Investing for Retirement: 46-Year-Old Seeks Help to Achieve Portfolio Goal

Ans: You may also consider the below:

• Samco Flexi Cap fund Growth
• Axis ESG Equity fund – Growth
• DSP Quant fund - Growth

Ans: Reviewing Your Current Portfolio
You have invested in many mutual funds since 2007. Let's streamline your portfolio to focus on a few high-performing funds.

Evaluating Fund Categories
Large Cap Funds
HSBC Large Cap Fund - Regular IDCW
DSP-BR Top 100 Equity - RP ICDW (D)
Sundaram Large Cap Fund Regular - IDCW
SBI Contra Fund (D)
Large Cap funds provide stability and steady growth. Keep funds with consistent performance.

Flexi Cap Funds
Franklin India Flexi Cap Fund - IDCW
Flexi Cap funds offer a balanced approach. They invest across large, mid, and small caps. Retain those with a strong track record.

Mid Cap Funds
SBI Magnum Midcap Fund (D)
Edelweiss Mid Cap Fund (Regular Plan - IDCW Option - Payout)
Mid Cap funds offer higher growth potential but come with higher risk. Retain the best performers.

Sector/Thematic Funds
Nippon India Power and Infra Fund
HDFC Infrastructure Fund (D)
HSBC Progressive Themes (D)
HSBC Advantage India Fund
Sector funds focus on specific industries. They can be volatile. Evaluate their performance and market outlook.

Diversified Equity Funds
DSP-BR India TIGER - RP (D)
Sundaram Diversify Equity Fund - Regular - IDCW
These funds invest in various sectors and companies. Retain those with strong, consistent returns.

Large and Mid Cap Funds

Mirae Asset Large and Midcap Fund (formerly Mirae Asset Emerging Bluechip Fund) - SIP
These funds balance between stability and growth. They are a good addition for diversification.

Children's Funds
HDFC Children's Gift Fund - Regular Plan (Lock-in) - SIP
These funds have a specific goal in mind. They are usually kept for a longer-term investment.

Consolidation Strategy
Reduce Overlap
Consolidate Large Cap funds. Choose one or two top performers.
Reduce the number of Sector funds. Focus on those with a positive outlook.
Keep the best-performing Mid Cap funds. Avoid too many in this category.
Focus on Performance
Retain funds with strong historical performance and potential.
Let go of funds with inconsistent returns or underperformance.
Allocate More to High Performers
Invest more in top-performing funds. This enhances returns and reduces management complexity.
Avoid spreading investments too thin across many funds.
Consider Fund Management Style
Opt for actively managed funds. They offer the potential for higher returns.
Avoid index funds due to their passive nature and lower flexibility.
Benefits of Regular Funds
Investing through an MFD with CFP credentials provides guidance.
Regular funds offer support and advice, unlike direct funds.
Suggested Actions
Large Cap and Flexi Cap Funds
Retain top-performing Large Cap and Flexi Cap funds. They provide stability and balanced growth.
Mid Cap and Sector Funds
Focus on the best-performing Mid Cap funds.
Retain Sector funds with positive outlooks. Evaluate their potential in the current market.
Diversified Equity Funds
Keep diversified funds with consistent returns. They provide broad exposure and reduce risk.
Children's Funds
Maintain investments in children's funds. They are aimed at long-term goals.
Final Insights
Streamlining your mutual fund portfolio is essential. Focus on a few high-performing funds. Consolidate your investments for better returns and easier management. Opt for actively managed funds and regular funds through MFD with CFP credentials. This strategy will help you achieve your financial goals effectively.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in

Ans: I appreciate your effort in building a structured investment portfolio. You have a good mix of asset classes. However, some refinements can improve returns and risk management.

Key Observations
You have a strong SIP commitment of Rs 1 lakh per month.

Your investment horizon is 7 years, which is medium-term.

Your risk appetite is moderate, but some holdings may not align.

Index funds and ETFs may limit your portfolio’s growth potential.

Issues in Your Current Portfolio
1. Over-Reliance on Index Funds
Index funds provide average market returns.

Actively managed funds can outperform in a 7-year horizon.

Index funds limit downside protection in volatile markets.

2. High Exposure to International Markets
Investing in global ETFs increases currency risk.

Your portfolio already has enough diversification within India.

Removing international exposure can simplify taxation.

3. Overlap in Large-Cap Allocation
Large-cap index funds and flexi-cap funds create redundancy.

A better option is an actively managed large-cap fund.

4. Conservative Hybrid Fund Allocation
Hybrid funds are good for capital preservation, but not for growth.

Your investment horizon is long enough for a pure equity approach.

Reducing this allocation can improve overall returns.

Recommended Portfolio Adjustments
1. Replace Index Funds with Actively Managed Funds
Actively managed funds have historically outperformed index funds.

A well-managed large-cap and large & mid-cap fund will be better.

2. Reduce International Exposure
Exit from the international ETF.

Keep investments in strong Indian equity funds.

3. Optimise Large-Cap and Flexi-Cap Allocation
Replace index-based large-cap funds with top-performing active funds.

Continue flexi-cap investment but monitor fund performance.

4. Increase Mid-Cap and Small-Cap Allocation
Mid-cap and small-cap funds offer higher growth potential.

Increase allocation based on risk comfort.

5. Exit Hybrid Funds for Higher Growth
Shift hybrid fund allocation to mid-cap or flexi-cap funds.

This will ensure better long-term returns.

Suggested New SIP Allocation
Large-Cap Fund: Rs 10,000 (actively managed)

Large & Mid-Cap Fund: Rs 10,000 (actively managed)

Flexi-Cap Fund: Rs 25,000

Mid-Cap Fund: Rs 20,000

Small-Cap Fund: Rs 15,000

Gold ETF: Rs 5,000 (optional for diversification)

PPF and NPS: Continue existing contributions

This new allocation ensures higher growth while managing risk.

Final Insights
Replace index funds with actively managed funds.

Reduce international exposure to avoid currency risks.

Shift hybrid allocation to growth-focused funds.

Increase mid-cap and small-cap exposure for better returns.

Continue PPF and NPS as stable long-term investments.

This approach will improve returns while keeping risk moderate.

Best Regards,

K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment