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Omkeshwar

Omkeshwar Singh  | Answer  |Ask -

Head, Rank MF - Answered on Jan 07, 2022

Mutual Fund Expert... more
Parag Question by Parag on Jan 07, 2022Hindi
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I have been investing in MFs since a few years and my current MF portfolio is about Rs 9 lakhs with 26.5 per cent XIRR (individual rate of return).

I am 48 years old and want to set up Rs 2 crores for my retirement after 12 years.

Currently, I have these monthly SIPs for about Rs 39,000.

Please suggest if they need some changes and suggest better options, if any.

Mutual Funds Plan type Amount
1. Axis Bluechip Growth Direct Plan Rs 2,000
2. Axis Long Term Equity Growth Direct Plan Rs 3,000
3. HDFC Small Cap Growth Direct Plan Rs 3,000
4. ICICI Prudential US Bluechip Equity Growth Direct Plan Rs 5,000
5. IDFC Government Securities Investment Growth Direct Plan Rs 3,000
6. PGIM India Global Equity Opportunities Growth Direct Plan Rs 6,000
7. Parag Parikh Flexi Cap Growth Direct Plan Rs 2,000
8. SBI Banking & Financial Services Growth Direct Plan Rs 4,000
9. Tata Digital India Growth Direct Plan Rs 4,000
10. Tata India Pharma & Healthcare Growth Direct Plan Rs 3,000
11. Gold SIP   Rs 3,000

Ans: Schemes are decent but there are too many.

XIRR of 26.5 per cent is very good. However, it is not sustainable in the long run.

Risk-free rate (10 year G-sec) + inflation and some alpha should be a reasonable expectation.

In 12 years, a monthly SIP of Rs 39,000 may create a corpus of Rs 1.5 crores @ 13 per cent interest rate.

 

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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Omkeshwar

Omkeshwar Singh  | Answer  |Ask -

Head, Rank MF - Answered on May 26, 2021

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I have below investment in MFs and I want to accumulate 3 crore by 2030, I want to invest 50K monthly (currently 27500 SIP and rest lump sum invest in other funds based on condition). Please suggest if to continue or shift to other options. Also any new funds to add to have aggressively diversified portfolio. MF Name Avg. NAV Amount Invested No. of Units Current Value Invest mode Nippon India Gilt Securities Fund (Growth) 29,81 25000,00 838,711 25018,08 Lump sum Nippon India Income Fund (Growth) 67,54 95000,00 1406,554 98488,46 5000 SIP (monthly) Axis Bluechip Fund - Growth 31,18 160000,00 5130,554 198603,74 10000 SIP (monthly) Axis Multicap Fund - GROWTH 12,44 95000,00 7633,650 118550,58 Lump Sum Kotak Gold fund growth 20,58 17500,00 850,325 15735,18 Lump sum Kotak NASDAQ 100 Fund of Fund- Growth 9,88 25000,00 2529,782 23889,74 Lump sum Mirae Asset Emerging Bluechip Fund - Growth Plan 56,91 107500,00 1888,862 147234,90 2500 SIP (monthly) it was 10K SIP, but reduced later by MF house Mirae Asset Large Cap Fund- Growth Plan 52,24 75000,00 1435,544 93987,94 5000 SIP (monthly) NIPPON INDIA MULTI ASSET FUND-GROWTH PLAN 10,51 50000,00 4758,436 53394,41 Lump Sum     650000,00   774903,03  
Ans: Rs 1,20,000 investment in equity oriented funds per month is required to create a corpus of Rs 3 cr in 10 years.

Both schemes of Axis and Mirae along with Kotak Nasdaq are good schemes to be continued

Debt funds will not be able to generate the kind of returns required to achieve the corpus

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Ramalingam

Ramalingam Kalirajan  |6986 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 29, 2024

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I do have SIP going on below MFs from 2000 rs to 10000 rs in each MF. My monthly investment is 1 lakh. Most of them are from 2015 and a few of them were added in 2022. My age is 40 and my goal is to create wealth of 10cr in the next 10 years. I believe in aggressive growth. Should I continue investing in below MFs or need to replace them with different MFs? Aditya Birla Sun Life Frontline Equity Fund - Growth Aditya Birla Sun Life MNC Fund - Regular Plan - Growth Aditya Birla Sun Life Multi-Cap Fund - Regular Plan - Growth Axis Flexi Cap Fund - Regular Plan - Growth Axis Focused 25 Fund - Regular Plan - Growth DSP Small Cap Fund - Regular Plan - Growth Franklin India Smaller Companies Fund - Growth HDFC Mid-Cap Opportunities Fund - Growth ICICI Prudential Equity & Debt Fund - Growth L&T India Value Fund - Regular Plan - Growth Mirae Asset Large Cap Fund - Regular Plan - Growth Samco Flexi Cap Fund - Regular Plan - Growth ICICI Prudential Value Discovery Fund - Growth ICICI Prudential NASDAQ 100 Index Fund Direct Growth Edelweiss Balanced Advantage Fund - Growth Kotak Small Cap Fund - Growth DSP Quant Fund - Direct - Growth
Ans: Creating Wealth with Aggressive Mutual Fund Investments
your commitment to building a substantial corpus for the future is commendable. Let’s assess your current mutual fund portfolio and explore ways to achieve your goal of Rs. 10 crore in the next 10 years.

Evaluating Your Current Portfolio
Current Mutual Fund Investments
Aditya Birla Sun Life Frontline Equity Fund - Growth
Aditya Birla Sun Life MNC Fund - Regular Plan - Growth
Aditya Birla Sun Life Multi-Cap Fund - Regular Plan - Growth
Axis Flexi Cap Fund - Regular Plan - Growth
Axis Focused 25 Fund - Regular Plan - Growth
DSP Small Cap Fund - Regular Plan - Growth
Franklin India Smaller Companies Fund - Growth
HDFC Mid-Cap Opportunities Fund - Growth
ICICI Prudential Equity & Debt Fund - Growth
L&T India Value Fund - Regular Plan - Growth
Mirae Asset Large Cap Fund - Regular Plan - Growth
Samco Flexi Cap Fund - Regular Plan - Growth
ICICI Prudential Value Discovery Fund - Growth
ICICI Prudential NASDAQ 100 Index Fund Direct Growth
Edelweiss Balanced Advantage Fund - Growth
Kotak Small Cap Fund - Growth
DSP Quant Fund - Direct - Growth
Portfolio Analysis
Diversity and Overlap
Your portfolio consists of a mix of large-cap, mid-cap, small-cap, multi-cap, and value funds. While this diversity can reduce risk, there may be significant overlap in holdings, especially in large-cap funds.

Performance Evaluation
Evaluate the performance of each fund over different time periods. Check if they consistently outperform their benchmarks and peers. This analysis helps identify underperforming funds.

Risk Assessment
Given your aggressive growth strategy, higher allocation to mid-cap and small-cap funds is suitable. However, it's crucial to balance this with some large-cap and multi-cap funds for stability.

Recommended Changes
Reducing Overlap
To reduce overlap, consider consolidating similar fund types. For example, choose one or two large-cap funds instead of multiple. This approach streamlines your portfolio.

Focus on Consistent Performers
Retain funds with a strong track record of consistent performance. Replace underperforming funds with those having better potential. This strategy enhances overall portfolio performance.

Suggested Mutual Funds
Large Cap Funds
Large-cap funds invest in well-established companies. They offer stability and moderate growth.

Mid Cap Funds
Mid-cap funds target companies with high growth potential. They balance risk and reward effectively.

Small Cap Funds
Small-cap funds invest in emerging companies. They offer high growth potential but come with higher risk.

Multi Cap Funds
Multi-cap funds diversify across market capitalizations. They offer balanced risk and reward.

Value Funds
Value funds invest in undervalued companies. They provide growth potential through capital appreciation.

Investment Strategy
Monthly Investment Plan
With a monthly investment of Rs. 1 lakh, allocate funds as follows:

Large Cap Funds: Rs. 30,000
Mid Cap Funds: Rs. 30,000
Small Cap Funds: Rs. 20,000
Multi Cap Funds: Rs. 10,000
Value Funds: Rs. 10,000
Annual Review and Rebalancing
Review your portfolio annually. Rebalance to maintain the desired allocation. This approach ensures alignment with your goals and market conditions.

Risks and Benefits of Direct Investing
Disadvantages of Direct Funds
Direct funds may have lower expense ratios. However, they require active management. Without expert guidance, you may miss market opportunities or take on unnecessary risks.

Benefits of Regular Funds
Investing through a Certified Financial Planner offers several benefits. They provide professional management, regular monitoring, and timely adjustments to your portfolio. This approach can lead to better long-term performance.

Conclusion
your dedication to achieving your financial goals is impressive. By optimizing your mutual fund portfolio and investing consistently, you can build significant wealth. Ensure you review and rebalance your investments regularly to stay on track.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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Ramalingam

Ramalingam Kalirajan  |6986 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 12, 2024

Asked by Anonymous - Apr 03, 2024Hindi
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Money
I am 50 working professional. Below is my MF portfolio . 1. Parag Parikh Flexi Cap Fund 2.6 lakhs + 10K SIP 2. PGIM India Midcap Opportunities Fund 1.85 L Value + 5K SIP 3. Quant ELSS Tax Saver Fund 80K 4. Axis Small Cap Fund 1.85 Lakhs Value + 5K SIP 5. Axis Gold Fund 75K Value + 5K SIP 6. Canara Robeco Bluechip Equity Fund 70K 7. Quant Multi Asset Fund 50K 8. SBI Magnum Income Fund 50K 9. ICICI Prudential Equity & Debt Fund 50K 10. Quant Active Fund 50K 11. ICICI Prudential Bluechip Fund 25K I want to build a retirement corpus of 2 crore in 10 years. I am planning to invest around 50K every month. Plus i have. surplus of 4Lakks which i want to invest in few of the MFs above. Planning to exit Canara Robeco bluechip and Axis Small cap soon. Please suggest if any changes you want me to do.
Ans: Given your goal of building a retirement corpus of 2 crores in 10 years and your current portfolio, here are some suggestions:

Increase SIP Contributions: Consider increasing your SIP amounts in high-performing funds like Parag Parikh Flexi Cap and PGIM India Midcap Opportunities Fund, which have shown good potential for long-term growth.

Review and Consolidate: Evaluate the performance of all your funds and consider consolidating your portfolio to fewer, well-performing funds to simplify management and potentially enhance returns.

Focus on Quality: Prioritize funds with strong track records, consistent performance, and experienced fund management teams. Consider adding large-cap and diversified equity funds for stability and balanced growth.

Asset Allocation: Ensure a balanced asset allocation across equity, debt, and gold funds based on your risk tolerance and investment horizon. Reallocate surplus funds strategically to maintain a diversified portfolio.

Regular Review: Monitor your portfolio regularly and make adjustments as needed based on changes in market conditions, fund performance, and your financial goals.

Consider consulting with a financial advisor for personalized advice tailored to your specific circumstances and goals.

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Ramalingam

Ramalingam Kalirajan  |6986 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Aug 20, 2024

Asked by Anonymous - Aug 16, 2024Hindi
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Hello Sir, I am 48 years old and I am investing in mutual fund from 2017 and market value of mutual fund portfolio is 37 Lac and I am investing in following MF in through SIP Parag Parikh flexi cap fund 12 K Mirae asset Large and mid cap fund 5K Kotak emerging equity fund 5K Quant Active fund 5K Nippon India small cap fund 5K And following is lumpsum investment Quant large cap fund 250000 DSP Nifty 50 index fund 200000 ICICI pru short term fund 200000 JM flexi cap fund. 100000 Quant mid cap fund. 70000 I am planning to increase SIP by 10000 This I am planning for 10 years plan for retirement Kindly please suggest MF or guide me for any changes if any needed Thank you ???? Raj
Ans: Your current portfolio shows a solid mix of funds across various categories. You have SIPs in Flexi Cap, Large & Mid Cap, Emerging Equity, Small Cap, and Active funds. Additionally, you have lump sum investments in Large Cap, Index, Short Term, and Mid Cap funds. This diversification strategy is commendable as it balances risk across different market segments.

However, there are a few areas that could be optimized for better returns and lower risk, especially considering your 10-year retirement goal.

Disadvantages of Index Funds
You've invested a lump sum in an Index Fund. Index Funds track a specific benchmark, usually the Nifty 50 or Sensex. While they have lower expense ratios, they also lack the flexibility to adapt to market changes.

Active funds, on the other hand, allow fund managers to pick stocks that can outperform the market. In the long term, this can result in higher returns. Therefore, considering your retirement goal, shifting from the Index Fund to an actively managed fund might be more beneficial.

Regular Funds vs. Direct Funds
You haven’t specified whether your investments are in regular or direct funds. If you are considering direct funds, it’s important to know their limitations. Direct funds have lower expense ratios, but they don’t come with professional advice.

Certified Financial Planners (CFP) provide guidance, periodic reviews, and help in rebalancing your portfolio based on market conditions and your financial goals. Investing through a CFP ensures your portfolio is always aligned with your objectives.

Evaluation of Your SIPs
Flexi Cap Fund: This is a good choice, providing flexibility to invest across market caps. However, it might be wise to ensure your exposure isn't overly concentrated in any single market cap.

Large & Mid Cap Fund: This fund offers a balance between stability (large caps) and growth potential (mid caps). Continue this SIP as it aligns with your retirement goals.

Emerging Equity Fund: Mid and small caps tend to be more volatile. Consider reviewing this SIP annually to ensure it meets your risk tolerance.

Active Fund: Active funds can outperform benchmarks if managed well. Continue this SIP, but keep track of the fund’s performance.

Small Cap Fund: Small caps can offer high growth but with higher risk. Given your retirement goal, ensure this SIP doesn’t exceed 20% of your total SIPs, as it could add unnecessary volatility to your portfolio.

Assessment of Lump Sum Investments
Large Cap Fund: Large Cap funds are relatively stable, providing consistent returns. This should be a cornerstone of your portfolio.

Index Fund: As discussed, consider switching this to an actively managed fund for better returns.

Short Term Fund: This is a conservative choice, good for parking funds temporarily. However, for long-term growth, these funds may not be ideal.

Flexi Cap Fund: Diversification is key here, and the fund’s flexibility is advantageous. Continue to monitor its performance.

Mid Cap Fund: This fund offers growth potential but with some risk. Ensure this investment complements your overall portfolio strategy without overexposing you to mid-cap volatility.

Increasing Your SIP
Increasing your SIP by Rs 10,000 is a wise decision. Here’s how you might allocate it:

Allocate Rs 5,000 to a Balanced Advantage Fund: This will add stability to your portfolio by balancing equity and debt exposure. It’s a conservative choice that can offer better risk-adjusted returns.

Allocate Rs 5,000 to a Focused Equity Fund: This can potentially offer higher returns as the fund manager focuses on a limited number of high-conviction stocks.

Portfolio Rebalancing and Monitoring
Rebalancing your portfolio regularly is crucial. Markets can be unpredictable, and what works today might not work tomorrow. Review your portfolio every six months to ensure it’s aligned with your risk tolerance and retirement goals.

Final Insights
Your portfolio is well-diversified, but there are opportunities to optimize it further. By shifting from index funds to actively managed funds, and considering the guidance of a Certified Financial Planner, you can potentially achieve better returns. Increasing your SIP is a positive step towards securing your retirement, but make sure to allocate it wisely across different fund categories.

In summary:

Consider shifting from Index Fund to an actively managed fund.

Evaluate your exposure to small caps and ensure it aligns with your risk tolerance.

Invest the additional SIP amount in balanced and focused equity funds.

Regularly rebalance your portfolio and seek guidance from a CFP.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

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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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