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Ulhas

Ulhas Joshi  | Answer  |Ask -

Mutual Fund Expert - Answered on May 16, 2023

With over 16 years of experience in the mutual fund industry, Ulhas Joshi has helped numerous clients choose the right funds and create wealth.
Prior to joining RankMF as CEO, he was vice president (sales) at IDBI Asset Management Ltd.
Joshi holds an MBA in marketing from Barkatullah University, Bhopal.... more
SANTOSH Question by SANTOSH on May 12, 2023Hindi
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Sir, I have been investing in SIP for 6 years in the following schemes with an monthly sip of 5000 each. My question is should I continue with the scheme or any changes or correction is to be made in the same. 1) UTI Flexi Cap Fund (Formerly Known as UTI Equity Fund Direct Plan and Growth total investment amount as on todays date is 3,70,000/ 2) ICICI Prudential Blue Chip Fund Direct Plan Growth total investment amount Rs. 3,60,000/ 3) ICICI Prudential Nifty Next 50 Index Fund Direct Plan Growth total investment amount Rs. 1,15,000/ Intention to invest is for long term with good reasonable returns. Pls advise on the same

Ans: Hi Santosh, thanks for writing to me. You can continue investing in UTI Flexi Cap Fund and ICICI Blue Chip Fund as they are good funds. You can consider stopping investments in ICICI Prudential Nifty Next 50 Fund and begin investing the SIP amount in Nippon India Multi Asset Fund.
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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Hello Hardik, Iam 40 Years and have started investing in SIP for the past 6 months.Below are my monthly investment 1. Parag Parikh Flexi Cap Regular Growth - 3500 2. Canara Robeco Small Cap Fund Growth - 3000 3. HDFC Retirement Savings Fund Equity Growth - 3000 4. NPS - 3500 I am planning for 18 Years of investment and aiming to slowly increase the SIP to achieve corpus of 2.5-3.0 Cr. Kindly review and advice. Regards, Ram
Ans: Hi Ram,

It's great to see that you've started investing systematically towards your long-term financial goals. Here's a review of your current SIP investments:

Parag Parikh Flexi Cap Regular Growth: This fund follows a diversified approach across various market caps and geographical regions, which can provide stability to your portfolio. It's suitable for long-term wealth creation.
Canara Robeco Small Cap Fund Growth: Small-cap funds can be volatile in the short term but have the potential to offer high returns over the long term. Ensure you're comfortable with the risk associated with small-cap investments.
HDFC Retirement Savings Fund Equity Growth: This fund is designed to provide wealth accumulation for retirement. It's aligned with your long-term investment horizon and retirement goal.
NPS: The National Pension System (NPS) is a retirement-focused investment option offering tax benefits. It's prudent to contribute to NPS alongside other investments for retirement planning.
To achieve your target corpus of 2.5-3.0 Cr over 18 years, consider periodically reviewing your SIP contributions and adjusting them based on changes in your income, expenses, and market conditions. Additionally, diversify across asset classes to manage risk effectively.

As your financial goals evolve, consider consulting with a Certified Financial Planner to ensure your investment strategy remains aligned with your objectives.

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Ramalingam

Ramalingam Kalirajan  |9823 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 17, 2024

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Hii i am investing in SIP since 1 year in ICICI prudential commodities Fund direct growth Rs200 monthly, Tata digital India und direct growth Rs150 Monthly, HDFC Technology Fund direct growth Rs100 monthly, ICICI prudential Technology direct plan growth Rs100 monthly, Nippon India Pharma fund direct growth Rs300 monthly, Nippon India small cap fund direct growth Rs300 monthly, axis nifty IT index fund direct growth Rs1000 monthly, ICICI prudential bluechip fund direct growth Rs250 monthly, Aditya Birla Sun Life digital India fund direct growth Rs100 monthly, ICICI prudential NASDAQ 100index fund direct growth Rs300 monthly, HDFC transportation and logistics fund direct growth Rs200 monthly so I invested in above SIPs Total monthly i invest Rs3000 so please give me some suggestions or modifications if required
Ans: Your Current SIP Portfolio
You have been investing ?3,000 monthly across various SIPs for a year. Your chosen funds focus on technology, healthcare, commodities, and other sectors. This shows a good start towards disciplined investing.

Concentration in Technology Sector
A significant portion of your investments is in technology-focused funds. Technology funds can offer high returns but also come with high volatility.

Sector-Specific Funds
You also have investments in healthcare, commodities, and logistics funds. Sector-specific funds can be very volatile as they depend on the performance of their respective sectors.

Diversification
Your portfolio lacks diversification. Investing too much in a single sector increases risk. Diversification helps in balancing risk and returns.

Importance of Broad Market Exposure
Diversifying across different market segments reduces risk. Balanced exposure to large-cap, mid-cap, and small-cap funds is crucial. This strategy ensures you are not overly dependent on one sector's performance.

Adding Stability with Debt Funds
Including debt funds can provide stability. Debt funds offer regular returns and reduce the overall risk in your portfolio. This balance is vital for long-term growth.

Benefits of Actively Managed Funds
Actively managed funds can outperform index funds due to professional management. Fund managers actively select stocks to maximize returns. This can be advantageous, especially in volatile markets.

Disadvantages of Index Funds
Index funds mirror the market index and do not aim to outperform it. They lack flexibility in changing market conditions. Actively managed funds, on the other hand, adapt to market changes, providing better growth potential.

Direct Funds vs. Regular Funds
Direct funds have lower expense ratios but require thorough research and monitoring. Regular funds, through a Mutual Fund Distributor (MFD) with a Certified Financial Planner (CFP), offer professional guidance and management. This can be valuable for optimizing returns and managing risks effectively.

Suggested Modifications
Reduce Sector-Specific Overweight

Reduce the number of technology and sector-specific funds. This will help in balancing the portfolio and reducing sector-specific risks.

Increase Broad Market Exposure

Allocate more funds to diversified equity funds. Large-cap and multi-cap funds provide stable returns and reduce overall risk.

Include Debt Funds for Stability

Add debt or hybrid funds to your portfolio. This will provide regular returns and reduce the volatility of your overall investment.

Suggested Allocation
Technology Funds: Choose one or two funds to maintain some exposure but reduce concentration.
Broad Market Funds: Increase investment in large-cap and multi-cap funds for stable growth.
Debt Funds: Allocate a portion to debt funds for stability.
Regular Monitoring and Review
Monitor your investments regularly. Review fund performance annually and adjust your portfolio based on your financial goals and market conditions.

Conclusion
Your dedication to investing through SIPs is commendable. With a few adjustments, you can achieve a balanced and diversified portfolio. This will help you meet your long-term financial goals with reduced risk.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |9823 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jan 20, 2025

Asked by Anonymous - Jan 07, 2025Hindi
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Hello I am investing ?500/month in SBI PSU direct plan and nippon India multi cap fund. Should I continue with these investments? In addition to the above I am planning to invest ?2000 in few more SIPs. Pls suggest new SIPs My horizon is 5 years. Thanks TPG
Ans: You are currently investing Rs 500/month in SBI PSU Direct Plan and Nippon India Multi Cap Fund. Let us evaluate their suitability:

SBI PSU Direct Plan
This fund primarily invests in public sector undertakings (PSUs).
PSU sector funds are highly sector-specific, making them risky for a small, regular SIP.
Returns depend heavily on government policies and economic conditions.
Nippon India Multi Cap Fund
Multi-cap funds invest across large-cap, mid-cap, and small-cap stocks.
They offer diversification and balanced risk compared to sector-specific funds.
This fund is suitable for your 5-year investment horizon.
Recommendation:
Continue investing in Nippon India Multi Cap Fund for diversification and growth potential.
Consider switching from SBI PSU Direct Plan to a more diversified and growth-oriented equity mutual fund.
Factors to Consider for New SIPs
Before selecting new SIPs, assess the following:

1. Investment Horizon
Your 5-year horizon is relatively short for pure equity investments.
Consider hybrid or balanced funds for lower risk and consistent returns.
2. Risk Tolerance
If you can tolerate moderate risk, opt for multi-cap or large-cap funds.
Avoid small-cap or sector-specific funds for short-term goals.
3. Return Expectations
Equity funds can provide higher returns over 5 years but may face market volatility.
Balanced advantage funds or hybrid funds offer stable returns with lower risk.
4. Tax Efficiency
Equity mutual funds are taxed at 12.5% LTCG above Rs 1.25 lakh.
Balanced advantage funds are more tax-efficient than debt funds for 5 years.
Recommended SIP Categories
1. Multi-Cap or Flexi-Cap Funds
These funds invest across all market capitalisations.
They balance risk and returns, making them ideal for medium-term goals.
Include one such fund in your portfolio for diversification.
2. Large-Cap Funds
Large-cap funds invest in well-established, stable companies.
They are less volatile and suitable for a 5-year horizon.
3. Balanced Advantage Funds
These funds dynamically allocate assets between equity and debt.
They provide stability and consistent returns for medium-term goals.
4. Aggressive Hybrid Funds
These funds invest primarily in equity with a smaller allocation to debt.
They offer better returns than pure debt funds with moderate risk.
Suggested Allocation for New SIPs
Monthly SIP Amount: Rs 2,000
Multi-Cap Fund: Rs 1,000/month.
Balanced Advantage Fund: Rs 500/month.
Large-Cap Fund: Rs 500/month.
This allocation ensures a mix of growth and stability. It is also tax-efficient and aligned with your investment horizon.

Tax Considerations
Equity Mutual Funds
Gains above Rs 1.25 lakh are taxed at 12.5% LTCG.
Avoid frequent withdrawals to minimise tax liability.
Balanced Advantage Funds
These funds are more tax-efficient than pure debt funds.
Their dynamic allocation reduces risk and improves post-tax returns.
Key Recommendations
Switch from SBI PSU Fund: PSU funds are sector-specific and not ideal for short-term goals.
Continue Nippon Multi-Cap Fund: This fund aligns with your horizon and provides diversification.
Add New SIPs: Invest in multi-cap, balanced advantage, and large-cap funds.
Review Regularly: Review your portfolio every 6 months with a Certified Financial Planner.
Avoid Sector-Specific Funds: These funds are too risky for a 5-year horizon.
Final Insights
Your disciplined SIP investments are a great start. By diversifying further with multi-cap and balanced advantage funds, you can optimise your portfolio for stability and growth. Ensure regular reviews and stick to your investment horizon for the best results.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

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My son got 245 in bits .He can get any Brecht branch
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Recommendation: Considering consistent cutoff trends and seat matrices, prioritize B.E. Civil and Manufacturing Engineering at BITS Pilani for guaranteed allotment, consider Chemical Engineering at Pilani via waitlist movement, and secure Chemical, Civil, or Manufacturing Engineering at BITS Hyderabad or Goa for assured admission, capitalizing on slightly lower cutoffs and ample seat availability. All the BEST for a Prosperous Future!

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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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