Hello Hardik ji, hope you’re doing good. I have the following MFs running (except SBI, all are barely 6 months old) for which I want your advice and guidance on change of scheme or reshuffling of amount or whatever. SBI Contra: 15k per month SBI Small Cap: 20k per month SBI Equity Hybrid: 5k per month Quant Small Cap: 25k per month Quant Mid Cap: 10k per month Quant Flexi Cap: 8k per month Tata Digital India Fund: 12k per month Nippon India Growth: 5k per month Nippon India Nifty Smallcap 250: 2.5k per month Parag Parikh Flexi Cap: 7k per month Motilal Oswal Nasdaq 100: 5k per month ICICI Technology: 5k per month ICICI Transportation & Logistics Fund: 2.5 k per month HDFC Transportation & Logistics Fund: 5k per month UTI Flexi Cap: 5k per month Total investment: 1.34 Lac per month My goal is to create a corpus of about 3 cr in next 7 yrs. please suggest if I’m on the right track. Recently I did the portfolio balancing and terminated Axis MF schemes as they were not yielding good returns. Btw, my existing investments in MFs have already created a corpus of 30L.

Ans: considering if all these mutual funds give average return of 15% CAGR then you will require to do a SIP on 1,46,012/- per month. For an average return of 12% this value goes to 1,76,623/- per month. Both values are considered considering your current 30lakhs investments and a target of achieving 3cr at the end of 7th year.
You need to increase your SIP amount.

Ans: It's great to see you taking proactive steps towards managing your investments. Your diversified portfolio reflects a well-thought-out approach towards wealth creation. However, with a goal of accumulating 3 crores in the next 7 years, it's crucial to periodically review and rebalance your portfolio. Consider focusing on funds with a proven track record of consistent performance aligned with your risk tolerance and investment goals. Additionally, ensure that your portfolio reflects a balanced mix of equity and debt funds to mitigate risks effectively. Remember, the key to successful investing lies in staying informed, disciplined, and adaptable to changing market dynamics. Keep monitoring your investments regularly and don't hesitate to seek professional guidance when needed. Wishing you all the best on your financial journey!

Ans: Currently, your portfolio is over-diversified in similar AMCs and funds strategies. You have sectoral and thematic funds in your portfolio, which can be risky due to a lack of diversification, higher volatility, dependence on fund managers, and timing sensitivity. We recommend you to rebalance your portfolio and reduce your exposure to similar category funds.

According to the above data, the current ongoing SIP is Rs. 1,34,000, and the total corpus is Rs. 30 Lakhs.

Since you have an equity-oriented portfolio and your ongoing SIPs are invested in equity funds with a long term horizon (7 years), we are assuming a 12% rate of return for the portfolio. According to our calculation, you will accumulate a total corpus of Rs. 2.44 Crore with the current investments of Rs. 30 lakhs and Rs. 1.34 Lakhs SIP after 7 years. To meet your goal, we recommend you to increase your SIP by approx. Rs. 46,000 i.e. a total SIP of Rs. 1,80,000 or make a lump sum investment of Rs. 25 Lakhs at present.

Ans: Assessing Your Mutual Fund Portfolio for Future Growth

Current Portfolio Analysis:

Your current mutual fund portfolio reflects a diversified mix of funds across various categories and themes. However, it's essential to evaluate each fund's performance and alignment with your financial goals to ensure you're on the right track.

Evaluation of Fund Choices:

SBI Contra and SBI Small Cap:

SBI Contra aims to invest in undervalued stocks, while SBI Small Cap focuses on small-cap companies. Both can offer growth opportunities but may be more volatile.
Consider reviewing their performance and risk profile periodically.
Quant Funds:

Quant funds use quantitative models for stock selection. These funds can provide a systematic approach to investing but may underperform in certain market conditions.
Assess the consistency of returns and consider whether they align with your risk tolerance.
Sectoral and Thematic Funds:

Tata Digital India, ICICI Technology, Nippon India Nifty Smallcap 250, Motilal Oswal Nasdaq 100, ICICI Transportation & Logistics, and HDFC Transportation & Logistics focus on specific sectors or themes.
While these funds can offer high returns during favorable market conditions, they also carry higher risk due to sector concentration.
Flexi Cap and Flexi-cap Funds:

Parag Parikh Flexi Cap and UTI Flexi Cap provide flexibility to invest across market capitalizations. These funds can adapt to changing market conditions but require active management.
Monitor their performance relative to the benchmark index and peer funds in the category.
Portfolio Adjustment and Future Strategy:

Review and Rebalance:

Regularly review your portfolio's performance against your investment goals and risk tolerance.
Consider rebalancing if any fund underperforms consistently or deviates significantly from its investment objective.
Risk Management:

Given your goal of creating a corpus of Rs. 3 crore in seven years, ensure your portfolio aligns with your risk appetite.
Consider reducing exposure to high-risk funds or sectors to mitigate downside risk.
Focus on Quality:

Prioritize funds with a track record of consistent performance, experienced fund managers, and strong investment processes.
Diversify across asset classes and investment styles to spread risk effectively.
Regular Monitoring:

Continuously monitor market developments, fund performance, and changes in your financial situation.
Stay informed about macroeconomic trends, regulatory changes, and global events that may impact your investments.
Conclusion:

Your existing mutual fund investments have laid a solid foundation for wealth creation, evidenced by the Rs. 30 lakh corpus already accumulated. However, to achieve your target of Rs. 3 crore in seven years, it's crucial to regularly assess and adjust your portfolio based on changing market conditions and your evolving financial goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in