I have invested in below mutual funds. It's been 2 years investing in these funds and now I want to increase my investment amount more to 10000 per month in mutual fund through SIP. So kindly suggest me where to invest this 5000 more and also please advise, do I need to change my particular investment in some other funds.

Ans: Hi Saravanan. Looking with current portfolio, I would suggest you to reconsider Parag Parikh AMC. With your multiple goals to be achieved in next 15 years, you may consider the below schemes for your portfolio.

• Nippon India Large Cap Fund
• ICICI Pru Large & Mid cap Fund
• Quant Flexi cap Fund
• Mirae Asset Mid Cap Fund

Ans: Hello Bharat. I would advice few changes in your portfolio, reconsider your schemes in ABSL AMC. You can consider categories such as Multi cap and mid cap funds.

Ans: You have taken significant steps towards securing your financial future with a diversified SIP portfolio. Your commitment to regular investing is commendable.

Review of Existing SIP Investments:

Let’s analyze your current mutual fund investments to ensure they align with your financial goals and risk tolerance.

Quant MidCap Direct Growth Fund:

This fund focuses on mid-cap stocks, which offer high growth potential but come with higher volatility.

Quant Large and Midcap Direct Fund Growth:

A balanced mix of large and mid-cap stocks, providing a blend of stability and growth.

SBI Magnum Midcap Direct Plan Growth:

Another mid-cap fund adding diversity within the mid-cap segment.

Quant Active Direct Fund Growth:

A diversified equity fund that invests across various sectors and market capitalizations.

Axis Nifty Smallcap 50 Index Direct Plan Growth:

An index fund focused on small-cap stocks, offering potential high returns with higher risk.

HDFC Small Cap Direct Plan Growth:

A small-cap fund that focuses on companies with high growth potential.

ICICI Prudential BHARAT 22 FOF Direct Plan Growth:

A fund of funds investing in the Bharat 22 ETF, providing exposure to a diversified portfolio of public sector companies.

SBI Large and Midcap Direct Plan Growth:

Invests in both large and mid-cap stocks, providing a balance between growth and stability.

Nippon India Small Cap Direct Plan Growth:

A small-cap fund known for aggressive growth strategies.

Quant Small Cap Direct Plan Growth:

Another small-cap fund, adding to the exposure in the small-cap segment.

Quant Multi Asset Direct Plan Growth:

Invests across multiple asset classes, providing diversification and reducing risk.

ICICI Prudential Bluechip Direct Plan Growth:

A large-cap fund that offers stability and consistent returns.

Recommendations for Portfolio Optimization
Diversification and Overlap:

Your portfolio has a heavy allocation towards small-cap and mid-cap funds. While these can provide high returns, they also come with higher risk.

Reducing Overlap:

Consider reducing the number of small-cap funds to avoid excessive overlap and potential volatility.

Balancing with Large-Cap Funds:

Increase allocation in large-cap funds for stability and consistent returns.

Suggested Changes
Retain:

Quant MidCap Direct Growth Fund
Quant Large and Midcap Direct Fund Growth
ICICI Prudential Bluechip Direct Plan Growth
Consider Replacing or Reducing:

Nippon India Small Cap Direct Plan Growth: Consider reducing allocation due to significant overlap with other small-cap funds.
Quant Small Cap Direct Plan Growth: Similar to above, reduce or replace to minimize risk.
Balanced Funds:

Introduce balanced funds or hybrid funds to achieve a mix of equity and debt, providing growth with reduced volatility.

New Investment Recommendations
Additional Rs. 20,000 Allocation:

Here’s how you can allocate your additional Rs. 20,000 per month for optimal returns.

Diversified Equity Funds:

Invest in diversified equity funds with a proven track record for stable growth.

Large-Cap and Bluechip Funds:

Increase allocation in large-cap funds for stability.

Balanced or Hybrid Funds:

Introduce balanced funds for a mix of equity and debt, providing growth with lower risk.

Creating a Stable Portfolio
Balanced Allocation:

Ensure a balanced allocation between large-cap, mid-cap, and small-cap funds.

Regular Review and Rebalancing:

Review your portfolio regularly and rebalance annually to maintain desired asset allocation.

Risk Management:

Ensure your portfolio aligns with your risk tolerance and investment horizon.

Perils of Direct Investing
Market Volatility:

Direct investing in the stock market can expose you to significant market volatility. Prices can fluctuate widely, affecting the value of your investments.

Lack of Diversification:

Investing in individual stocks may lead to a lack of diversification. This increases risk as your investment is concentrated in fewer securities.

Research and Knowledge:

Direct investing requires extensive research and market knowledge. Without proper understanding, you may make uninformed decisions leading to losses.

Emotional Investing:

Investors often make emotional decisions based on market movements, leading to buying high and selling low, which can erode returns.

Time-Consuming:

Managing a portfolio of individual stocks is time-consuming. It requires continuous monitoring and adjustment based on market conditions.

Benefits of Investing Through MFD with CFP Credential:

Professional Management:

Certified Financial Planners (CFPs) and Mutual Fund Distributors (MFDs) provide professional management, ensuring your investments are well-researched and diversified.

Holistic Financial Planning:

CFPs offer holistic financial planning, aligning your investments with your financial goals, risk tolerance, and time horizon.

Regular Monitoring and Rebalancing:

Professionals regularly monitor and rebalance your portfolio to ensure it remains aligned with your objectives.

Reduced Emotional Bias:

Professional management helps in reducing emotional bias, making investment decisions based on logic and analysis.

Suggested Mutual Fund Allocation
Equity Funds:

Large-Cap Funds: 40%
Mid-Cap Funds: 30%
Small-Cap Funds: 20%
Balanced/Hybrid Funds:

Balanced Funds: 10%
Summary
Compliment and Encouragement:

Your commitment to regular investing and seeking advice shows your dedication to achieving financial goals. Keep up the excellent work.

Action Plan:

Review and adjust your current SIPs to reduce overlap.
Increase allocation in large-cap and balanced funds.
Allocate additional Rs. 20,000 to diversified and balanced funds for stability and growth.
Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: It's commendable that you're regularly investing through SIPs and looking to further diversify your portfolio. Here's a suggestion for investing an additional Rs 15,000 per month:

Since you're concerned about volatility in small-cap funds, consider allocating a portion of the additional Rs 15,000 to large-cap or multi-cap funds for stability and downside protection.
Look for funds with a proven track record of consistent performance and experienced fund managers. Consider factors like expense ratio, fund size, and portfolio composition when evaluating options.
Given your long-term investment horizon, you can afford to take some risk for potentially higher returns. Hence, consider allocating a portion of the additional SIP amount to mid-cap or small-cap funds for growth opportunities.
Remember to maintain a balanced portfolio across different market segments and asset classes to manage risk effectively.
Regularly review your SIP investments and make adjustments as needed based on changes in your financial situation or market conditions.
Consult with a Certified Financial Planner to receive personalized advice tailored to your specific needs and goals.
By diversifying your SIP investments across different market segments and staying disciplined with your investment strategy, you can maximize the potential for long-term wealth creation while managing risk effectively.