Should I Review My Portfolio With Government Job?

Ans: Your portfolio is well-structured, but it needs some improvements for better diversification and risk management. Let us evaluate your investment choices and suggest necessary changes.

Asset Allocation and Risk Analysis
? Your portfolio is heavily tilted towards small-cap and mid-cap funds.

? Small-cap and mid-cap funds can offer high returns but come with high volatility.

? You need some large-cap exposure for stability.

? A balanced portfolio should have a mix of large-cap, mid-cap, small-cap, and flexi-cap funds.

? Adding more flexi-cap or large-cap funds will reduce downside risks.

? Since you are a government employee, a moderate risk approach is better.

? Continue investing with a long-term view, but rebalance yearly.

Diversification Assessment
? Too many funds in the same category – Your portfolio has multiple small-cap and mid-cap funds.

? This leads to overlap in holdings and does not add extra benefit.

? A well-diversified portfolio should have different fund categories for better risk-adjusted returns.

? Consider reducing exposure to similar funds and adding more large-cap or balanced funds.

? Having a mix of growth and value-oriented funds will help in different market conditions.

Step-Up SIP Strategy Evaluation
? A 10% yearly step-up is a great strategy to increase investments.

? This helps in compounding wealth faster and maintaining purchasing power.

? Ensure your future income growth supports this step-up.

? If required, you can reduce the step-up percentage based on your financial commitments.

Portfolio Rebalancing Recommendations
? Reduce overlapping funds – Having multiple funds in the same category does not provide extra benefits.

? Increase large-cap allocation – This will reduce portfolio volatility and provide steady growth.

? Retain some flexi-cap exposure – This allows fund managers to shift across market caps.

? Consider a balanced approach – A mix of large-cap, mid-cap, small-cap, and flexi-cap will be better.

? Review performance every year – Ensure that all funds are meeting your expectations.

Final Insights
? Your investment approach is disciplined, but some adjustments are needed.

? Reduce the number of overlapping small-cap and mid-cap funds.

? Add large-cap funds for stability and risk management.

? Continue with step-up SIPs, but adjust based on financial conditions.

? Review your portfolio once a year to ensure proper asset allocation.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment