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Sanjeev

Sanjeev Govila  | Answer  |Ask -

Financial Planner - Answered on Nov 27, 2023

Colonel Sanjeev Govila (retd) is the founder of Hum Fauji Initiatives, a financial planning company dedicated to the armed forces personnel and their families.
He has over 12 years of experience in financial planning and is a SEBI certified registered investment advisor; he is also accredited with AMFI and IRDA.... more
Asked by Anonymous - Nov 20, 2023Hindi
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I am investing in Axis long term equity fund, Franklin India tax shield, mirae tax saver fund and parag Parikh flexi cap fund from 6 years as SIP.I recently started HDFC large/midcap fund and Nippon small cap fund. Any suggestions on previous SIPs to change?

Ans: Every investment should be made with a well-thought-out plan and synchronised objectives.

The purpose of investing in an ELSS fund is mainly to claim the deduction under Section 80C. If you are following a new tax regime, then these investments might not be useful. Also, ELSS funds have a lock-in period of 3 years. Further, if you are investing in ELSS funds not for tax benefits, then you may consider looking for other funds.

From an overall viewpoint, the funds you have selected belong to one of the old and good AMCs. However, we suggest you to reconsider your option to continue your SIP in the Axis Long-Term Equity Fund & Franklin India Tax Shield Fund due to the recent internal restructure within the AMCs & and underperformance since last 1.5 years.

HDFC Large & Mid Cap and Nippon India Small Cap funds are good investment options. However, we would suggest you to review your risk appetite and financial goals because, a small-cap fund carries a high level of risk, and one should have a long-term horizon of more than 7 years.
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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Ramalingam

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Hi, I am 49 Yr old having below SIP's presently. These are more than 5Yr old and in continuation. Pls advise if there is any change require. 1. Quantum Equity Fund of Funds-5K 2.ICICI Pru Technology Fund-5K 3.ICICI Pru Bluechip Fund-10K 4.Quantum Long term Equity Fund-7K 5.Nippon India Mutlicap Fund -4K 6.Birlasunlife Frontline Equity Fund-5K 7. Mirae Asset Emerging Bluechip Fund- 5K 8. SBI Bluechip Fuind-2.5K 9. SBI Magnum Midcap fund-2.5K 10. ICICI Pru Value Discovery Fund-5K Thanks Mahesh
Ans: It's great that you've been consistent with your SIPs over the years. However, it's always a good idea to review your portfolio periodically to ensure it aligns with your current financial goals and market conditions. Here are some suggestions:

Diversification: Ensure your portfolio is well-diversified across different asset classes and investment styles to mitigate risk. Consider adding exposure to debt or international funds if your portfolio is predominantly equity-focused.

Performance review: Evaluate the performance of each fund relative to its benchmark and peers. If any fund consistently underperforms or doesn't meet your expectations, consider replacing it with a better-performing alternative.

Cost analysis: Assess the expense ratios of your funds and compare them with similar funds in the market. Lower expense ratios can enhance your returns over the long term.

Risk tolerance: Reassess your risk tolerance and adjust your portfolio accordingly. As you approach retirement age, you may want to gradually shift towards more conservative investments to preserve capital.

Consult a financial advisor: Consider seeking professional advice from a financial advisor who can provide personalized recommendations based on your specific financial situation and goals.

By periodically reviewing and adjusting your SIP portfolio, you can ensure that it remains optimized for your financial objectives and market conditions.

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Ramalingam

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Mutual Funds, Financial Planning Expert - Answered on May 04, 2024

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Ramalingam Kalirajan  |6995 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 19, 2024

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Hi i am 34 years old. I have started a 4 SIP each of 5000?, HDFC midcap opportunity fund direct growth, HDFC Index nifty fifty, Parag parekh flexi fund and Nippon India Small cap fund. Kindly suggest any changes or need to add more sip. I want to retire in next 12 years
Ans: Congratulations on taking proactive steps towards building your retirement corpus through SIP investments. Let's review your current portfolio and make necessary adjustments to align it with your retirement goal in the next 12 years.

Evaluating Your Current SIP Portfolio
Portfolio Composition
You've initiated SIPs in four funds, focusing on mid-cap, index, flexi-cap, and small-cap categories. This shows a well-diversified approach towards wealth creation.

Risk Profile
Your portfolio reflects a moderate to high-risk appetite, with exposure to mid-cap and small-cap funds known for their volatility.

Assessing the Need for Changes
Mid-Cap Fund
Advantage: Mid-cap funds have the potential for high growth, suitable for long-term wealth creation.
Consideration: Ensure you're comfortable with the higher risk associated with mid-cap stocks.
Index Fund
Advantage: Index funds offer broad market exposure at low costs, ideal for passive investors.
Consideration: While index funds offer stability, they may not outperform actively managed funds in bull markets.
Flexi-Cap Fund
Advantage: Flexi-cap funds provide flexibility to invest across market caps based on prevailing market conditions.
Consideration: Ensure the fund manager's strategy aligns with your investment goals and risk tolerance.
Small-Cap Fund
Advantage: Small-cap funds have the potential for high growth, but they come with higher volatility.
Consideration: Be prepared for fluctuations in returns and market risks associated with small-cap stocks.
Recommendations for Portfolio Optimization
Rebalancing the Portfolio
Consider rebalancing your portfolio to maintain an optimal asset allocation based on your risk tolerance and investment horizon.
Assess the current market conditions and performance of individual funds to make informed decisions.
Reviewing Fund Performance
Regularly monitor the performance of your SIP funds and assess their consistency in delivering returns.
Evaluate fund managers' track records, investment strategies, and portfolio compositions to ensure alignment with your goals.
Potential Addition of Debt or Hybrid Funds
Given the aggressive nature of your current portfolio, consider adding debt or hybrid funds to balance risk and provide stability.
Debt funds can provide steady returns with lower volatility, suitable for risk-averse investors approaching retirement.
Benefits of Regular Funds Investing through MFD with CFP Credential
Investing through a Certified Financial Planner (CFP) who is also a Mutual Fund Distributor (MFD) offers several advantages:

Personalized Advice: A CFP can provide tailored investment advice based on your financial goals, risk appetite, and investment horizon.

Portfolio Diversification: A CFP can help you build a diversified investment portfolio aligned with your objectives, spreading risk across various asset classes.

Ongoing Monitoring: With regular reviews and updates, a CFP ensures your investments stay on track to meet your goals.

Conclusion
Your current SIP portfolio demonstrates a proactive approach towards wealth creation for retirement. By reviewing and optimizing your portfolio periodically, you can ensure it remains aligned with your long-term financial goals. Consider consulting with a Certified Financial Planner (CFP) to receive personalized guidance and maximize your investment potential.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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