Am I on the right track to build a 2 cr fund in 15 years with my current SIPs?

Ans: You may continue with 4 and 5 star rated funds; for remaining you may consider from below:

Equity - Value Fund:

1. Tata Equity Pe Fund - Growth
2. UTI Value Opportunities Fund - Growth Plan

Equity - Multi Cap Fund:

1. UTI Equity Fund – Growth
2. Axis Multicap Fund – Growth

Equity - Large Cap Fund:

1. UTI Mastershare Unit Scheme - Growth Plan
2. LIC MF Large Cap Fund-growth

Equity - Mid Cap Fund:

1. MOSL Midcap 30 Fund – Growth
2. DSP midcap – growth

Equity - Small Cap Fund:

1. Kotak Small Cap Fund – Growth
2. Axis Small cap Fund - Growth

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.

All mentioned funds are performing well and have good potential in the long term.

However, for Nippon Power and Infra Fund - Sectoral funds focus on a specific sector or industry and it is difficult to predict which sector will perform and how long. Hence, we recommend going for diversified funds to avoid the concentration risk.

Ans: Your commitment to investing at such a young age is commendable. Achieving Rs 1 crore in the next 10-15 years is a realistic goal with your disciplined approach.

Current SIP Strategy

You have started SIPs in four diversified funds, totaling Rs 7,000 per month. This strategy, combined with a 30% annual step-up, is a strong foundation for growth.

Evaluating Your Fund Selection

Your chosen funds cover flexi-cap, small-cap, mid-cap, and value categories. This diversification is prudent, spreading risk and capturing growth across different market segments.

Lump Sum Investment Strategy

You plan to invest in sectoral and large-cap funds. These choices can add stability and sector-specific growth to your portfolio. Diversifying across sectors reduces risk and enhances potential returns.

Sectoral Fund Considerations

Investing in sectoral funds like power and infrastructure can be rewarding. However, these funds are highly volatile. Ensure they constitute a smaller portion of your portfolio to manage risk.

Large-Cap Fund Choices

Choosing between Canara Robeco Bluechip Equity and Mirae Asset Large Cap Fund is wise. Both funds are known for stability and steady growth. Allocating your lump sum and quarterly investments in these funds balances your portfolio.

Advantages of Actively Managed Funds

Actively managed funds offer professional management, adapting to market changes. This flexibility can result in higher returns compared to passive index funds, which simply track the market.

Disadvantages of Index Funds

Index funds mimic market indices and may not perform well in downturns. They lack the adaptability and professional oversight of actively managed funds, limiting potential returns.

Benefits of Investing Through a Certified Financial Planner

Investing through a Certified Financial Planner ensures tailored advice and professional management. They can help you make informed decisions and optimise your investment strategy.

Disadvantages of Direct Funds

Direct funds have lower expense ratios but lack professional guidance. Investing through a certified planner provides expert oversight, ensuring your portfolio aligns with your goals.

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

In addition to mutual funds, 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 achieve your goal of Rs 1 crore in the next 10-15 years.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: Your investment strategy looks well-diversified with a mix of large-cap, mid-cap, and small-cap funds. To achieve your goal of 1 crore in 10 years, consider the following suggestions:

SIP Step-up: Increase SIP amounts annually by 10-15% instead of 30% to maintain consistency and reduce the risk of overcommitting.
Fund Selection:
Large Cap: Consider adding a large-cap fund for stability.
Diversified: Add a multicap or flexi-cap fund for broader market exposure.
Lump Sum Investments: Continue with lump sum investments based on performance, but avoid high-risk strategies. Ensure proper research before investing.
Review and Rebalance: Regularly review your portfolio and rebalance if required to align with your financial goals and risk tolerance.
Consider consulting with a Certified Financial Planner for personalized advice tailored to your financial goals and risk profile.

Ans: Evaluating Your SIP Portfolio
Commendations on embarking on your SIP journey, a wise move towards securing your financial future. Let's delve deeper into your fund selection and assess its alignment with your goal of accumulating Rs 1 crore in 15 years.

Assessing Fund Selection
Your portfolio encompasses a mix of large-cap, mid-cap, and small-cap funds, each carrying distinct risk and return profiles.

Large-cap Funds
Investments in large-cap funds offer stability and lower volatility, typically in established companies with robust fundamentals.

Mid-cap and Small-cap Funds
Mid-cap and small-cap funds present higher growth potential but come with increased volatility, investing in smaller companies with prospects for rapid expansion.

Evaluating Growth Potential
Your inclination towards mid-cap and small-cap funds suggests a quest for higher growth potential. However, it's vital to weigh the associated risks.

Analyzing Fund Selection
Nippon India Large Cap Fund, ICICI Prudential Bluechip Fund, and SBI Magnum Mid Cap Direct Fund are reputable choices with established track records. Regular monitoring of their performance is essential.

SIP Amount Allocation
Allocating Rs 3,000 each to large-cap funds and Rs 2,000 to a mid-cap fund exhibits a balanced approach. Yet, investing only Rs 1,000 in a small-cap fund may limit its impact on your portfolio's growth potential.

Rebalancing Strategy
Regularly review your portfolio and rebalance if needed to ensure alignment with your risk tolerance and financial objectives.

Market Conditions
Stay abreast of market conditions, as they significantly influence fund performance. Knowledge of economic trends facilitates informed decision-making.

Importance of Patience
Investing is a long-term endeavor; exercising patience and avoiding impulsive decisions amidst short-term market fluctuations is prudent.

Professional Guidance
Consider seeking advice from a certified financial planner to optimize your investment strategy. They offer personalized recommendations tailored to your risk profile and financial goals.

Avoiding Direct Funds
Direct funds may seem appealing but demand active management and market expertise. Regular funds through an MFD with CFP credential ensure professional management and guidance, optimizing fund performance.

Conclusion
Your SIP portfolio displays promise, with a diversified allocation across market segments. Regular monitoring and professional guidance are imperative for achieving your goal of accumulating Rs 1 crore in 15 years.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in