I have been investing 15k per month through 1. HDFC large and mid cap fund-Growth Regular 5k 2.Icici prudential dividend yield equity fund regular plan 5k. 3.HDFC Balanced Advantage Fund Regular 5k.Please advise if I should continue with the same. Investment time for 3 yrs

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