step-Up SIPs: Increase your SIP amounts annually in line with your salary increments. This helps in achieving your goal faster.

Conclusion
Your goal of accumulating Rs. 6 Crore in 15 years is achievable with the right strategy. By increasing your SIP amounts, diversifying across different fund categories, and regularly reviewing your investments, you can stay on track to meet your financial objective.

Investing for the long term requires discipline and patience. You are on the right path, and with consistent efforts, you will achieve your goal.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

...Read more

Ramalingam

Ramalingam Kalirajan  |2375 Answers  |Ask -

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

Asked by Anonymous - Apr 28, 2024Hindi
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Sir namaskar 10 Sal 4 Mahina Mera service ho gaya tha 58 year ke bad pension Mein contribution band ho gaya tha Uske bad bhi final withdrawal Mein reason 55 year ka reason de rahe hain Aise Mein Main Kya kar sakta hun
Ans: Namaskar! You have completed 10 years and 4 months of service. After the age of 58, your pension contributions stopped. However, during final withdrawal, you are facing an issue with the reason being marked as 55 years.

Steps to Resolve Your Issue
Contact EPFO Office: Visit your nearest Employee Provident Fund Organization (EPFO) office. Explain your situation in detail and provide all necessary documents.

Document Verification: Ensure you have all relevant documents, such as your service certificate, age proof, and any previous communication with EPFO. These will help in verifying your correct service period and age.

Grievance Redressal: Use the EPFO grievance redressal portal. Register your grievance online and track its status. This can expedite the resolution process.

EPFO Grievance Portal: EPFO Grievance Management System
Employer Verification: Contact your employer’s HR department. They can verify your service records and provide additional support or documentation to correct the age error.

Correction Request: Submit a formal request for correction in the age/years of service in your EPFO records. This should be done through your employer or directly at the EPFO office.

Additional Tips
Follow-Up: Regularly follow up with the EPFO office. Persistent communication can help speed up the process.

Keep Records: Maintain copies of all correspondence and documents submitted. This will be useful for future reference and any potential follow-ups.

Seek Help: If you face difficulties, consider seeking help from a Certified Financial Planner. They can provide guidance on managing your pension and retirement funds effectively.

Conclusion
Addressing the discrepancy in your pension records is crucial. By following the steps above, you can correct the error and proceed with your final withdrawal smoothly. Stay patient and persistent.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

...Read more

Ramalingam

Ramalingam Kalirajan  |2375 Answers  |Ask -

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

Asked by Anonymous - Apr 28, 2024Hindi
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Hi RediffGURUS, please guide if i need to make changes in mutual-funds selection. I want to invest for retirement which is 19 years from now and need 3 CR. I have term insurance where i will receive bonus+SA in next 10 years of 60 lac, life insurance of 6 lac by 2026 which is bonus+SA, PPF currently have 5lac for 3 years, NPS currently have 2.83 lac for 3 years, sbi technology opportunities fund 87K for 3 years with 2K sip, just starting sip in may month sbi large and mid cap fund which is 1K with step up 10%, 1K in PGIM midcap opportunities with step up 10%, Parag parikh flexi fund 2K SIP. To save tax i invested in superannuation two months ago for 7K. Can you please help me if my mutual-funds selection are correct or need changes
Ans: You are already taking significant steps towards securing your financial future. Investing in mutual funds, term insurance, life insurance, PPF, and NPS demonstrates a commendable approach.

Assessing Your Current Portfolio
SBI Technology Opportunities Fund: Your investment in this fund for three years shows a focus on sector-specific growth. However, sector funds can be volatile. It’s essential to ensure that this aligns with your risk tolerance.

SBI Large and Mid Cap Fund: Starting an SIP in this fund is a good move. Large and mid-cap funds provide a balanced approach between stability and growth potential.

PGIM Midcap Opportunities Fund: Midcap funds are suitable for long-term growth but come with higher risk. Your step-up SIP plan indicates a disciplined investment approach.

Parag Parikh Flexi Cap Fund: This fund is known for its diversified approach. Investing in a flexi cap fund is wise as it offers exposure across market capitalizations.

Suggested Adjustments
Diversification: Ensure that your portfolio is well-diversified across different sectors and asset classes. Over-reliance on specific sectors can increase risk.

Risk Management: Balance your high-risk investments with more stable options. Consider adding some conservative funds to cushion against market volatility.

Additional Investment Suggestions
Balanced Funds: Consider adding balanced or hybrid funds to your portfolio. These funds invest in a mix of equity and debt, offering stability and growth.

Regular Review: Periodically review your investments to ensure they align with your goals. Adjust your portfolio based on market conditions and personal circumstances.

Long-Term Strategy
SIP Discipline: Continue with your disciplined SIP approach. Regular investments help in averaging out market fluctuations and build a substantial corpus over time.

Tax Efficiency: Utilize tax-efficient instruments like PPF and NPS. These not only provide tax benefits but also offer a stable return over the long term.

Step-Up SIPs: Your plan to step up SIPs by 10% annually is excellent. It ensures your investments grow in line with your income, helping you reach your financial goals faster.

Conclusion
Your current mutual fund selections are on the right track for achieving your retirement goal of 3 crores. Ensure diversification, manage risks, and periodically review your portfolio.

Planning for retirement can be complex, but your proactive approach is commendable. Keep up the good work, and stay focused on your goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

...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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