Financial Advisor: Should I Continue My Investment Strategy?

Ans: Please continue

I have only one daughter; she is 10. So apart from this I want to invest additional 5000 per month SIP for at least 10 years for her higher education. Kindly guide me for direct SIP looking at my age and purpose.

You may consider these funds:

• Axis Esg Equity Fund - Growth
• Uti Flexi Cap Fund -growth
• Samco Flexi Cap Fund - Growth
• Hdfc Index Fund - Sensex Plan - Growth

Ans: Hello Vikas. If you are investing for long run say 7-10 years. I would recommend to reconsider both mentioned schemes to better peer schemes. You may consider multicap and mid cap categories for your portfolio.

Ans: Your commitment to investing regularly is commendable. Let's review your current investment portfolio and provide guidance on whether you should continue with the same funds.

Current Portfolio Overview

You are currently investing Rs 15,000 per month in three mutual funds:

HDFC Large and Mid Cap Fund - Growth Regular: Rs 5,000
ICICI Prudential Dividend Yield Equity Fund Regular Plan: Rs 5,000
HDFC Balanced Advantage Fund Regular: Rs 5,000
Evaluating Existing Funds

HDFC Large and Mid Cap Fund:

This fund invests in both large-cap and mid-cap stocks, offering a balanced approach to growth. It provides diversification across market capitalizations.
Large and mid-cap funds can be volatile in the short term but have the potential to deliver strong returns over the long term.
Consider the fund's performance relative to its benchmark and peers to assess its suitability for your investment horizon.
ICICI Prudential Dividend Yield Equity Fund:

This fund aims to invest in dividend-paying stocks, focusing on companies with stable dividend yields.
Dividend yield funds can provide regular income, making them suitable for investors seeking income generation along with capital appreciation.
Evaluate the fund's performance and dividend payout history to ensure it aligns with your income requirements and investment goals.
HDFC Balanced Advantage Fund:

This fund follows a dynamic asset allocation strategy, adjusting equity and debt exposure based on market conditions.
Balanced advantage funds offer downside protection during market downturns while participating in equity market upside.
Review the fund's asset allocation approach and performance to determine its effectiveness in managing market volatility and delivering consistent returns.
Assessing Investment Timeframe

Given your investment timeframe of 3 years, it's crucial to consider the risk profile and potential volatility of the chosen funds. Equity-oriented funds like large and mid-cap funds and balanced advantage funds may be subject to market fluctuations, which could impact short-term returns.

Considerations for Continuing with the Same Funds

Risk Appetite:

Assess your risk tolerance and comfort level with market volatility. Equity funds, including large and mid-cap funds, carry higher risk but also offer the potential for higher returns over the long term.
Balanced advantage funds provide a more conservative approach by dynamically adjusting asset allocation, which may suit investors with a lower risk appetite.
Investment Goals:

Revisit your investment objectives and financial goals. Ensure that your chosen funds align with your goals, whether they are wealth accumulation, income generation, or capital preservation.
Performance Review:

Evaluate the historical performance of each fund, considering both short-term and long-term returns. Assess how the funds have performed during different market cycles and their ability to meet their investment objectives.
Guidance for the Future

Portfolio Review:

Regularly review your portfolio's performance and make adjustments as necessary. Consider rebalancing your asset allocation if your risk profile or investment goals change.
Diversification:

Assess the diversification of your portfolio across asset classes, sectors, and investment styles. Diversification can help manage risk and enhance overall portfolio stability.
Professional Advice:

Consider seeking guidance from a Certified Financial Planner (CFP) to ensure your investment decisions align with your financial goals and risk tolerance. A CFP can provide personalized advice tailored to your specific circumstances.
Conclusion

Your current investment strategy reflects a diversified approach across different fund categories. To determine whether to continue with the same funds, assess your risk tolerance, investment goals, and the performance of the chosen funds. Regular portfolio review and professional advice can help you make informed decisions and stay on track to achieve your financial objectives.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: It's great to see your enthusiasm for investing in mutual funds at a young age! Let's address your concerns and questions:

Market Volatility: It's natural to be concerned about market fluctuations, especially when you're new to investing. Yes, mutual fund values can indeed fluctuate with market movements. However, it's essential to remember that investing in mutual funds is a long-term endeavor. Market downturns are a normal part of the investing cycle, and they often present buying opportunities for long-term investors. Trying to time the market by waiting for a downturn to invest further can be challenging and may not always yield the desired results. Instead, focus on staying invested for the long term and maintaining a diversified portfolio that aligns with your financial goals and risk tolerance.
One-Time Investment vs. SIP: Both one-time investments and SIPs have their advantages. One-time investments offer the benefit of investing a lump sum amount upfront, which can potentially lead to higher returns over the long term, especially during bull markets. On the other hand, SIPs allow you to invest regularly over time, which can help in rupee cost averaging and reduce the impact of market volatility. Since you're just starting, you may consider continuing with your one-time investments for now and gradually explore SIPs as you gain more experience and confidence in investing.
Future Investment Strategy: Whether you choose to continue with one-time investments or switch to SIPs for your future investments depends on your preferences, financial goals, and cash flow considerations. Since you've already made one-time investments, you may continue with this approach if it aligns with your investment strategy. Alternatively, if you prefer a more systematic and disciplined approach, you can start SIPs for your future investments. Consider spreading your investments over time to take advantage of rupee cost averaging and reduce the impact of market volatility.
Remember, investing is a journey, and it's essential to stay patient, disciplined, and focused on your long-term goals. Consider seeking advice from a Certified Financial Planner (CFP) or financial advisor who can provide personalized guidance based on your individual circumstances and help you navigate the complexities of the financial markets. Keep learning and stay committed to your investment plan, and you'll be well-positioned to achieve your financial aspirations over time.

Ans: Reviewing Your Current Investment Setup
You invest a total of ?1.2?lakh per month across five equity funds.

All funds are actively managed, which helps in growth and flexibility.

The current mix leans heavily toward aggressive equity exposure.

There is limited diversification across asset types.

You’ve built good equity discipline over 3+ years.

That consistency forms a strong foundation.

Evaluating Each Fund Category
Multi-Asset & Hybrid Approach
Investing ?20k/month in a flexible hybrid fund balances stock risk.

Hybrid funds add buffer during market volatility.

Retaining this allocation makes sense for risk moderation.

Value Discovery Equity
Value-focused fund adds cycle-based opportunity.

It provides diversification via different investing themes.

Good to retain for broad equity exposure.

Thematic Fund (Recent)
Thematic funds carry sector-specific or theme-based risk.

You’ve only invested ?20k/month for 4 months.

Consider capping thematic exposure at 5–10% of equity.

Too much thematic investment can raise volatility.

Focused 30 Equity Fund
High-conviction, 30-stock fund adds focused diversity.

It’s a distinct equity style useful in long-term portfolio.

Continuing is fine if manager’s philosophy aligns with your goals.

Next-Gen / Gen-Next Fund
This fund invests in future leaders and companies.

Good for capturing innovation-driven growth.

But it’s a thematic/small-mid blend—risky when overweighted.

Keep at 5–10% equity to avoid concentration risk.

Assessing Your Portfolio Allocation
You currently have five equity-heavy funds, totalling ?1.2?lakh/month.

That’s a concentrated equity posture without debt cushioning.

You lack a systematic debt or hybrid corridor to smooth markets.

Without yearly rebalancing, this can amplify risk.

A goal-based breakdown is needed: equity (growth), debt/hybrid (balance), liquid buffer.

Considering HDFC Mid-Cap Opportunity via Weekly SIP
The fund is actively managed and mid-cap focused—fitting your growth bias.

Investing weekly (?2,000/week = ?8,000/month) reduces lump-sum risk.

Weekly SIP averages out entry price—beneficial in volatile assets.

Adds discipline for gradual entry, rather than one-shot allocation.

Mid-cap suits your age and time horizon if balanced well in portfolio.

Proposed Portfolio Rebalancing
To simplify and increase long-term resilience, consider this restructuring:

1. Continue Hybrid Fund: ?20k/month in multi-asset fund

Ensures steady performance and reduces equity-only swings

2. Equity Core Allocation: ?60k/month across:

Large/Flexi-cap equity: ?20k

Mid-cap fund (like HDFC opportunity): ?20k (via weekly SIP)

Value discovery: ?10k

Small/thematic/next-gen combined: ?10k

3. Use Weekly SIP in Mid-Cap: ?2k/week into HDFC

Stabilises entry and control volatility

4. Gold Allocation: ?5k/month into gold ETF/fund

Acts as hedge against inflation and equity dips

5. Liquid Fund: ?5k/month for buffer and redemption flexibility

Total monthly savings becomes ?1.2?lakh + an additional ?8k = ?1.28?lakh.
You can start by adjusting existing SIPs and adding small gold/liquid allocations—it’s tailored to your equity-forward style.

Why Active Funds and Regular Plans Are Beneficial
Active managers can mitigate losses during downturns.

Index funds lack discretion: they ride the entire market movement.

Your timeframe and style suit active equity and theme selection.

Regular plans via CFP-backed distributors give advice, planning, and tax discipline.

Direct plans save cost but lack structure, mental comfort, and monitoring.

Weekly vs Monthly SIP: Benefits Breakdown
Weekly SIP smoothens volatility more than monthly SIP.

Smaller periodic contributions avoid timing mistakes.

If your salary permits, start with ?2k weekly in mid-cap.

Monitor impact before ramping up weekly SIPs further.

Monitoring and Rebalancing Strategy
Review allocation every six months: equity vs hybrid/gold/liquid.

If equity grows beyond 65–70%, shift new SIPs into hybrid or liquid.

Rebalance through future contributions to reduce tax impact.

Annual pass-through checks ensure you stay on risk target.

Tax Implications and Efficiency
Equity LTCG beyond ?1.25 lakh taxed at 12.5%; STCG at 20%.

Hybrid and debt funds taxed per your income slab.

Gold ETF gains: LTCG, except if held under 3 years (STCG).

Under a regular plan, your advisor can schedule redemptions to manage tax liabilities and annual allowances.

Protecting Against Downside and Enhancing Stability
Hybrid fund ensures cushion during equity corrections.

Gold adds inflation protection and non-stock exposure.

Liquid fund avoids cash flow disruptions during emergencies.

Balanced equity structure across large, mid, small/theme segments adds stability.

Risk Management and Asset Allocation Ranges
You might aim for these approximate targets:

Equity: 60–65%

Hybrid: 20–25%

Gold: 5–7%

Liquid: 5–10%

These ranges protect from high equity swings and give growth potential for medium to long-term goals.

Protecting Your Health and Personal Safety Net
No mention of life or term-insurance—essential given dependents.

At age?40, buy term life insurance covering at least 10 times your income.

Health insurance of ?5–10 lakh protects against emergencies.

Insurance premiums are minor but crucial for a secure investment plan.

Execution Steps to Implement the Plan
Maintain existing hybrid SIP.

Retain your value discovery fund as core equity.

Shift a portion of thematic/next-gen into a monthly mid-cap SIP.

Begin ?8k weekly SIP into mid-cap fund.

Start ?5k/month gold fund.

Start ?5k liquid fund monthly.

Stop or reduce one overlapping equity SIP to fund liquid and gold.

Regularly check allocation drift and rebalance via contributions.

Review and Adjustment Timeline
Quarterly: Check NAV, returns, and emerging fund performance.

Half-yearly: Rebalance contributions among asset buckets.

Annually: Review goals, inflation, risk tolerance; adjust portfolio if necessary.

Final Insights
You have built solid equity discipline over years—already successful.

Rational portfolio trimming and reallocation adds resilience.

Weekly SIP into mid-cap aligns with your risk appetite and investment style.

Hybrid, gold, and liquid assets help smooth returns across cycles.

Active funds with CFP oversight combine growth, protection, and coaching.

This structured approach supports both capital growth and risk management over the next three years and beyond.

Feel free to connect if you’d like help choosing specific funds or setting periodic review reminders.

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