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New to Mutual Funds: Is My Portfolio Strong Enough for a 15-Year Investment?

Ramalingam Kalirajan |9255 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Mar 10, 2025

Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more

Question by Ashiskumar on Mar 08, 2025Hindi

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I am new to this mutual fund since last 6 month.i have been doing a sip of 18k per month.. parag parikh flexicap 5k uti nifty 50 5k motilal oswal midcap 2.2k nippon small cap 1.5k quant small cap 1.5k jm flexicap 1k icici prudential fund 2k is these good.i have a plan of 15 yr investment with 10 percent step up each year..kindly opine

Ans: You have started SIP investing six months ago. Your monthly SIP is Rs 18,000 across different mutual funds. You also plan to increase investments by 10% each year. A long-term plan of 15 years is a good approach.

Strengths of Your Portfolio
You have chosen a mix of flexi-cap, mid-cap, and small-cap funds.

A 15-year investment horizon allows compounding benefits.

The 10% annual step-up increases the final corpus.

You are investing consistently, which is important for long-term success.

Areas That Need Attention
1. Too Many Funds in the Portfolio
You have seven different funds.

Some categories are overlapping, reducing diversification benefits.

A leaner portfolio can be easier to manage.

2. High Exposure to Small-Cap and Mid-Cap Funds
You have three funds in small-cap and mid-cap segments.

Small caps are high-risk, high-return investments.

Too much exposure can increase volatility.

3. Index Fund is Not the Best Choice
Index funds do not beat the market in all conditions.

Actively managed funds adjust to changing markets.

A professional fund manager can reduce downside risks.

Suggested Portfolio Improvements
1. Reduce the Number of Funds
Keep 3 to 4 well-managed funds instead of seven.

Choose one flexi-cap fund, one large-cap or multi-cap fund, and one mid/small-cap fund.

2. Balance Between Risk and Stability
Reduce exposure to too many small-cap funds.

Add a large-cap or multi-cap fund for stability.

3. Invest Through a Certified Financial Planner (CFP)
Direct funds require constant tracking.

A Certified Financial Planner (CFP) can guide investment decisions.

Investing through an MFD with CFP credentials ensures professional fund selection.

Reviewing Your Plan Regularly
Check your portfolio every year.

Rebalance if some funds underperform.

Maintain discipline and avoid emotional decisions.

Finally
Your investment strategy is good, but reducing the number of funds can improve returns. Focus on diversification, balancing risk, and expert guidance. A 15-year SIP with step-up can create wealth, but regular reviews are essential.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

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