Age: 29 
I am a salaried working professional. 

I hold the following ELSS funds in my portfolio for SIP.

a. AXIS LONG TERM EQUITY FUND - GROWTH
b. DSP TAX SAVER FUND - GROWTH
c. FRANKLIN INDIA TAXSHIELD - GROWTH
d. MIRAE ASSET TAX SAVER FUND REGULAR PLAN - GROWTH

I have been doing a monthly SIP for the above fund for the last 2 years (April 2017). Do you think I should restructure my portfolio or keep as it is? My time horizon is the next 5 years

Which short term funds (up to 1 year) with no-lock in, would you suggest for investing my idle cash (2-5 lakh) which is lying in a bank savings account? How is the capital gain taxed on such schemes? 

Ans: These are good funds in their categories, ie ELSS, focused and short duration debt fund.

If the objective is growth and corpus creation, debt fund can be substituted with equity fund -- ie DSP Quant will be suitable.

 

Ans: 2500 x 4 will give adequate exposure to all segments and sectors of the market.

5000 x 2 is also not a bad strategy provided the portfolio of the scheme is known and then decision is made based upon the strategy of the funds.

As per portfolio theory and empirical studies have shown that a portfolio is completely diversified with 25 to 27 stocks, post that it is a drag!

Ans: Hello, since the view is long term with 15yrs + i would like to give the following suggestions :
30% mid cap
30% small cap
10% value fund
15% large and mid
15% thematic ( can be consumption , IT , etc )

Please note that these suggestions are based on your stated goals and the information you provided. It is always a good idea to consult with a financial advisor in person to better understand your risk tolerance, time horizon, and specific financial goals.
Remember that past performance is not a guarantee for future returns, and it's always important to review your investments periodically to ensure they remain aligned with your financial objectives.

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: Firstly, I commend you for taking proactive steps towards building your financial future at such a young age. Your commitment to increasing your investments over time is commendable and will serve you well in achieving your financial goals.

Regarding your query about ELSS tax saver funds, they can indeed be a valuable addition to your investment portfolio. ELSS funds not only offer tax benefits under Section 80C of the Income Tax Act but also have the potential to generate higher returns over the long term compared to traditional investment avenues like PPF.

As for comparing ELSS funds with small-cap funds, it's essential to understand that they belong to different categories with varying risk profiles. Small-cap funds typically carry higher risk but also have the potential for higher returns, while ELSS funds invest primarily in equity markets and have the added advantage of tax benefits. Both can play a role in diversifying your investment portfolio and achieving your financial goals.

Considering your goal of attaining financial freedom in the next ten years with a corpus of over 1 crore, it's essential to review your investment strategy periodically and make adjustments as needed. Increasing your monthly SIP to 30k and potentially reallocating some funds from other schemes could be a prudent move, given your high income and relatively low living expenses.

Regarding your existing LIC Jeevan Anand policy, surrendering it and reinvesting the proceeds in mutual funds could potentially yield higher returns, especially considering your long investment horizon and risk tolerance. However, it's essential to evaluate the surrender value, any applicable penalties, and the potential tax implications before making a decision.

In summary, continue with your disciplined approach to investing, consider adding ELSS funds to your portfolio, and review your investments periodically to ensure they align with your financial goals and risk tolerance.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in