Dear Sir,

1. I have invested Rs 3 lakhs in Kotak Global Innovation Fund of Fund, regular growth plan. Since the beginning of this fund, it is showing a downward trend. Should I stay in this fund or exit?

2. I have invested Rs 1 lakh SBI Balance Advantage Fund, regular plan growth. Since the beginning this fund, it is showing slight upward trend. Should I stay in this fund or exit?

Please advise on the above. 

Ans: Too many funds, please consolidate it in 4 to 5 funds

Ans:

Ans: Please continue

Ans: CHANGE

Ans: Reviewing Your Current Investment Setup
You invest a total of ?1.2?lakh per month across five equity funds.

All funds are actively managed, which helps in growth and flexibility.

The current mix leans heavily toward aggressive equity exposure.

There is limited diversification across asset types.

You’ve built good equity discipline over 3+ years.

That consistency forms a strong foundation.

Evaluating Each Fund Category
Multi-Asset & Hybrid Approach
Investing ?20k/month in a flexible hybrid fund balances stock risk.

Hybrid funds add buffer during market volatility.

Retaining this allocation makes sense for risk moderation.

Value Discovery Equity
Value-focused fund adds cycle-based opportunity.

It provides diversification via different investing themes.

Good to retain for broad equity exposure.

Thematic Fund (Recent)
Thematic funds carry sector-specific or theme-based risk.

You’ve only invested ?20k/month for 4 months.

Consider capping thematic exposure at 5–10% of equity.

Too much thematic investment can raise volatility.

Focused 30 Equity Fund
High-conviction, 30-stock fund adds focused diversity.

It’s a distinct equity style useful in long-term portfolio.

Continuing is fine if manager’s philosophy aligns with your goals.

Next-Gen / Gen-Next Fund
This fund invests in future leaders and companies.

Good for capturing innovation-driven growth.

But it’s a thematic/small-mid blend—risky when overweighted.

Keep at 5–10% equity to avoid concentration risk.

Assessing Your Portfolio Allocation
You currently have five equity-heavy funds, totalling ?1.2?lakh/month.

That’s a concentrated equity posture without debt cushioning.

You lack a systematic debt or hybrid corridor to smooth markets.

Without yearly rebalancing, this can amplify risk.

A goal-based breakdown is needed: equity (growth), debt/hybrid (balance), liquid buffer.

Considering HDFC Mid-Cap Opportunity via Weekly SIP
The fund is actively managed and mid-cap focused—fitting your growth bias.

Investing weekly (?2,000/week = ?8,000/month) reduces lump-sum risk.

Weekly SIP averages out entry price—beneficial in volatile assets.

Adds discipline for gradual entry, rather than one-shot allocation.

Mid-cap suits your age and time horizon if balanced well in portfolio.

Proposed Portfolio Rebalancing
To simplify and increase long-term resilience, consider this restructuring:

1. Continue Hybrid Fund: ?20k/month in multi-asset fund

Ensures steady performance and reduces equity-only swings

2. Equity Core Allocation: ?60k/month across:

Large/Flexi-cap equity: ?20k

Mid-cap fund (like HDFC opportunity): ?20k (via weekly SIP)

Value discovery: ?10k

Small/thematic/next-gen combined: ?10k

3. Use Weekly SIP in Mid-Cap: ?2k/week into HDFC

Stabilises entry and control volatility

4. Gold Allocation: ?5k/month into gold ETF/fund

Acts as hedge against inflation and equity dips

5. Liquid Fund: ?5k/month for buffer and redemption flexibility

Total monthly savings becomes ?1.2?lakh + an additional ?8k = ?1.28?lakh.
You can start by adjusting existing SIPs and adding small gold/liquid allocations—it’s tailored to your equity-forward style.

Why Active Funds and Regular Plans Are Beneficial
Active managers can mitigate losses during downturns.

Index funds lack discretion: they ride the entire market movement.

Your timeframe and style suit active equity and theme selection.

Regular plans via CFP-backed distributors give advice, planning, and tax discipline.

Direct plans save cost but lack structure, mental comfort, and monitoring.

Weekly vs Monthly SIP: Benefits Breakdown
Weekly SIP smoothens volatility more than monthly SIP.

Smaller periodic contributions avoid timing mistakes.

If your salary permits, start with ?2k weekly in mid-cap.

Monitor impact before ramping up weekly SIPs further.

Monitoring and Rebalancing Strategy
Review allocation every six months: equity vs hybrid/gold/liquid.

If equity grows beyond 65–70%, shift new SIPs into hybrid or liquid.

Rebalance through future contributions to reduce tax impact.

Annual pass-through checks ensure you stay on risk target.

Tax Implications and Efficiency
Equity LTCG beyond ?1.25 lakh taxed at 12.5%; STCG at 20%.

Hybrid and debt funds taxed per your income slab.

Gold ETF gains: LTCG, except if held under 3 years (STCG).

Under a regular plan, your advisor can schedule redemptions to manage tax liabilities and annual allowances.

Protecting Against Downside and Enhancing Stability
Hybrid fund ensures cushion during equity corrections.

Gold adds inflation protection and non-stock exposure.

Liquid fund avoids cash flow disruptions during emergencies.

Balanced equity structure across large, mid, small/theme segments adds stability.

Risk Management and Asset Allocation Ranges
You might aim for these approximate targets:

Equity: 60–65%

Hybrid: 20–25%

Gold: 5–7%

Liquid: 5–10%

These ranges protect from high equity swings and give growth potential for medium to long-term goals.

Protecting Your Health and Personal Safety Net
No mention of life or term-insurance—essential given dependents.

At age?40, buy term life insurance covering at least 10 times your income.

Health insurance of ?5–10 lakh protects against emergencies.

Insurance premiums are minor but crucial for a secure investment plan.

Execution Steps to Implement the Plan
Maintain existing hybrid SIP.

Retain your value discovery fund as core equity.

Shift a portion of thematic/next-gen into a monthly mid-cap SIP.

Begin ?8k weekly SIP into mid-cap fund.

Start ?5k/month gold fund.

Start ?5k liquid fund monthly.

Stop or reduce one overlapping equity SIP to fund liquid and gold.

Regularly check allocation drift and rebalance via contributions.

Review and Adjustment Timeline
Quarterly: Check NAV, returns, and emerging fund performance.

Half-yearly: Rebalance contributions among asset buckets.

Annually: Review goals, inflation, risk tolerance; adjust portfolio if necessary.

Final Insights
You have built solid equity discipline over years—already successful.

Rational portfolio trimming and reallocation adds resilience.

Weekly SIP into mid-cap aligns with your risk appetite and investment style.

Hybrid, gold, and liquid assets help smooth returns across cycles.

Active funds with CFP oversight combine growth, protection, and coaching.

This structured approach supports both capital growth and risk management over the next three years and beyond.

Feel free to connect if you’d like help choosing specific funds or setting periodic review reminders.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment