Hi sir i am 34 years i was started SIP 5000 in following category 1)Uti nifty 50 index fund 1000 (2) Parag parikh flexi cap 1000 (3) motilal oswal mid cap 500 (4) HDFC mid cap 500 (5) Nippon India small cap 1000 (6) bandhan small cap 1000 plz suggest my portfolio
Ans: You are 34 years old. That gives you long investment time.
You have started your SIP journey early. That is a strong first step.
You are investing Rs. 5,000 monthly in six different funds.
Your current SIP allocation covers different categories.
This includes index, flexi-cap, mid-cap, and small-cap funds.
Let’s now analyse your SIP portfolio from every angle.
We will keep it simple, professional, and easy to follow.
Portfolio Allocation Overview
Your SIP is spread as:
Rs. 1,000 in Nifty 50 Index Fund
Rs. 1,000 in Flexi Cap Fund
Rs. 1,000 in Mid Cap Fund A
Rs. 1,000 in Mid Cap Fund B
Rs. 1,000 in Small Cap Fund A
Rs. 1,000 in Small Cap Fund B
Total SIP = Rs. 6,000 monthly.
Let’s now assess each component.
Problems with Index Fund Allocation
You have invested in an index fund.
This is a passive fund. It copies an index like Nifty 50.
Disadvantages of index funds:
No active stock selection
Poor quality stocks can stay in portfolio
Cannot exit bad sectors during crisis
Cannot avoid risky or falling companies
Gives average market return, never better
No cushion during market crash
No fund manager to guide investments
Why actively managed funds are better:
Expert fund manager selects quality stocks
Regular review and change of holdings
Avoids weak performing sectors and stocks
Aims for higher return than index
Adjusts portfolio based on market and economy
Gives better risk-adjusted return over time
Action Point:
Stop SIP in index fund
Start SIP in an actively managed large-cap or flexi-cap fund
Choose through a certified financial planner for better planning
Direct Plans – A Serious Concern
If you are using direct funds, that is a problem.
You have not mentioned this, but we must explain.
Disadvantages of direct mutual funds:
No help from any MFD or Certified Financial Planner
No one to review performance regularly
You may not rebalance when needed
You may panic in market fall and withdraw early
You may miss new opportunities
No goal tracking or future value estimation
Why regular plans through MFD with CFP are better:
You get human guidance
Helps in emotional decisions during market panic
Portfolio review done every 6–12 months
Helps plan for goals like house, retirement, or child’s future
Tax planning done smartly
Helps increase SIP over time as income grows
Action Point:
If you are using direct funds, switch to regular funds
Take support from CFP-certified MFD
You will gain much more than the lower expense ratio of direct plans
Fund Overlap – Mid Cap and Small Cap
You are investing in:
Two mid cap funds
Two small cap funds
That creates overlap in risk and sectors.
Mid and small caps are more volatile.
Problems with duplication:
Same type of stocks in two funds
More funds, but not more diversification
Managing becomes harder
May dilute performance
Action Point:
Keep only one good mid cap fund
Keep only one small cap fund
Use saved SIP for a large and mid-cap or balanced fund
You are only 34.
So you can take exposure to mid and small cap.
But it must be balanced and structured.
Flexi Cap Fund – A Good Core Holding
Flexi cap fund is useful in any portfolio.
It allows fund manager to invest in all segments.
Large, mid, and small caps are all used smartly.
Benefits of Flexi Cap:
Offers diversification in one fund
Reduces need for too many funds
Fund manager moves across sectors and caps
Suitable for both beginners and long-term investors
Action Point:
Keep SIP in flexi cap fund
If possible, increase allocation slightly
Flexi cap can be your core portfolio fund.
Asset Allocation Gaps
You are fully invested in equity funds now.
This is okay for long-term goals only.
But you must create some balance.
Later, you will need debt or hybrid funds also.
Why asset allocation matters:
Equity gives growth, but is volatile
Debt gives stability, but low return
Mix of both gives smoother journey
Important during market crash or job loss
Action Point:
Add a balanced advantage fund when SIP increases
Use it to reduce portfolio risk gradually
Plan using help of a certified financial planner
Goal-Based Planning – Missing in Portfolio
Your current SIP does not mention your financial goals.
That is risky. Money without a goal is directionless.
Each SIP must have a purpose:
Buying house
Retirement planning
Child’s education
Emergency corpus
Vacation or vehicle
Without goal tagging, you may withdraw early
or may not know how much to invest.
Action Point:
Define your goals clearly
Tag each SIP to one goal
Estimate future cost of each goal
Adjust SIP amount every year as income grows
Monthly SIP Amount – Review and Plan
Rs. 6,000 SIP is a good start.
But you must increase it regularly.
You are 34. You may work for 25 more years.
You must save more every year.
Action Plan:
Increase SIP by 10% every year
Link SIP increase with salary increase
Shift extra SIP to funds suggested above
Review portfolio every 12 months
This will help build wealth in the long term.
Taxation Awareness
When you sell mutual funds in future, tax applies.
You must plan your redemptions properly.
Latest tax rules:
Long Term Capital Gain (LTCG) on equity above Rs. 1.25 lakh taxed at 12.5%
Short Term Capital Gain (STCG) taxed at 20%
Debt mutual fund gain taxed as per income slab
Action Plan:
Track holding period of every SIP
Don’t sell early unless urgent
Redeem smartly after holding 1–3 years or more
Discuss tax impact with your CFP
Step-by-Step Suggestions
Exit index fund SIP
Stop duplicate mid cap and small cap SIPs
Retain one flexi cap fund
Increase SIP in flexi cap slowly
Add balanced fund as SIP grows
Define and tag goals clearly
Review portfolio once every year
Shift to regular plans via CFP-guided MFD
Avoid emotional withdrawals in market fall
Plan taxes before redemption
Increase SIP as income rises
Don’t add too many funds in future
Keep portfolio simple and balanced
Track and rebalance every year
Finally
You are on the right path.
You started early. That’s a huge advantage.
But your portfolio has overlapping funds.
And one passive index fund that limits growth.
Your asset allocation is tilted fully to equity.
That is fine for now. But not forever.
You also must link SIPs to your life goals.
Only then the journey becomes meaningful.
Direct plans and index funds don’t help long term.
They look cheap but lack planning support.
A certified financial planner will guide with clarity and direction.
SIPs must grow with your income and life needs.
Keep discipline. Avoid panic. Invest with purpose.
This is how you create wealth and peace.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment