Hello Sir. I am investing via Lumsum monthly in SBI Bluechip (3k), PGIM Mid Cap(3k), Tata Digital Fund (3k), DSP Tax Saver (3k), Miare asset tax Saver (2k), Tata Small Cap ( 3K) all in Direct growth. Please review my funds and suggest can I add one more fund Parag Fflexi cap to diversified the investment ? what will be return after 10 years ?

Ans: Congratulations on consistently investing in mutual funds through SIPs for the last ten years. This discipline is commendable and crucial for wealth creation. Your goal of building a Rs. 1 crore corpus in the next ten years is achievable with a well-balanced and strategic portfolio. Let’s review your current portfolio and suggest necessary adjustments.

Portfolio Review and Assessment
Current Portfolio
SBI Small Cap Fund Regular Growth: Rs. 2000
SBI Long Term Equity Fund: Rs. 1000
SBI Equity Hybrid Fund Regular: Rs. 1000
Motilal Oswal Midcap 30: Rs. 1000
L&T Tax Advantage Fund - Growth: Rs. 1000
HDFC Top 100 Fund - Regular Plan: Rs. 1000
DSP Top 100 Equity Fund - Regular: Rs. 1000
DSP Tax Saver Fund - Regular Plan: Rs. 3000
Axis Bluechip Fund - Regular: Rs. 3000
Axis Flexi Cap Fund - Regular Growth: Rs. 2000
DSP US Flexible Equity Fund - Growth: Rs. 1000
Diversification and Fund Overlap
Analysis of Fund Types
Small Cap Fund: SBI Small Cap Fund
ELSS Funds: SBI Long Term Equity Fund, DSP Tax Saver Fund, L&T Tax Advantage Fund
Hybrid Fund: SBI Equity Hybrid Fund
Midcap Fund: Motilal Oswal Midcap 30
Large Cap Funds: HDFC Top 100 Fund, DSP Top 100 Equity Fund, Axis Bluechip Fund
Flexi Cap Funds: Axis Flexi Cap Fund
International Fund: DSP US Flexible Equity Fund
Suggested Changes
Reducing Redundancies
Your portfolio has multiple funds in similar categories, which might lead to overlapping. Reducing the number of funds can streamline your portfolio and enhance returns. Here are some suggestions:

Consolidate Large Cap Funds: You have three large cap funds (HDFC Top 100, DSP Top 100, Axis Bluechip). Choose the best performer and consolidate the investment.

Consolidate ELSS Funds: You have three ELSS funds (SBI Long Term Equity, DSP Tax Saver, L&T Tax Advantage). Pick one or two with the best performance and consistency.

Review Hybrid Fund: Hybrid funds provide balanced exposure. Evaluate if the SBI Equity Hybrid Fund aligns with your risk profile and goals. If not, consider redirecting this investment to better-performing equity funds.

Strategic Allocation
Balanced Allocation
Equity Funds: Focus on a mix of large cap, mid cap, and small cap funds for growth potential. A well-diversified portfolio can mitigate risks while maximizing returns.

Tax Saving: Continue with one or two ELSS funds for tax saving under Section 80C.

International Exposure: Retain a portion in international funds like DSP US Flexible Equity to diversify geographical risks.

Sample Rebalanced Portfolio
Large Cap: Choose one or two from HDFC Top 100 Fund, DSP Top 100 Equity Fund, Axis Bluechip Fund (Rs. 6000)

Mid Cap: Continue with Motilal Oswal Midcap 30 (Rs. 1000)

Small Cap: Continue with SBI Small Cap Fund (Rs. 2000)

Flexi Cap: Continue with Axis Flexi Cap Fund (Rs. 2000)

Tax Saving (ELSS): Select one or two from SBI Long Term Equity Fund, DSP Tax Saver Fund, L&T Tax Advantage Fund (Rs. 4000)

International Fund: Continue with DSP US Flexible Equity Fund (Rs. 1000)

Planning for Rs. 1 Crore Corpus
Regular Review
Monitor your portfolio regularly. Track the performance of your funds at least once a year and make adjustments as needed. Consistent review ensures alignment with your goals and market changes.

Increase SIP Amount Gradually
To achieve a corpus of Rs. 1 crore in ten years, consider gradually increasing your SIP amount. As your income grows, scaling up your investments can significantly impact your corpus.

Role of a Certified Financial Planner
A Certified Financial Planner (CFP) can provide personalized advice. They can help create a customized roadmap, considering your risk profile, goals, and market conditions. Consulting a CFP ensures your investments align with your financial objectives and market dynamics.

Systematic Withdrawal Plan (SWP)
For future planning, consider a Systematic Withdrawal Plan (SWP) during retirement. SWP allows you to withdraw a fixed amount regularly from your mutual fund investments. This provides a steady income while keeping the principal invested, ensuring continued growth.

Conclusion
Your disciplined investment approach is commendable. By streamlining your portfolio, focusing on well-performing funds, and regularly reviewing your investments, you can achieve your goal of a Rs. 1 crore corpus. Consult a Certified Financial Planner to tailor your strategy further.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: Hello and thanks for writing to me. Your investments are in good schemes and you can continue to invest in them.

Ans: Considering your current portfolio and investment strategy, here are some recommendations to modify and optimize your mutual fund investments:

Shift from Direct Funds to Regular Funds: Consider switching from direct funds to regular funds, as they provide professional guidance and emotional support through a certified financial advisor or mutual fund distributor (MFD). Regular funds also offer similar returns without the need for active monitoring.
Diversify into Diversified Equity Funds: Instead of thematic funds like SBI Infrastructure and Tata Resource & Energy Fund, which carry higher risk due to their focused approach, consider diversifying into diversified equity funds. These funds invest across various sectors and companies, providing better risk-adjusted returns over the long term.
Consolidate SIPs into Fewer Funds: Review your SIPs and consider consolidating them into fewer funds to simplify your investment portfolio and reduce administrative hassle. Focus on quality diversified equity funds with a proven track record of consistent performance.
Consider Large Cap Funds: Include large-cap funds in your portfolio for stability and capital preservation. These funds invest in established companies with a track record of stable earnings and dividends, offering relatively lower risk compared to mid-cap and small-cap funds.
Evaluate Tax Planning Funds: Assess the necessity of tax-saving funds (ELSS) like Mirae Asset Tax Saver. While they offer tax benefits under Section 80C of the Income Tax Act, ensure they align with your overall investment objectives and risk profile.
Monitor and Rebalance Regularly: Regularly monitor your mutual fund investments and rebalance your portfolio periodically to align with your financial goals, risk tolerance, and market conditions. Seek professional guidance from a certified financial planner or mutual fund distributor to make informed decisions.
Stay Invested for the Long Term: Maintain a long-term perspective and avoid frequent churning of your portfolio based on short-term market fluctuations. Stay disciplined and committed to your investment strategy to achieve your financial objectives over time.
By following these recommendations and working closely with a qualified financial advisor or mutual fund distributor, you can optimize your mutual fund portfolio for better risk management and long-term wealth creation.