I am investing through SIP in the following 1. Hdfc small cap - 8000 2. Icici nifty next fifty - 3000 3. Mirae Asset large cap - 4000 4. Hsbc midcap - 6000 5. Sbi flexi cap- 4000 and planning to add on one more sip in Motilal Oswal S&P 500 index, in which already lumpsum investment has been made. And for the last three years investing lumpsum in Axis long term equity for tax saving, shall I continue with all these funds or need to make any changes.

Ans:

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.

Ans: Assessing Your Mutual Fund Portfolio for Optimal Growth

Current Portfolio Overview:

Your current mutual fund portfolio comprises several funds across different categories, including Mirae Asset emerging blue chip fund, Aditya Birla Sunlife 96 tax relief, Axis long term Equity fund, Canara Robeco Equity tax saver fund, and Sundaram Diversified equity.

Evaluation of Current Investments:

Your portfolio demonstrates a diversified approach, spanning both large-cap and tax-saving funds.

Assessment of Fund Performance:

Mirae Asset Emerging Blue Chip Fund: This fund has shown consistent performance historically and may continue to deliver good returns over the long term.

Aditya Birla Sunlife 96 Tax Relief: As a tax-saving fund, it offers the dual benefit of tax savings under Section 80C and potential capital appreciation.

Axis Long Term Equity Fund: This ELSS fund has a track record of delivering robust returns and can be considered for long-term wealth creation.

Canara Robeco Equity Tax Saver Fund: Similar to other ELSS funds, it offers tax benefits along with the potential for capital appreciation.

Sundaram Diversified Equity Fund: This fund focuses on diversified equity investments and aims to generate wealth over the long term.

Recommendations:

Review Fund Performance: Evaluate the performance of each fund against its benchmark and peers to ensure it aligns with your investment objectives.

Consider Market Conditions: Assess the current market conditions and economic outlook to gauge the potential performance of your funds in the future.

Consult a Certified Financial Planner: Seek guidance from a Certified Financial Planner (CFP) to review your investment strategy and make informed decisions based on your financial goals, risk tolerance, and investment horizon.

Consolidate and Rebalance: Consider consolidating your mutual fund holdings to streamline your portfolio and reduce overlap. Rebalance your portfolio periodically to maintain an optimal asset allocation mix.

Stay Invested for the Long Term: Avoid making impulsive decisions based on short-term market fluctuations. Stay invested for the long term to benefit from the power of compounding and potential wealth creation.

Final Thoughts:

In conclusion, maintaining a well-diversified mutual fund portfolio is essential for long-term wealth creation. Regularly monitor your investments, review fund performance, and seek professional advice to make informed decisions aligned with your financial goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: Your dedication to investing and the discipline to not withdraw funds is commendable. Let's assess your current portfolio and make informed decisions about the next steps.

Current Portfolio Overview

You have invested in a mix of large-cap, tax-saving, and diversified equity funds. The current value of your investments totals Rs 10.2 lakhs. Stopping SIPs three years ago and holding onto these investments shows patience and long-term thinking.

Evaluating Existing Funds

Mirae Asset Emerging Bluechip Fund: This fund has a good track record and strong performance in the mid-cap segment.

Aditya Birla Sun Life Tax Relief 96: A well-established ELSS fund with consistent returns.

Axis Long Term Equity Fund: Another strong performer in the ELSS category with good returns.

Canara Robeco Equity Tax Saver Fund: Known for its balanced approach in the ELSS category.

Sundaram Diversified Equity Fund: Provides diversification but may not be performing as well as other funds.

Assessing Fund Performance and Strategy

Review the performance of each fund over the last three years. Compare them to their benchmarks and peer funds. Consider the following steps based on this assessment:

Continuing with High Performers

Keep the funds that have shown consistent performance and align with your risk tolerance. These include Mirae Asset Emerging Bluechip, Aditya Birla Sun Life Tax Relief 96, and Axis Long Term Equity.

Re-evaluating Underperformers

Funds like Sundaram Diversified Equity should be re-evaluated. If they consistently underperform, consider switching to better-performing funds.

Lump Sum Investment Strategy

If you decide to switch underperforming funds, invest the proceeds as a lump sum in well-performing funds. Consider the following options:

Diversifying with Large-Cap and Balanced Funds

Invest in large-cap and balanced funds for stability and steady growth. These funds provide less volatility and consistent returns.

Sectoral and Thematic Funds

While sectoral funds can offer high returns, they come with higher risk. Consider them for a small portion of your portfolio.

Advantages of Actively Managed Funds

Actively managed funds adapt to market changes and aim to outperform benchmarks. Professional management can enhance returns compared to passive index funds.

Disadvantages of Index Funds

Index funds merely track market indices and may not perform well during market downturns. They lack the adaptability of actively managed funds.

Benefits of Investing Through a Certified Financial Planner

A Certified Financial Planner provides tailored advice and professional oversight. This ensures your portfolio aligns with your financial goals and risk tolerance.

Disadvantages of Direct Funds

Direct funds have lower expense ratios but lack professional guidance. Investing through a certified planner ensures informed decision-making and portfolio management.

Periodic Review and Rebalancing

Regularly review your portfolio's performance. Rebalancing ensures your investments stay aligned with your financial goals and market conditions. This approach optimises returns and manages risks effectively.

Creating a Comprehensive Financial Plan

Consider other financial aspects like emergency funds, insurance, and tax planning. A holistic financial plan ensures a secure and well-rounded approach to wealth creation.

Monitoring Market Trends

Stay informed about market trends and economic factors. This knowledge helps you make timely adjustments to your investments, maximising returns and mitigating risks.

Conclusion

Your disciplined investment strategy and diversified portfolio are commendable. With regular review and professional guidance, you can optimise your investments and achieve your financial goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: You have invested in multiple funds through SIP and lump sum. Holding them for the next 5 years is a good approach. However, it is important to check if your portfolio is diversified, aligned with your goals, and tax-efficient.

Overlap Between Funds
Your portfolio has multiple funds from the same category.

Too many similar funds do not improve returns but make tracking difficult.

Checking fund overlap can help avoid duplication.

Actively Managed vs Index Funds
You have index funds in your portfolio.

Index funds do not offer downside protection in market corrections.

Actively managed funds can outperform the index in volatile markets.

Switching from index funds to actively managed funds can improve growth.

Direct vs Regular Funds
You have invested in direct funds.

Direct funds may seem cheaper, but they lack expert guidance.

Investing through an MFD with CFP credentials ensures better selection and tracking.

Regular funds provide better decision-making support over time.

Sector-Specific and Thematic Funds
You hold a technology fund.

Sector funds are high-risk, as they depend on one industry’s performance.

If the sector underperforms, returns may be negative for years.

A diversified approach reduces risk compared to sector-based investing.

Smallcap and Midcap Allocation
You have smallcap and midcap funds.

These funds can be highly volatile in the short term.

Holding them for 5+ years is necessary to reduce risk.

Ensure you rebalance if the portfolio gets too aggressive.

Multi-Asset and Dividend Yield Funds
Multi-asset funds provide stability during market corrections.

Dividend yield funds are suitable for conservative investors.

These funds help in balancing the portfolio between risk and return.

Final Insights
Reduce overlapping funds and focus on fewer, well-performing funds.

Exit index funds and shift to actively managed funds for better growth.

Consider switching from direct funds to regular funds for expert tracking.

Keep sector funds below 10% of your portfolio to avoid concentration risk.

Continue SIPs in high-quality diversified funds for long-term wealth creation.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

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