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Ramalingam

Ramalingam Kalirajan  |9412 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 20, 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
Dr Question by Dr on Jun 16, 2025Hindi
Money

Dear sir iam 34 years old i started in SIP this month large cap 1000,flexy cap 1000,mid cap 1000,small cap 2000 can you advice for my portfolio

Ans: You are 34 and have just started your SIPs. That is a very good decision. You have taken the right step at the right time. Starting early is always better.

Let’s now understand your investment choices from a 360-degree angle. I will assess your portfolio’s strengths and offer suggestions for better outcomes. This will be done using simple terms and short sentences.

Your Current SIP Portfolio – Quick Summary
You have invested:

Rs. 1000 in Large Cap

Rs. 1000 in Flexi Cap

Rs. 1000 in Mid Cap

Rs. 2000 in Small Cap

Total monthly SIP: Rs. 5000

Your plan is clear. But, there is a better way to balance the risk and returns.

Strengths in Your Portfolio
You are investing in equity funds. That is good.

SIP method reduces timing risk. So, smart approach.

You are including all four equity categories. Very good diversification attempt.

Rs. 5000 SIP is a good start. You can always increase gradually.

Starting at 34 gives you enough time to create long-term wealth.

You must appreciate yourself for taking action. Many wait too long.

Need for Portfolio Rebalancing
There are some imbalances in your current SIP mix. Let us analyse carefully.

Over-Allocation to Small Cap
Rs. 2000 out of Rs. 5000 is in small cap.

That is 40% of your total SIP.

Small caps are high risk. They also have sharp volatility.

Over time they may give better return, but short-term falls are steep.

At 34, you still have time. But portfolio must be protected from deep falls.

Underweight in Large and Flexi Cap
Large cap and flexi cap SIPs are only Rs. 1000 each.

These are safer and more stable funds.

Flexi cap can shift allocation between segments. That is a big advantage.

You must give more weight to these funds for better balance.

Mid Cap is Acceptable
Rs. 1000 in mid cap is fair.

Mid caps can offer good return with moderate risk.

But you must monitor regularly.

Suggested SIP Allocation Pattern
Let us consider a better proportion. You can keep the same Rs. 5000 total.

Try this split instead:

Rs. 1500 in Large Cap

Rs. 1500 in Flexi Cap

Rs. 1000 in Mid Cap

Rs. 1000 in Small Cap

This gives better balance. Less risk. Steady growth.

You can shift your funds slowly. No need to stop current SIPs suddenly. Just adjust monthly.

Reasons Why This Allocation is Better
Large Cap offers steady growth with lower volatility.

Flexi Cap brings flexibility across market caps.

Mid Cap brings growth with moderate risk.

Small Cap offers higher growth but very high risk. So lesser allocation is safer.

Such balance will help you during market ups and downs. You stay in control.

Importance of Goal Planning
Ask yourself this: Why am I investing?

You must link SIPs to goals. For example:

Child’s education after 10 years

Retirement corpus after 25 years

House down payment in 8 years

When you have goal clarity, fund selection becomes more focused.

Also, duration of goal decides which fund to choose:

Long-term goal: More equity

Short-term goal: Less equity

So, match goals and duration properly.

Invest through Certified Mutual Fund Distributor + CFP
If you are investing through direct funds, please pause and reflect.

Disadvantages of direct funds:

No expert review or handholding

No rebalancing support

No emotional control during market fall

No goal linking and no 360-degree tracking

Regular plans via Certified Mutual Fund Distributor (MFD) + Certified Financial Planner (CFP) gives:

Portfolio tracking help

Tax-efficient withdrawal planning

Rebalancing support

Goal planning assistance

Fees in regular plans are justified for the service quality and discipline they bring. It is always better to grow with expert guidance.

Role of Emergency Fund and Insurance
Before investing, first ensure protection.

Emergency fund should cover 6 months’ expenses.

Keep it in liquid funds or bank.

Also check:

Life insurance (term plan only, not ULIP or endowment)

Health insurance (family floater and personal cover)

If you have any insurance-cum-investment policies like ULIP or LIC endowment:

Please review them.

Most of these give poor returns.

If no major lock-in, better to surrender.

Reinvest that money in mutual funds.

Pure investment must stay separate from insurance.

Increase SIP Every Year
Rs. 5000 is a good start. But increase your SIP yearly.

Try to raise SIP amount by 10% to 15% every year.

For example:

Rs. 5000 in year 1

Rs. 5500 to Rs. 5750 in year 2

Rs. 6000+ in year 3

This builds wealth faster. It is called Step-Up SIP.

This small habit has very big impact in long term.

Stay Away from Index Funds
Many people talk about index funds. But they are not always better.

Index funds have these issues:

No flexibility to exit bad stocks

Poor returns during market crash

Not actively managed

In contrast, actively managed funds give:

Better downside protection

Scope to beat market through expert stock picking

Regular rebalancing and review

So, for better wealth building, always prefer actively managed funds.

Taxation Rules You Must Know
Equity mutual funds are taxed as below:

If held over 1 year: LTCG above Rs. 1.25 lakh taxed at 12.5%

If sold within 1 year: STCG taxed at 20%

So, invest for long term. That reduces tax and gives better compounding.

Debt funds are taxed as per your income tax slab. So not as attractive.

Tracking and Review
Don’t invest and forget.

Review your mutual fund SIP portfolio every 6 months.

Check for:

Consistency in fund performance

Change in fund manager or strategy

Goal tracking – are you on track?

Do this with help of your Certified Financial Planner.

This ensures course correction happens at the right time.

Avoid Common Mistakes
Here are some mistakes to avoid:

Don’t stop SIP during market fall

Don’t check NAV every day

Don’t follow tips blindly

Don’t change funds too often

Don’t mix insurance and investment

Just stay consistent and patient. Wealth will grow.

Finally
You are 34. You have started investing. That’s a big win.

Your current SIPs are good but need better balancing.

Reduce small cap exposure. Add more to large and flexi caps.

Link SIPs to your goals. Review and increase SIP yearly.

Avoid direct funds. Stay with regular funds through Certified MFD + CFP.

Protect yourself with term insurance and emergency funds.

Avoid ULIPs and low-return LIC policies.

Track your portfolio. But stay patient. Let compounding do the work.

With disciplined investing, you will reach all your goals in time.

Wishing you a successful and peaceful financial journey.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
Asked on - Jun 20, 2025 | Answered on Jun 20, 2025
Thank you very much sir given better suggestion to me
Ans: You're welcome! If you have any more questions or need further assistance, feel free to ask. Best wishes on your financial journey!

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 Kalirajan  |9412 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 05, 2024

Asked by Anonymous - Sep 08, 2023Hindi
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Dear Sir, I am 51 years old. I have been investing in SIP for 3 years and planning to invest for coming 7 years. My Present SIPs are Axis Blue Chip Fund Regular Growth @2000/- Axis Mid Cap Regular Growth @2000/- Mirae Asset Emerging Fund Regular @2000/- UTI Flexicap Fund Regular Growth @2000/-, HDFC TOP 100 Regular Growth @2000/-. Any advise for the portfolio.
Ans: Your current SIP portfolio appears well-diversified across different categories like large-cap, mid-cap, and flexi-cap funds, which is good for long-term wealth creation. Since you have a 7-year investment horizon, you may consider the following suggestions:

Review Asset Allocation: Ensure your asset allocation aligns with your risk tolerance and financial goals. Since you're in your early 50s, you may want to tilt slightly towards more conservative options while still maintaining exposure to equities for growth potential.

Consider Adding Debt Funds: Given your age and investment horizon, consider adding debt funds to your portfolio to reduce overall risk. Debt funds can provide stability and income generation while complementing the growth potential of equity funds.

Regularly Monitor and Rebalance: Keep track of your portfolio's performance and periodically rebalance if needed to maintain your desired asset allocation. As you approach your investment goal, consider gradually shifting towards more conservative investments to protect your capital.

Seek Professional Advice: Consider consulting with a financial advisor who can provide personalized recommendations based on your specific financial situation, goals, and risk tolerance. They can help optimize your portfolio for better returns while managing risk effectively.

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Ramalingam Kalirajan  |9412 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 07, 2024

Asked by Anonymous - Apr 24, 2024Hindi
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I am 20 years old and I have started my sip in parag parikh flexi cap ( 1k), Axis small cap (1k) & UTI Nifty 50 index fund (1k) can you review my portfolio and give me any important financial advice?
Ans: Your investment journey at such a young age reflects commendable financial foresight. Let's review your portfolio and offer some guidance:
1. Parag Parikh Flexi Cap:
• Parag Parikh Flexi Cap Fund is known for its diversified portfolio and investment across market capitalizations.
• This fund follows a flexible investment approach, allowing exposure to both domestic and international equities.
• With a seasoned fund management team, Parag Parikh Flexi Cap Fund aims to deliver consistent returns over the long term.
2. Axis Small Cap:
• Axis Small Cap Fund focuses on investing in small-sized companies with high growth potential.
• Small-cap funds like Axis Small Cap can be volatile but offer the potential for significant capital appreciation over the long term.
• As a young investor with a long investment horizon, allocating a portion of your portfolio to small-cap funds can be beneficial, provided you have a high risk tolerance.
3. UTI Nifty 50 Index Fund:
• UTI Nifty 50 Index Fund aims to replicate the performance of the Nifty 50 index, comprising India's top 50 large-cap companies.
• Index funds like UTI Nifty 50 provide diversified exposure to blue-chip stocks and offer stability and consistency in returns over the long term.
• Investing in an index fund like UTI Nifty 50 is a prudent choice for passive investors seeking broad market exposure with low expense ratios.
Financial Advice:
• Stay Invested for the Long Term: Given your young age, continue investing regularly and stay invested for the long term to benefit from the power of compounding.
• Diversify Your Portfolio: Consider diversifying your portfolio further by exploring other asset classes such as debt, gold, or international equities to reduce risk and enhance returns.
• Regularly Review and Rebalance: Periodically review your portfolio's performance and rebalance it if necessary to ensure it remains aligned with your financial goals and risk tolerance.
• Focus on Financial Education: Invest time in educating yourself about various investment options, personal finance concepts, and market trends to make informed investment decisions.
• Emergency Fund and Insurance: Build an emergency fund equivalent to 3-6 months of living expenses and consider purchasing health insurance and term insurance coverage to protect yourself and your loved ones from unforeseen events.
Overall, continue with your disciplined approach to investing, and consider seeking advice from a Certified Financial Planner to create a comprehensive financial plan tailored to your goals and aspirations. Your proactive approach towards financial planning at a young age bodes well for your future financial success. Keep up the good work

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Ramalingam

Ramalingam Kalirajan  |9412 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 24, 2025

Money
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

..Read more

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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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