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Ramalingam

Ramalingam Kalirajan  |9255 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 23, 2025

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 - Apr 13, 2025
Money

Hello Sir/Ma'am, I hope you are doing good. I am 28 years old and i am currently doing 32000 rupees monthly sip with 12% annaul stepup in mutual funds. My investment horizon is for 20 to 25 years. my current portfolio is like : 1. 40%(Rs.12800) into Parag parik flexicap direct growth fund. 2. 10%(Rs.3200) into Kotak Nifty next 50 index fund. 3. 25%(Rs. 8000) into Kotak Nifty midcap 150 momentum 50 index fund. 4. 10%(Rs.3200) into Tata smallcap direct growth fund. 5. 10%(Rs. 3200) into Mirae assets nifty smallcap 250 momentum quality 100 index fund. 6. 5%(Rs. 1600) into motilal oswal nifty microcap 250 index fund. I am planning to stop investing in microcap 250 index fund and allocate that 5% into parag parik flexicap cap fund to make it 45%. Now, i have a lumpsum amount of Rs. 30 lakhs and i want to invest that amount into thses funds through STP. I am planning to invest 1. 45%(Rs.13,50,000) into Parag Parik flexicap. 2. 10%(Rs. 3,00,000) into Kotak Nifty next 50 index fund. 3. 25%(Rs. 7,50,000) into Kotak nifty midcap 150 momentum 50 index fund. 4. 10%(Rs. 3,00,000) into Tata smallcap fund. 5. 10%(Rs.3,00,000) into Mirae assets nifty smallcap 250 momentum quality 100 index fund. I am planning to do stp for 12 months. Could you suggest me for how many months should i do stp for this lumpsum amount, the investment horizon is for 15 to 20 years as markets are correcting right now should i increase the stp tenure or decrease it? Please give me suggestions. Thank you.

Ans: You have shown good discipline.

You are only 28 years old.

You are investing regularly through SIP.

You are also planning STP for your lump sum.

You have clear goals and long investment horizon.

You deserve appreciation for your efforts.

Now let us evaluate and guide you in a complete way.

Asset Allocation Assessment
You are investing Rs. 32,000 per month in SIPs.

You have done allocation across flexi cap, small cap, mid cap and index styles.

45% in flexi cap is a balanced decision. It gives active management and flexibility.

Momentum and quality themes are volatile. But over long term they can give better returns.

Small cap and mid cap allocations need monitoring. They are not for short horizon.

Micro cap index fund is very aggressive. Stopping that is a right step.

Overall, your allocation is youthful, aggressive and diversified.

Your horizon is long. So, risk appetite is acceptable.

Direct Plan Concerns
You are using direct plans.

Direct funds may look cheaper. But they lack expert guidance.

You may not get reviews, rebalancing, or personalised advice.

Wrong decisions can impact compounding for 20 years.

Direct funds miss the benefit of human judgement from a Certified Financial Planner.

Regular funds through a CFP ensure ongoing portfolio management.

CFPs help in risk management, STP review, tax planning, and more.

It's better to shift to regular funds through a CFP-certified Mutual Fund Distributor.

Disadvantages of Index Funds
You are using three index funds.

Index funds copy an index. They have no active decision-making.

When index falls, they fall equally. No protection.

Momentum-based index funds are very volatile.

They don't know when to exit a theme.

Actively managed funds adapt to market conditions.

They can reduce risks during market corrections.

A Certified Financial Planner can recommend better active options than index ones.

In long term, alpha matters more than expense ratio.

STP Strategy – Month-wise Analysis
STP is useful to reduce timing risk.

But too short an STP may enter at higher NAVs if market rises.

Too long an STP may leave funds in liquid for long. That reduces equity compounding.

12-month STP is decent if markets stay flat or volatile.

If market corrects more, 6-month STP may capture dips faster.

If market remains sideways or positive, 18-month STP may delay equity participation.

Your horizon is 15 to 20 years. So volatility now is not a concern.

Focus on discipline more than timing.

You may increase STP to 15 months. That balances volatility and equity capture.

Review every 3 months with a CFP and tweak if required.

Fund Category Insights
Flexi Cap Fund (45%) gives active management and exposure to all segments.

This fund should remain core in your portfolio.

Avoid increasing beyond 50%. That can reduce thematic benefits.

Mid Cap Momentum (25%) is suitable for 10+ years.

But monitor if it stays high-risk for too long.

Small Cap + Quality Index (20%) is good for long term. But volatile.

Monitor overlap between these two. Avoid duplication.

Next 50 Index (10%) lacks active control.

Consider replacing it later with a mid cap active fund.

Micro Cap exit is correct. It's speculative for your stage.

Lumpsum Deployment – 360 Degree View
Rs. 30 lakhs STP is a smart strategy.

Keep funds in an ultra short or liquid category fund.

Choose same AMC if possible. That makes STP smooth.

Deploy across 15 months.

Review NAVs every quarter. Take help of a CFP to adjust flows.

Don’t wait for perfect market level. Time in the market is more important.

Taxation Rules – Brief Awareness
Equity funds held over one year: gains above Rs. 1.25 lakh taxed at 12.5%.

Gains under one year taxed at 20%.

So hold each investment for more than a year ideally.

Reinvesting gains early will help save taxes.

Ongoing Monitoring Plan
Review portfolio once in 6 months.

Track performance vs benchmark. Also check risk level.

Check sector and stock overlaps.

Rebalance if any theme becomes more than 40%.

Avoid too many funds. It dilutes performance.

Stick to core-satellite model with core in flexi cap.

Don’t chase performance. Stay with long term winners.

Recommendations to Improve Portfolio
Replace direct funds with regular funds through CFP.

Reduce index fund exposure. Replace with active multi-cap or mid-cap funds.

Keep one small cap fund only. Quality theme is enough.

Don’t add sector funds or thematic funds now.

Focus on consistency, not returns.

Continue SIP with 12% increase. That’s a solid growth habit.

Risk Control Suggestions
Have emergency fund equal to 6 months expenses.

Don’t withdraw from these investments for any short-term needs.

Ensure health insurance and term insurance coverage.

Avoid taking personal loans. Don’t invest borrowed money.

If you hold any LIC, ULIP or investment-linked insurance, exit them.

Reinvest that money in mutual funds through CFP guidance.

Behavioural Tips
Don’t check NAVs daily. It adds unnecessary worry.

Avoid market predictions from news channels.

Stay patient when markets fall.

Stay invested when markets rise.

Remember, volatility is part of wealth creation.

Diversification Gaps
Your portfolio has size-based and theme-based diversification.

But fund house diversification is also important.

Avoid more than 40% in one AMC.

Consider reallocating among different AMCs for better risk control.

Importance of Certified Financial Planner
A CFP can help you stay on track.

They provide advice, monitoring, rebalancing and emotional support.

They help in tax planning, goal mapping and retirement forecasting.

Their expertise protects you from costly mistakes.

Avoid DIY for such large investments.

With Rs. 30 lakh STP, even 1% mistake is Rs. 30,000 loss.

Final Insights
You are doing many things right already.

SIP + STP + long horizon is a powerful combination.

Move from direct to regular funds with CFP guidance.

Reduce index exposure and increase active fund weight.

Stick to a disciplined STP of 15 months.

Review regularly with a Certified Financial Planner.

Avoid impulsive changes due to market news.

Let your money work in peace for 20 years.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
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  |9255 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 29, 2024

Money
Hello Sir/Ma'am, I hope you are doing well. Could you please provide your guidance regarding my investment portfolio? I am 46 years old and currently have a mutual fund portfolio valued at 2 crores, with an approximate XIRR of 23%. My objective is to invest an additional 1 crore in mutual funds. I plan to hold these investment for the next 6-7 years before making any withdrawals using the Systematic Withdrawal Plan (SWP). My goal is to achieve a total portfolio value of 6 crores in the next 5-6 years. At present, I am invested in 20 mutual funds, which I realize is quite a lot. Could you please review my current funds and suggest where I should invest the additional 1 crore? I would like to eliminate any unnecessary overlap and focus on investments that will help me achieve my goals. I am considering switching from Motilal Oswal Defence Index to Motilal Oswal Mid Cap and from Quant Infrastructure Fund to Quant Mid Cap. These are just preliminary ideas. Could you help me streamline my portfolio and recommend where to invest the additional 1 crore considering aggressive risk taker ? ##############LARGE Cap 1. ICICI Prudential Bluechip Fund - 18L ##############Flexi Cap 2. HDFC Flexi Cap Fund - 29L 3. Parag Parikh Flexi Cap - 17L 4. Quant Flexi Cap - 10L ############# Multi Cap 5. Nippon India MULTICAP FUND - 25L ############# Mid CAP 6. HDFC Mid Cap Opportunities - 14L 7. Motilal Oswal Mid cap - 5.5L #############Small Cap 8. KOTAK SMALL CAP FUND - 11L 9. ICICI Prudential Smallcap Fund - 5L 10. Tata Small Cap Growth Direct Plan - 4L 11. HDFC Small Cap Fund Direct - 2.6L 12. Nippon India Small Cap - 3.5L ############INDEX 13. HDFC Index Nifty 50 Growth Direct Plan - 10L 14. ICICI Prudential Nifty Midcap 150 Index Growth Direct Plan - 7L 15. HDFC NIFTY Smallcap 250 Index Fund Direct - 5L 16. Motilal Oswal Nifty Microcap 250 Index Growth Direct Plan - 2.5L 17. UTI Nifty200 Momentum 30 Index Growth Direct Plan - 11L 18. UTI Nifty Next 50 Index Growth Direct Plan - 11L 19. Motilal Oswal Nifty India Defence Index Growth Direct Plan - 2L ################# Thematic 20. Quant Infrastructure fund - 9.5L
Ans: Current Portfolio Overview
Your mutual fund portfolio is valued at Rs. 2 crores. You have an impressive XIRR of 23%. You plan to invest an additional Rs. 1 crore. You aim to achieve a portfolio value of Rs. 6 crores in 5-6 years. Your current investments are spread across 20 mutual funds.

This diversification is quite extensive. Streamlining is needed to avoid overlap and enhance performance.

Evaluating Fund Categories
Large Cap
ICICI Prudential Bluechip Fund - Rs. 18L
Bluechip funds provide stability. They should form the core of your portfolio.
Flexi Cap
HDFC Flexi Cap Fund - Rs. 29L
Parag Parikh Flexi Cap - Rs. 17L
Quant Flexi Cap - Rs. 10L
Flexi Cap funds offer balanced exposure. They adapt to market conditions.
Multi Cap
Nippon India Multi Cap Fund - Rs. 25L
Multi Cap funds provide a mix of large, mid, and small caps. They offer diversification within a single fund.
Mid Cap
HDFC Mid Cap Opportunities - Rs. 14L
Motilal Oswal Mid Cap - Rs. 5.5L
Mid Cap funds have higher growth potential. However, they are riskier.
Small Cap
KOTAK Small Cap Fund - Rs. 11L
ICICI Prudential Smallcap Fund - Rs. 5L
Tata Small Cap Growth Direct Plan - Rs. 4L
HDFC Small Cap Fund Direct - Rs. 2.6L
Nippon India Small Cap - Rs. 3.5L
Small Cap funds can deliver high returns. They are suitable for aggressive investors.
Index Funds
HDFC Index Nifty 50 Growth Direct Plan - Rs. 10L

ICICI Prudential Nifty Midcap 150 Index Growth Direct Plan - Rs. 7L

HDFC NIFTY Smallcap 250 Index Fund Direct - Rs. 5L

Motilal Oswal Nifty Microcap 250 Index Growth Direct Plan - Rs. 2.5L

UTI Nifty200 Momentum 30 Index Growth Direct Plan - Rs. 11L

UTI Nifty Next 50 Index Growth Direct Plan - Rs. 11L

Motilal Oswal Nifty India Defence Index Growth Direct Plan - Rs. 2L

Index funds have lower fees but lack active management benefits. Active funds can outperform by selecting high-potential stocks.
Thematic Funds
Quant Infrastructure Fund - Rs. 9.5L
Thematic funds focus on specific sectors. They offer higher risk and reward.
Portfolio Streamlining Suggestions
Reduce Overlap
Consolidate Flexi Cap funds. Keep one or two best-performing funds.
Reduce Mid Cap and Small Cap funds. Focus on top performers.
Minimize Index funds. Their passive nature may limit growth.
Recommended Fund Adjustments
Switch from Index funds to actively managed funds. Active funds can outperform the market. They offer better stock selection and management.
Consider reducing your Thematic fund exposure. They carry sector-specific risks.
New Investments
Allocate new Rs. 1 crore across top-performing Large Cap, Flexi Cap, and Small Cap funds.
Focus on funds with strong historical performance and potential.
Portfolio Allocation Strategy
Large Cap: 40% of your portfolio. They provide stability.
Flexi Cap: 30% of your portfolio. They adapt to market changes.
Small Cap: 20% of your portfolio. They offer high growth potential.
Thematic Funds: 10% of your portfolio. They add diversity and high risk-reward.
Final Insights
Streamlining your portfolio will reduce overlap and enhance returns. Focus on a mix of Large Cap, Flexi Cap, and Small Cap funds. Avoid over-diversification and index funds. Invest additional Rs. 1 crore in high-performing funds. This strategy will help achieve your goal of Rs. 6 crores.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in

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I got 95.18 %tile in mhtcet 2025 I am a girl from home state Maharashtra and an OBC candidate. Will i get ICT MUMBAI. If not then which college will be the best option to consider?
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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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