Hi Sir, I have been investing in the following mutual funds since 4 years in the form of SIP. my investment horizon is 15 years. 1) PGIM Ind Midcap Opp Dir-IDCW : 2500 2) Nippon Ind Small Cap Dir-IDCW : 2000 3) SBI Small Cap Dir-G : 1500 4) Axis Small Cap Dir-IDCW : 2500 5) Nippon Ind Multi Cap Dir-IDCW : 3000 6) Quant Infra Reg-IDCW : 2000 7) Axis Midcap Dir-IDCW : 2000 8) Parag Parikh Flexi Cap Dir-G : 2000 9) Quant Multi Asset Reg-IDCW : 3000 10) Mirae Asset Emrgng Bluechip Reg-IDCW : 2500 Can you please help me out on below queries .... 1) Exit/Continue in above mutual funds? 2) How much amount will be generated after 15 years? 3) Willing to invest 5000 more, please suggest mutual funds Thanks

Ans: It's great that you're investing your monthly surplus in SIPs to build your wealth.

You have a well-diversified portfolio and the funds in your portfolio are performing well in the current market scenario. In the finance planning of any portfolio, we consider many factors, including client age, risk profile, current asset allocation, etc.

With your existing accumulated bulk investments of Rs 9.06 lakhs and ongoing SIPs of Rs 20,000 you will be able to accumulate the corpus after 9 years (2033) of Rs 64 lakhs with expected returns of 12%.

To achieve your wealth target of Rs 1 crore, it's advisable to increase your current investments. Considering your existing bulk investment of Rs 9.06 lakhs, an additional monthly investment of approximately Rs 39,000 is required. As you are already contributing Rs 20,000 per month through SIPs, an incremental SIP amount of around Rs 19,000 would be required.

Ans: Review the performance of each fund and consider factors like consistency, fund manager expertise, and alignment with your investment goals. Exit funds with consistently poor performance or if your investment thesis has changed. Continue with funds that have demonstrated strong performance and align with your long-term goals.

To estimate the amount generated after 15 years, consider the historical returns of each fund, but remember past performance is not indicative of future results. Utilize online calculators or consult a financial advisor for a more accurate projection based on your specific investment amounts and expected returns.

For additional investments of 5000 per month, consider diversifying across different asset classes like large-cap, mid-cap, and flexi-cap funds to spread risk. Research funds with a track record of consistent performance and align with your risk tolerance and investment horizon. Consulting a financial advisor can provide personalized recommendations based on your financial goals and risk profile.

Ans: Your portfolio has a mix of flexi-cap, sectoral, and small-cap funds, which is good for diversification. Considering your age and investment horizon, here are a few suggestions:

Risk Assessment: Ensure you're comfortable with the risk level, especially with the small-cap funds, which can be volatile but offer high growth potential.

Goal Alignment: Make sure each fund aligns with a specific financial goal. For example, flexi-cap for long-term wealth creation, technology fund for growth in the tech sector, and small-cap funds for higher growth potential but with higher risk.

Portfolio Balance: It might be beneficial to review your portfolio's asset allocation periodically. Ensure you're not too heavily skewed towards one asset class, which can expose you to unnecessary risks.

Performance Review: Regularly monitor the performance of your funds. If a fund consistently underperforms its benchmark or peers, consider replacing it with a better-performing alternative.

Emergency Fund: Before investing, ensure you have an emergency fund set aside to cover 3-6 months of living expenses.

Professional Advice: Consider consulting with a financial advisor for personalized advice tailored to your financial situation and goals.

Overall, your portfolio seems diversified and aligned with your long-term goals. Regular monitoring and adjustments will help you stay on track towards achieving your financial objectives.

Ans: Assessing Your Current SIP Portfolio
Your SIP portfolio is quite diversified, which is a positive step towards achieving your goal. You’ve chosen a mix of funds, which shows your interest in different sectors. However, it's important to assess whether this diversification aligns with your long-term goal of generating Rs. 5 crores in 15-20 years.

Portfolio Evaluation
Sectoral Exposure:
Your portfolio has significant exposure to sectoral and thematic funds, such as infrastructure and defence. While these funds can perform well in certain market conditions, they also carry higher risk due to their sector-specific nature.

Over-diversification Risk:
You've invested in 10 different funds. This might lead to over-diversification, where the benefits of diversification are diminished. Managing and tracking too many funds can also become complex over time.

Need for Core Funds:
While you have thematic and sectoral funds, it's essential to have a strong foundation in core funds like large-cap or flexi-cap funds. These funds provide stability and long-term growth, essential for achieving your Rs. 5 crore target.

Recommendations for Improvement
Focus on Core Funds:
Consider reallocating some of your SIPs to core funds that provide consistent growth. Actively managed flexi-cap or large-cap funds can offer better risk-adjusted returns over the long term.

Reduce Sectoral Concentration:
While sectoral funds can boost returns during specific market phases, they should not dominate your portfolio. Consider reducing your allocation to these funds and balancing it with diversified equity funds.

Avoid Direct Funds:
If you're investing in direct plans, consider switching to regular plans through a Certified Financial Planner. Regular plans offer professional guidance, which is crucial for long-term wealth creation.

Steps Towards Achieving Rs. 5 Crore Goal
Increase SIP Contribution:
To achieve Rs. 5 crores, you might need to gradually increase your SIP amount. Consider a step-up SIP strategy, where you increase your contribution by a fixed percentage annually.

Stay Committed to Long-Term:
Your goal aligns with a 15-20 year horizon, which is ideal for equity investments. Stay committed to your SIPs, even during market volatility, to benefit from the power of compounding.

Regular Portfolio Review:
Conduct an annual review of your portfolio with a Certified Financial Planner. This will help you stay on track with your goal and make necessary adjustments as needed.

Final Insights
Your current SIP portfolio has a mix of opportunities and risks. By refining your investments, focusing on core funds, and regularly reviewing your strategy, you can increase your chances of reaching your Rs. 5 crore goal in the next 15-20 years.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in