Good Evening Sir. I am 37 years old Government Salaried. Request to please review my MF portfolio and kindly suggest which funds should I remove as I feel I have too many funds. Parag Parikh Flexi Cap fund 10000, Nifty index fund10000, Kotak Multi cap 10000, Motilal Midcap 10000, Nippon Small Cap 10000, Quant Small Cap 5000, Edelweiss Aggressive Hybrid Fund 5000, SBi Contra 5000.Thank you
Ans: At 37, you are at a strong wealth-building phase of life. Being a government employee adds to the financial stability needed for long-term investing. It is good to see your interest in aligning and optimising your mutual fund portfolio.
From a Certified Financial Planner’s point of view, your portfolio is diversified but over-crowded. It has overlapping categories. This can dilute overall performance. Too many funds can also make it difficult to track and manage.
Let’s evaluate your portfolio from all key angles — category overlap, suitability, tax-efficiency, consistency, and how it aligns with your financial future.
Portfolio Summary – What You Hold Now
Here’s a breakdown of your monthly SIP investments:
Parag Parikh Flexi Cap Fund – Rs. 10,000
Nifty Index Fund – Rs. 10,000
Kotak Multi Cap Fund – Rs. 10,000
Motilal Oswal Midcap Fund – Rs. 10,000
Nippon Small Cap Fund – Rs. 10,000
Quant Small Cap Fund – Rs. 5,000
Edelweiss Aggressive Hybrid Fund – Rs. 5,000
SBI Contra Fund – Rs. 5,000
Total SIP: Rs. 65,000 per month
What’s Good About Your Portfolio
Disciplined SIP investment
You are investing regularly and consistently. This builds long-term wealth.
Allocation across equity categories
You have exposure to large cap, mid cap, small cap, multi-cap, flexi-cap and hybrid. This adds diversification.
No exposure to insurance or ULIPs
This shows maturity. You are using mutual funds for investment.
What Needs Improvement
Your portfolio has too many funds. Some of them overlap in purpose and holdings.
Too many small cap and thematic-type funds increase volatility.
You also hold index fund, which brings in some hidden limitations. Let’s address that separately.
Why Too Many Funds Are a Problem
More funds don’t mean better returns
Returns don’t improve by adding more schemes. Quality matters more than quantity.
Overlap in stock holdings
Flexi cap, multi cap and index funds often invest in the same large-cap stocks.
Difficult to review and monitor
Managing 8 funds is time-consuming. Harder to know which fund is actually performing.
Over-diversification leads to average returns
Instead of strong performance, your portfolio behaves like a blended index.
Tax planning gets complicated
Selling multiple funds in future may trigger tax without any planning.
Scheme-Specific Assessment
Let us assess each scheme from a suitability and performance perspective.
1. Parag Parikh Flexi Cap Fund – Rs. 10,000
Well-managed flexi-cap fund.
Invests in Indian and global stocks.
Suitable for long-term wealth building.
You can continue this fund.
2. Nifty Index Fund – Rs. 10,000
Passive fund mimicking the Nifty 50.
Not suitable if you want alpha or outperformance.
Most index funds lack flexibility.
Doesn’t adapt to market changes.
Avoids active stock selection and risk management.
Better to exit this and shift to actively managed fund.
3. Kotak Multi Cap Fund – Rs. 10,000
Invests in large, mid, and small cap.
Provides a well-balanced allocation.
Suitable to continue.
Keep this for diversified exposure.
4. Motilal Oswal Midcap Fund – Rs. 10,000
Midcap funds carry moderate risk.
Volatility is higher than large caps.
Long-term performance needed to justify holding.
Keep only one dedicated mid cap fund.
Retain this only if 5-year returns are consistent.
5. Nippon Small Cap Fund – Rs. 10,000
6. Quant Small Cap Fund – Rs. 5,000
Both are aggressive small cap funds.
Small caps are high risk and volatile.
Not suitable to hold two small cap funds.
Exit Quant Small Cap, which is more tactical and aggressive.
Retain Nippon Small Cap only if your risk appetite is high.
7. Edelweiss Aggressive Hybrid Fund – Rs. 5,000
Conservative allocation (65% equity, 35% debt).
Suitable for cushioning market volatility.
Good for asset balancing.
Can continue this with current allocation.
8. SBI Contra Fund – Rs. 5,000
Follows contrarian approach.
Strategy may underperform in regular cycles.
Not ideal for every investor.
Consider exiting this to simplify portfolio.
Suggested Revised Portfolio
Based on performance, risk level and duplication:
Recommended to Keep:
Parag Parikh Flexi Cap – Rs. 10,000
Kotak Multi Cap – Rs. 10,000
Motilal Midcap – Rs. 10,000 (only if long-term returns are consistent)
Nippon Small Cap – Rs. 10,000
Edelweiss Aggressive Hybrid – Rs. 5,000
Suggested to Exit:
Nifty Index Fund – Rs. 10,000 (switch to active fund)
Quant Small Cap – Rs. 5,000 (overlap with Nippon Small Cap)
SBI Contra – Rs. 5,000 (complex strategy, avoid if not tracking closely)
You can consolidate and redirect the released Rs. 20,000 into:
One large cap fund – for consistent and less volatile growth
One focused fund – for concentrated, high-conviction investments
Or increase allocation in existing strong performers
Additional Suggestions
Direct Plans vs. Regular Plans
If you are investing in direct plans, consider switching to regular plans through a trusted MFD.
Direct plans offer low expense ratio, but no personalised advice.
Regular plans via a CFP-guided MFD help in better monitoring and periodic reviews.
It helps in rebalancing, taxation, retirement alignment, and behavioural coaching.
Avoid DIY if you’re unable to review quarterly. Guided investing helps avoid mistakes.
Your Risk Profile and Age
At 37, you can take calculated equity exposure.
But aggressive funds should not dominate.
Hybrid and multi-cap add some stability.
Avoid chasing past performance or market trends.
Your portfolio must support retirement and life goals.
Taxation Angle to Keep in Mind
Long-term capital gains above Rs. 1.25 lakh in equity mutual funds taxed at 12.5%.
Short-term capital gains taxed at 20%.
Any switches, redemptions should be tax-optimised.
Do not redeem in panic. Take help to calculate capital gain tax impact.
Asset Allocation View
Let’s also consider these important portfolio perspectives:
You can keep 80% in equity.
Remaining 20% in hybrid or low-risk funds.
Rebalance once a year to protect gains.
You can gradually increase hybrid allocation as you reach 45+.
Action Plan
Exit 3 funds.
Consolidate and reduce overlap.
Do not exceed 5 to 6 funds.
Ensure each fund has a clear purpose.
Focus on quality over quantity.
Keep SIPs long-term without interruption.
Review performance every year, not every month.
Final Insights
You are on the right track. Keep it simple now.
Too many funds reduce focus and increase confusion.
Keep 1 flexi cap, 1 multicap, 1 midcap, 1 small cap and 1 hybrid.
Avoid index funds for active wealth building.
Invest through a certified MFD for regular reviews and timely action.
Use direct plans only if you track markets deeply and review quarterly.
Mutual fund investing is not just about selecting funds. It's also about long-term discipline, asset allocation, proper rebalancing, and emotional control. A simplified and guided approach always leads to better results.
Less funds. More focus. More clarity. Better results.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
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