New investor, should I revise my SIP investments?

Ans: These are good funds in their categories, ie ELSS, focused and short duration debt fund.

If the objective is growth and corpus creation, debt fund can be substituted with equity fund -- ie DSP Quant will be suitable.

 

Ans: You may continue with 4 & 5-Star rated ones and rest can be relooked. Avoid Equity - Sectoral Funds 

Midcaps: Suitable options considering quality and value for money are:

• Motilal Oswal Midcap 30
• DSP Midcap
• Kotak Emerging Equity Fund

Ans: You've built a diversified portfolio covering different market segments, which is a good strategy for long-term growth. Here's a quick review:

Axis Small Cap & Canara Small Cap: You have exposure to small-cap funds which can offer higher growth potential but come with higher volatility. Given your 15-year horizon, these can be suitable, but be prepared for fluctuations.

Axis Bluechip & Mirae Asset Aggressive Fund: These funds provide stability with large-cap and well-diversified equity exposure. They can act as a counterbalance to the volatility of small and mid-cap funds.

Parag Parikh Flexi Cap: A flexible fund that invests across market caps and can provide consistent returns. It offers international diversification which can be beneficial.

Quant Small Cap & PGIM India Midcap: These funds further increase your exposure to mid and small-cap segments. Ensure you're comfortable with the higher risk associated with these categories.

Given your portfolio, it seems well-balanced for long-term growth. However, consider the following suggestions:

Review Fund Performance: Regularly check the performance of your funds against their benchmarks and peers.

Risk Assessment: Ensure you're comfortable with the risk levels, especially with higher allocations to small and mid-cap funds.

Asset Allocation: As you progress, you might want to rebalance your portfolio to maintain desired asset allocation.

New SIPs: Consider adding a large-cap or a diversified equity fund to further diversify your portfolio and reduce risk.

Remember, while these are general guidelines, personal financial planning should be tailored to your specific goals, risk tolerance, and financial situation. It's always advisable to consult with a financial advisor for a comprehensive review and advice tailored to your needs.

Ans: You're investing Rs 2.5k in six different SIPs. These funds cover a mix of large-cap, small-cap, focused, and flexi-cap categories. This diversified approach is a good starting point for balancing risk and returns. However, it's essential to assess each fund's role in your portfolio.

Fund Categorization and Allocation

Large-Cap Funds:

Large-cap funds offer stability. They focus on established companies with strong market presence.
Small-Cap Funds:

Small-cap funds provide growth potential but carry higher risk. These funds invest in emerging companies that may not be as stable.
Focused and Flexi-Cap Funds:

Focused funds invest in a limited number of stocks. This approach allows concentrated growth but with increased risk.
Flexi-cap funds provide flexibility by investing across market caps. This diversification can reduce risk.
Index Fund Consideration

You've included an index fund in your portfolio. While index funds have low management fees, they also lack the potential for outperforming the market. Actively managed funds, on the other hand, can provide higher returns, especially in volatile markets. A Certified Financial Planner can help identify funds that might outperform the index, offering better growth opportunities.

Benefits of Regular Funds Over Direct Funds

Regular funds come with the advantage of professional guidance. A Certified Financial Planner can help tailor your investments to your goals. Direct funds might save on commissions, but without expert advice, the risk of underperformance increases. The expertise of a CFP ensures your portfolio is aligned with your financial objectives.

Diversification and Risk Management

Your current portfolio is diversified across various fund categories, which helps spread risk. However, too much overlap in fund types, like small-cap funds, can increase risk unnecessarily. It's crucial to maintain a balanced allocation that aligns with your risk tolerance and financial goals.

Investment Horizon and Goals

Understanding your investment horizon is key. If you're investing for long-term goals like retirement, a mix of equity-oriented funds is suitable. For medium-term goals, consider reducing exposure to high-risk funds and adding more balanced or debt funds.

Final Insights

Review Overlap: Evaluate the overlap in your small-cap funds. Diversify across other categories for better balance.

Reconsider Index Fund: Actively managed funds may provide better growth potential. A CFP can guide you in selecting suitable alternatives.

Seek Professional Guidance: The benefits of regular funds, with expert advice, outweigh the savings from direct funds. A Certified Financial Planner can help maximize returns and manage risk.

Adjust for Goals: Align your portfolio with your financial goals. Adjust your fund allocation based on your investment horizon and risk tolerance.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in