Hi Kirtan, I am 55 Yrs. working in private company, with monthly income of 3.0 lacs. Current investments in SIP since 2018 are - (1)Aditya Birla Sun Life Frontline Equity Growth-4000/ month(2)HDFC Mid-Cap Opportunities Fund - Growth- 4000/ month (3)ICICI PRu Value discovery G - 4000/- (4)UTI Transportation & Logistics G- 4000/ month(5) From 2023 : 1)SBI Contra direct Plan Growth - 10000/month (2)Canara Rebeco small cap fund direct growth - 10000/month. Would like to achieve for retirement corpus of 2 crore- Kindly review my investments , and suggest if any modifications required. I have other investments in FD- 50 lac, can take risk for till retirement Raj

Ans: Please continue

Ans: Your portfolio has too many funds, it's over-diversified.

Lumpsums can be continued.

In SIPs, you may continue with 1, 2, 5, 8 and 11.

 

Ans: Your Retirement Goal
You aim to build a ?10 crore retirement corpus by age 55, starting at age 37. This is a great goal, and you have 18 years to achieve it.

Current SIP Investments
You are currently investing ?68,500 per month across various mutual funds. Here’s a breakdown of your investments:

Axis Small Cap Fund: ?6,500 monthly
Nippon Small Cap Fund: ?6,500 monthly
Mahindra Manulife Small Cap Fund: ?6,500 monthly
ICICI Prudential Nifty Midcap 150 Index Fund: ?11,000 monthly
Navi Nifty Next 50 Index Fund: ?12,000 monthly
Parag Parikh Flexicap Fund: ?13,000 monthly
Bandhan Nifty 50 Index Fund: ?12,000 monthly
HDFC Dividend Yield Fund: ?4,000 monthly
Bandhan Sterling Value Fund: ?4,000 monthly
Analysis of Current Investments
1. High Exposure to Small Cap and Mid Cap Funds
Your investments have a significant allocation to small cap and mid cap funds. These funds offer high returns but come with high volatility. Given your risk tolerance, this is suitable for long-term growth.

2. Index Funds
You have invested in several index funds. While they offer low expense ratios, they lack the flexibility to outperform the market in volatile conditions. Actively managed funds could provide better returns with professional management.

3. Flexicap Fund
The Parag Parikh Flexicap Fund provides diversified exposure across market caps. This is good for balancing risk and return.

4. Dividend Yield Fund
HDFC Dividend Yield Fund focuses on stocks with high dividend yields. This is more suited for regular income rather than aggressive growth.

5. Value Fund
Bandhan Sterling Value Fund aims to invest in undervalued stocks. This can be beneficial but requires patience as value stocks may take time to perform.

Recommendations for Improvement
1. Reduce Index Fund Exposure
Index funds provide market returns but lack the potential for higher growth. Consider reducing exposure to these funds.

2. Increase Allocation to Actively Managed Funds
Actively managed funds can outperform the market with expert management. Allocate more to well-performing actively managed funds for higher growth potential.

3. Diversify Across Market Caps
While your small cap exposure is good for high returns, balancing with more large cap and flexicap funds can reduce volatility.

4. Consider Equity and Debt Mix
For long-term stability, a small portion in debt funds can provide a safety net. Consider allocating 10-20% of your portfolio to debt funds.

Suggested New Allocation
Actively Managed Large Cap Fund: ?10,000 monthly
Actively Managed Mid Cap Fund: ?10,000 monthly
Actively Managed Small Cap Fund: ?10,000 monthly
Flexicap Fund: ?13,000 monthly
Actively Managed Debt Fund: ?5,000 monthly
Remaining in Current Funds: Distribute the rest evenly across your high performing small cap and flexicap funds.
Conclusion
Your current SIPs reflect a strong commitment to building a substantial retirement corpus. By reallocating some of your investments to actively managed funds and diversifying across market caps, you can enhance your portfolio's growth potential. Regular monitoring and adjustments will ensure you stay on track to meet your goal of ?10 crore by age 55.

Regular Monitoring and Review
Annual Review: Assess the performance of your funds annually. Make adjustments based on market conditions and financial goals.
Rebalancing: Ensure your portfolio remains aligned with your risk tolerance and investment objectives through periodic rebalancing.
Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: You've already taken a commendable step by starting your investments, and aiming for a significant retirement corpus is a great goal. Let's evaluate your current investments and suggest some adjustments.

Diversification:
While you have diversified across different categories like flexi-cap, mid-cap, and small-cap, you might want to consider adding a large-cap or a balanced fund to bring stability to your portfolio.
Diversification across different market caps and sectors can help in reducing the overall risk.
Consistency:
It's good to see that you've been investing consistently, which is the key to long-term wealth creation.
Review the performance of your funds annually to ensure they are aligning with your financial goals.
Risk Assessment:
Mid-cap and small-cap funds tend to be riskier but offer higher growth potential. Ensure you are comfortable with the associated volatility and risk.
As you approach closer to your retirement age, you might want to gradually shift towards more conservative investment options to safeguard your corpus.
Goal Planning:
To achieve a retirement corpus of 5 Cr by the age of 45, you need to ensure your investments are aligned with this goal.
Consider increasing your SIP amounts periodically or adding lump-sum amounts whenever possible to accelerate your wealth accumulation.
Professional Advice:
Consulting a Certified Financial Planner can provide personalized advice tailored to your financial situation and goals.
They can help in optimizing your portfolio, ensuring you are on track to achieve your retirement goal, and making necessary adjustments based on changing market conditions and your financial situation.
In conclusion, while your current investments are a good start, diversifying further and ensuring alignment with your retirement goal will be beneficial. Regularly reviewing and adjusting your portfolio as needed can help you stay on track. Remember, investing is a marathon, not a sprint, and staying disciplined and patient will be key to achieving your financial goals.