Q2. Does the Portfolio require any rebalancing?

Ans: No

Are any of the funds not performing well and should I exit and choose another one?

Give it adequate time, compare it with benchmark and peers for couple of quarters then only take any decision.

I want to start another 5000 monthly SIP preferably in small cap. Is it a good thinking? If yes, which fund from small cap should I go for?

a) Since your portfolio does not have small cap you may add 1. Kotak / SBI / Axis or UTI are decent funds.

In future, should I look for another fund when I want to increase my SIP or start increasing the amount in the existing ones, if yes, which one?

b) 1 or 3 rd is fine

Ans: Good Morning,

You have built a commendable and diversified investment portfolio at a young age. This proactive approach to investing sets a solid foundation for your future financial goals. Let’s review and assess your portfolio to ensure it aligns with your objectives.

Overview of Your Portfolio
Your portfolio includes a mix of tax-saving funds, large-cap, mid-cap, and small-cap funds, which is a balanced approach to long-term wealth creation. Here is a summary of your investments:

Mirae Asset Tax Saver: 4,500 rupees
Tata ELSS: 3,000 rupees
Parag Parikh Flexi Cap: 3,000 rupees
Mirae Asset Large & Mid Cap: 2,000 rupees
SBI Small Cap: 6,500 rupees
Axis Small Cap: 3,000 rupees
You are also doing step-up SIPs, which is an excellent strategy for increasing your investment amount over time and leveraging the power of compounding.

Assessment and Recommendations
Strengths of Your Portfolio
Diverse Fund Selection:

Your portfolio includes ELSS funds, which offer tax benefits under Section 80C.
The mix of large-cap, mid-cap, and small-cap funds provides balanced exposure across different market capitalizations.
Flexi-cap funds like Parag Parikh Flexi Cap offer flexibility to move across market caps based on market conditions.
Step-up SIPs:

Increasing your SIP amount periodically helps in combating inflation and increasing your investment corpus over time.
Areas for Improvement
Overweight in Small Caps:

You have significant exposure to small-cap funds (SBI Small Cap and Axis Small Cap). Small-cap funds can be highly volatile and risky, especially during market downturns.
Consider reducing exposure to small caps slightly to mitigate risk. Reallocate these funds to more stable large-cap or balanced funds.
ELSS Funds Allocation:

Your investment in ELSS funds (Mirae Asset Tax Saver and Tata ELSS) is good for tax saving, but ensure it aligns with your tax-saving needs.
Evaluate if the current allocation meets your Section 80C limit and adjust if necessary.
Review Fund Performance:

Regularly review the performance of each fund in your portfolio. While you have chosen reputable funds, market dynamics change, and fund performance can vary.
If any fund consistently underperforms, consider replacing it with a better-performing alternative.
Portfolio Rebalancing:

Periodically rebalance your portfolio to maintain the desired asset allocation. This ensures that your investment strategy stays aligned with your financial goals and risk tolerance.
Suggested Adjustments
Increase Allocation to Large-Cap and Balanced Funds:

Consider increasing your investment in large-cap or balanced funds. These funds tend to be more stable and less volatile compared to small-cap funds.
Maintain Diversification:

Continue diversifying across different fund types and market capitalizations to spread risk and maximize potential returns.
Monitor and Adjust Step-up SIPs:

Keep increasing your SIP amounts regularly. Ensure that the increments are sustainable and align with your income growth.
Long-Term Strategy
Stay Invested for the Long Term:

Continue your disciplined investment approach. Staying invested for the long term will help you ride out market volatility and benefit from compounding.
Regular Reviews with a Certified Financial Planner (CFP):

Schedule regular reviews with a CFP to ensure your portfolio remains aligned with your financial goals. A CFP can provide tailored advice and adjustments based on market conditions and personal circumstances.
Emergency Fund and Insurance:

Ensure you have an adequate emergency fund and proper insurance coverage. This will protect your investments from being liquidated during emergencies.
Conclusion
Your portfolio is well-diversified and positioned for growth. By making minor adjustments, increasing stability, and regularly reviewing your investments, you can continue to build wealth effectively.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: Your proactive approach to investment through Systematic Investment Plans (SIPs) reflects a commendable commitment to wealth accumulation. Let's analyze your current portfolio and determine if any rebalancing is necessary to optimize returns and manage risk effectively.

Portfolio Assessment
Your investment portfolio comprises a mix of equity mutual funds across various categories, including flexi cap, small cap, large & mid cap, and thematic portfolios. This diversified allocation reflects a prudent strategy to harness growth opportunities across different market segments.

Fund Selection Rationale
Investing in multiple small cap funds from different AMCs demonstrates a thoughtful approach to diversification.
Each fund manager brings a unique perspective and investment strategy, mitigating manager-specific risk while capitalizing on sectoral opportunities.
Cost vs. Value Analysis
Your recent investment portfolio cost of 12 lakhs has appreciated to a value of 15 lakhs, indicating favorable growth in a relatively short period.
Assess whether this growth aligns with your investment objectives and risk tolerance.
Rebalancing Considerations
Given the recent appreciation in your portfolio value, it may be prudent to evaluate the asset allocation and rebalance if necessary.
Rebalancing involves adjusting the allocation of funds to maintain the desired risk-return profile.
Review the current asset allocation and assess if it deviates significantly from your target allocation.
Risk Management
While equity investments offer the potential for high returns, they also entail higher volatility and risk.
Ensure that your portfolio is well-diversified across different market segments to mitigate concentration risk.
Regularly assess your risk tolerance and adjust your portfolio allocation accordingly.
Market Outlook
Consider the prevailing market conditions and economic outlook when making investment decisions.
Stay informed about macroeconomic indicators, corporate earnings, and regulatory changes that may impact your portfolio.
Consult with a Certified Financial Planner to gain insights into market trends and potential investment opportunities.
Regular Monitoring
Continuous monitoring of your investment portfolio is essential to track performance and identify any rebalancing opportunities.
Review the performance of individual funds periodically and assess their alignment with your investment goals.
Consult with a Certified Financial Planner to conduct comprehensive portfolio reviews and make informed decisions.
Conclusion
While your investment portfolio has experienced favorable growth, it's essential to periodically assess the need for rebalancing to maintain the desired asset allocation and manage risk effectively. Consult with a Certified Financial Planner to review your portfolio and make informed decisions aligned with your financial goals and risk tolerance.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in