I am investing Rs 7,000 per month in the following SIPs since 2018 and continuing in the same portfolio.

I want to exit from under-performing funds and start investing in a new SIP portfolio.

Please suggest a better option for me. Also, will I get tax benefit now also from the ELSS funds as the three-year term lock-in period is over?

L&T Midcap Fund (Rs 2,000), Motilal Oswal Long Term Equity Fund (Rs 3,000), Aditya Birla Sun Life Tax Relief 96 Fund (Rs 2,000).

Ans: In Large Cap: Axis Bluechip Fund - Growth is a better option

Too many Sectoral Funds; the risk of concentration is high; instead diversified funds are better option.

1. UTI Equity Fund – Growth
2. DSP mid cap Fund – Growth
3. Tata Large & Mid Cap Fund - Growth
4. Canara Robeco Emerging Equities – Growth

Above funds have decent exposure to Pharma, Banking and Technology

Rest of the funds are okay.

Ans:

Ans: Assessing Your Mutual Fund Investments and Planning for the Future

Your portfolio demonstrates a disciplined approach to mutual fund investing over the years. Let's evaluate your current holdings and chart a course for future investments.

Analyzing Existing SIPs

HDFC Top 200, ICICI Prudential Large & Midcap, and Bandhan Flexicap Funds have been part of your investment journey for several years. These funds offer exposure to different market segments, providing diversification benefits.

BSL Frontline Equity Fund, while stopped in 2020, has a long track record of performance. It's essential to review the reasons for discontinuing this SIP and assess whether it aligns with your current investment strategy.

Mirae Asset Bluechip Fund and HDFC Flexi Cap Fund, initiated more recently, contribute to diversification and may offer growth potential.

Evaluating Performance and Suitability

Review the performance of each fund relative to its benchmark and peer group. Assess whether the fund manager's investment approach and strategy align with your risk tolerance and investment objectives.

Consider the consistency of returns, risk-adjusted performance, and fund management quality. Additionally, evaluate the fund's expense ratio and turnover ratio to ensure cost-effectiveness.

Deciding Whether to Continue or Exit

Continue SIPs in funds with consistent performance, robust fundamentals, and alignment with your investment goals.

Consider exiting funds that consistently underperform their benchmarks or peers, have experienced significant changes in fund management, or deviate from your risk profile.

Planning Additional Investments

Given your intention to invest an additional Rs. 15,000, consider the following options:

Increase SIP amounts in existing funds with proven track records and growth potential. This approach maintains continuity and capitalizes on the strengths of your current portfolio.

Explore new funds that complement your existing holdings and provide exposure to underrepresented sectors or asset classes. Conduct thorough research and seek professional advice to identify suitable options.

Seeking Professional Guidance

As a Certified Financial Planner, I recommend conducting a comprehensive portfolio review to ensure alignment with your financial goals and risk tolerance. Regular monitoring and periodic adjustments are essential to optimize your investment outcomes.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: Review and Recommendations for Your Mutual Fund Portfolio
Overview of Your Current Investments
You have a diversified portfolio with the following SIPs and a lump sum investment:

SBI Contra Fund: ?2,000/- per month
SBI Small Cap Fund: ?2,000/- per month
SBI Retirement Benefit Fund Aggressive Growth: ?2,000/- per month
SBI PSU Fund: Lump sum ?11,000/-
Quant Small Cap Fund: ?1,000/- per month
ICICI Prudential Infrastructure Growth Fund: ?500/- per month
Compliments on Your Investment Strategy
Your disciplined approach to investing through regular SIPs is commendable. Investing in a variety of funds shows your understanding of diversification. This strategy helps mitigate risks and enhances the potential for growth.

Analytical Review of Your Portfolio
SBI Contra Fund:

Contra funds invest in undervalued stocks, anticipating future growth.
These funds can offer high returns but come with increased risk.
Consider if this aligns with your risk tolerance and investment horizon.
SBI Small Cap Fund:

Small cap funds can generate significant growth over time but are highly volatile.
Ensure this fund aligns with your risk appetite and long-term goals.
SBI Retirement Benefit Fund Aggressive Growth:

This fund focuses on long-term growth for retirement.
It's a good choice for aggressive investors aiming for high returns over time.
SBI PSU Fund:

Investing in Public Sector Units can be beneficial but is sector-specific and carries concentration risk.
Regularly review this fund's performance and the overall sector outlook.
Quant Small Cap Fund:

Like the SBI Small Cap Fund, this fund offers high growth potential with high risk.
Diversifying within the small cap segment might not be necessary.
ICICI Prudential Infrastructure Growth Fund:

Infrastructure funds invest in infrastructure-related companies.
These funds can provide good returns during economic growth periods but are sector-specific and volatile.
Recommendations for Portfolio Improvement
Diversify Across Market Caps and Sectors:

Your portfolio has a significant focus on small cap and sector-specific funds.
Consider adding a large cap or a diversified equity fund to balance risk and stability.
Consolidate Small Cap Investments:

Holding multiple small cap funds may not be necessary.
You can consolidate into one fund to avoid overlap and simplify management.
Review Sector-Specific Funds:

Sector-specific funds like PSU and Infrastructure can be volatile.
Regularly monitor their performance and consider switching to more diversified funds if needed.
Consider Professional Management:

Direct funds have lower expenses but require active monitoring.
Investing through a certified financial planner can provide professional management and potentially better returns.
Steps for Continued Success
Regular Portfolio Reviews:

Periodically review your portfolio to ensure it aligns with your goals and market conditions.
Make adjustments as needed to stay on track.
Increase SIP Amounts Gradually:

As your income grows, consider increasing your SIP amounts.
This will help you build a larger corpus over time.
Maintain an Emergency Fund:

Ensure you have an emergency fund to cover unexpected expenses.
This prevents the need to withdraw from your investments prematurely.
Stay Informed and Educated:

Stay updated on market trends and financial news.
Continuous learning will help you make informed investment decisions.
Conclusion
Your current portfolio is well-diversified but has a significant focus on small cap and sector-specific funds. Consider balancing it with more stable large cap or diversified equity funds. Regularly review and adjust your investments to align with your goals and risk tolerance. Your disciplined investment strategy and thoughtful planning are commendable. With consistent efforts and regular reviews, you are well on your way to achieving your financial goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in