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Nikunj

Nikunj Saraf  |308 Answers  |Ask -

Mutual Funds Expert - Answered on Mar 18, 2023

Nikunj Saraf has more than five years of experience in financial markets and offers advice about mutual funds. He is vice president at Choice Wealth, a financial institution that offers broking, insurance, loans and government advisory services. Saraf, who is a member of the Institute Of Chartered Accountants of India, has a strong base in financial markets and wealth management.... more
JASKARAN Question by JASKARAN on Mar 02, 2023Hindi
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Hi Nikunj. I am 39 years working professional and currently investing in following mutual funds :- 1. HDFC Mid-Cap Opp. Fund (Growth)- Rs.12000/- month. 2. HDFC Capital Builder Value Fund (Regular)- Rs.12000/- month 3. SBI Blue Chip Fund - Rs.2000/- month 4. Parag Parikh Flexi Cap Fund (Regular)- Rs.2000/- month 5. HDFC Balance Advantage Fund (Regular)- Rs.5000/- month. Please give your opinion whether my portfolio is good for long term goals or some change is required. Thanks in advance.

Ans: Hi Jaskaran. Your current investment portfolio shows that 80% of your investments are in one AMC i.e. HDFC. Hence, I would suggest that AMC-wise diversification is required in your portfolio. In addition, I recommend you to add large & mid , and small cap categories in your future investments with proper allocations.
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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Ramalingam

Ramalingam Kalirajan  |8862 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 09, 2024

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Hi Experts! I am 36 years old, married 1 year ago. I have Rs.223000 invested in Mutual Fund. Per Month 10k in Parag Parikh Flexi Cap Fund, Rs.1250 in DSP ELSS Tax Saver Fund Direct Growth, Rs.1000 in Kotak ELSS Tax Saver Fund Direct Growth, PGIM India Tax Saver Fund Direct Growth, Rs.2000 in Nippon India Small Cap Fund Direct Growth, Rs.2000 in Quant Multi Asset Fund Direct Growth and Rs.2000 in ICICI Prudential BHARAT 22 FDF Direct Growth. Apart from this I pay Rs.10k/month in PPF and 1.5 lac/year in SBI Life Insurance. Please let me know if this is a good portfolio or should I modify anything in this. What kind of Future return I will be expecting here with this portfolio.
Ans: Congratulations on your recent marriage and your proactive approach towards financial planning. It's evident that you're committed to securing your financial future.

Your investment portfolio reflects a diversified approach, which is a positive sign. Diversification helps spread risk and can enhance long-term returns. Let's delve into your portfolio to assess its effectiveness and potential for future returns.

Investing in Parag Parikh Flexi Cap Fund offers exposure to a diversified portfolio across various sectors and market capitalizations. This fund's flexible investment strategy allows it to capitalize on emerging opportunities, potentially leading to attractive returns over time.

ELSS Tax Saver Funds like DSP and Kotak offer tax benefits under Section 80C of the Income Tax Act while providing exposure to equities. These funds have a lock-in period of three years, aligning with your long-term investment horizon.

Nippon India Small Cap Fund and Quant Multi Asset Fund offer exposure to smaller companies and multiple asset classes, respectively. Small-cap funds have the potential for higher growth but come with increased volatility. Ensure they align with your risk tolerance.

ICICI Prudential BHARAT 22 FDF provides exposure to a diversified basket of public sector enterprises and select private sector companies. This fund can add stability to your portfolio while offering growth potential.

Your investments in PPF and SBI Life Insurance contribute to your overall financial security and tax planning. PPF offers stable returns with tax benefits, while life insurance provides protection for your family's future financial needs.

Considering your age and investment horizon, this portfolio has the potential to generate attractive returns over the long term. However, periodically review and rebalance your portfolio to ensure alignment with your financial goals and risk tolerance.

For a more comprehensive analysis and personalized advice, consider consulting a Certified Financial Planner who can tailor recommendations to your specific needs and objectives.

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

..Read more

Ramalingam

Ramalingam Kalirajan  |8862 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 19, 2024

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Hi sir,my name is babu ,my age is 33 years. Please review my mutual fund portflio and i am keeping mf portflio for 15 years for retirement corpus. Lumpsum: 1.quant flexi cap fund-1 lakh 2.parag parikh flexi cap fund- 1.2 lakh 3.icici prudential equity and debt fund-50 k 4.quant large and midcap fund-1lakh 5.icici prudential blue chip- 1 lakh 6.edelweiss mid cap fund-1 lakh 7.icici prudential nifty next 50 index- 1lakh Sip: 1.motilal oswal nifty midcap 150 index-4500 2.motilal oswal nifty small cap 150 index-3500 3.HDFC S&P BSE 500 INDEX-2000 4.parag parikh flexi cap-2500 5.icici prudential blue chip-2000 6.hdfc nifty 50 index plan-2500 7.icici prudential nifty 50 index-3000 As i am keepimg mf's for my future goals,i want to take minimal risk. Please review my portfolio and suggest.
Ans: Hello Babu,

Firstly, congratulations on your thoughtful approach to building your mutual fund portfolio. You have a good mix of lump sum investments and SIPs, which is crucial for a well-rounded investment strategy.

Lump Sum Investments
Your lump sum investments are diversified across different categories, which is excellent for risk management. Let’s look at each fund:

Quant Flexi Cap Fund: This fund is versatile and can invest across market capitalizations.

Parag Parikh Flexi Cap Fund: Known for its value investing approach, it includes international stocks for additional diversification.

ICICI Prudential Equity and Debt Fund: This hybrid fund balances equity and debt, offering stability and growth.

Quant Large and Midcap Fund: Invests in large and mid-cap stocks, aiming for a balance of stability and growth.

ICICI Prudential Blue Chip Fund: Focuses on large-cap stocks, providing stability.

Edelweiss Mid Cap Fund: Targets mid-cap stocks, which have the potential for higher growth but come with higher risk.

ICICI Prudential Nifty Next 50 Index Fund: Tracks the Nifty Next 50 index, which can offer growth from emerging large-cap companies.

Systematic Investment Plans (SIPs)
Your SIPs also cover a range of index and active funds. Here’s an evaluation:

Motilal Oswal Nifty Midcap 150 Index Fund: Mid-cap index funds can be volatile but offer high growth potential.

Motilal Oswal Nifty Small Cap 150 Index Fund: Small-cap index funds have even higher growth potential with higher risk.

HDFC S&P BSE 500 Index Fund: A broad market index fund that offers comprehensive market exposure.

Parag Parikh Flexi Cap Fund: Continues to provide diversification and international exposure.

ICICI Prudential Blue Chip Fund: Consistent performer among large-cap funds.

HDFC Nifty 50 Index Plan: Tracks the Nifty 50 index, providing exposure to the top 50 companies.

ICICI Prudential Nifty 50 Index Fund: Another Nifty 50 tracker, providing redundancy in your portfolio.

Disadvantages of Index Funds
While index funds provide low-cost market exposure, they have some limitations compared to actively managed funds:

No Active Management: Index funds simply replicate the index and cannot react to market changes or economic shifts.

No Outperformance: They are designed to match the index performance, not exceed it. Actively managed funds aim to outperform the index.

Limited Flexibility: Index funds must follow the index composition, even if some stocks perform poorly.

Benefits of Actively Managed Funds
Actively managed funds, on the other hand, offer several benefits:

Professional Management: Fund managers make strategic decisions to outperform the market.

Dynamic Allocation: They can adjust the portfolio based on market conditions, potentially reducing risk.

Selective Investments: Fund managers can choose high-potential stocks, avoiding underperformers.

Recommendations
To minimize risk while aiming for growth, consider these adjustments:

Reduce Overlap in Index Funds: You have multiple funds tracking similar indices (Nifty 50). Consider reducing redundancy to simplify your portfolio.

Increase Allocation to Hybrid Funds: Hybrid funds offer a balanced approach, combining equity and debt for stability.

Focus on Quality Active Funds: Include more actively managed funds with a proven track record of consistent performance.

Conclusion
Your portfolio is well-diversified, but some adjustments can enhance its effectiveness. Reducing overlap and focusing more on active management can align with your goal of minimal risk and stable growth.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ulhas

Ulhas Joshi  | Answer  |Ask -

Mutual Fund Expert - Answered on Aug 13, 2024

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My name is Ravi Verma, and I'm a 37-year-old investor. I have been investing in the following mutual funds for the past year, with a monthly investment amount ranging between 60k-90k. I plan to continue these investments for the next 9 years, aiming to reach a goal of 1 crore+. Could you please review my portfolio and advise if any changes are required or if it's good to continue as is? Current SIPs (?8k-10k per month each): HSBC Small Cap Fund - Direct Plan - Growth Aditya Birla Sun Life PSU Equity Fund - Direct Plan - Growth HDFC Small Cap Fund - Direct Plan - Growth Quant Small Cap Fund - Direct Plan - Growth HDFC Balanced Advantage Fund - Direct Plan - Growth SBI Contra Fund - Direct Plan - Growth Nippon India Growth Fund - Direct Plan - Growth Quant ELSS Tax Saver Fund - Direct Plan - Growth HDFC Retirement Savings Fund - Equity - Direct Plan - Growth Equity - Index Fund: Tata Nifty Midcap 150 Momentum 50 Index Fund - Direct Plan - IDCW Groww Nifty Smallcap 250 Index Fund - Direct Plan - Growth Quant Multi Asset Fund - Direct Plan - Growth I don't have much knowledge in mutual funds; I chose these based on their past returns. I'm concerned about whether I'm on the right track or if any adjustments are necessary. Thank you for your guidance. Best regards, Ravi Verma
Ans: Hello Ravi & thanks for writing to me.

I see too many funds in your portfolio, which I believe can dilute your returns.

Given your age & objective, you may want to reconsider your investments in the Balanced Advantage Funds & Multi Asset Funds & instead start allocating to a multi cap fund.

I also notice investments in a PSU Equity Fund. While the PSU funds have given good returns recently, as thematic funds, you must not have a large chunk of your portfolio in them. Investing in thematic funds can generate alpha but thematic funds can also underperform.

If you can provide a percentage breakup of the investments, I may make other recommendations.

..Read more

Ramalingam

Ramalingam Kalirajan  |8862 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Feb 04, 2025

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Hello Sir/Ma'am, I hope you are doing good. I am currently 29 years old and i have started investing in mutual funds from December 2024. I am currently investing Rs. 30000/- every month with an annual stepup of 10%. My investment period is for 30 years. My current portfolio as follows: Flexi Cap Fund: 1. Parag parikh flexi cap fund direct growth - (Rs. 5550/-). 2. Nippon India Nifty 500 momentum 50 index fund direct growth - (Rs. 6000/-). MIDCAP FUND : 1. Kotak Nifty midcap 150 momentum 50 index fund direct growth - (Rs. 7400/-). SMALL CAP FUND : 1. TATA SMALLCAP FUND direct growth - (Rs. 3500/-). 2. Mirae assets nifty smallcap 250 momentum quality 100 index fund fof direct growth - (Rs. 5920/-). LARGE CAP FUND : 1. KOTAK NIFTY NEXT 50 INDEX FUND direct growth - (Rs. 1630/-). Could you please suggest me how is my portfolio at the moment and i would be thankful if you suggest me any changes required. Thank you.
Ans: Your investment approach is structured and disciplined. You are consistently investing and planning for long-term growth. However, some refinements can enhance your portfolio’s efficiency.

Here is a detailed evaluation of your portfolio, highlighting strengths, risks, and areas for improvement.

Positive Aspects of Your Portfolio
Consistent Investments

You are investing Rs. 30,000 per month, which is substantial.
A 10% step-up ensures growth in investment over time.
Long Investment Horizon

A 30-year investment horizon allows compounding to work effectively.
Diversification Across Market Caps

Your portfolio includes large-cap, mid-cap, small-cap, and flexi-cap funds.
This diversification reduces risk and enhances return potential.
Growth-Oriented Approach

Your funds focus on long-term capital appreciation.
Small-cap and mid-cap funds bring high-growth opportunities.
No Sectoral or Thematic Overexposure

You are not overly exposed to any single sector or theme.
This ensures a balanced risk-reward ratio.
Concerns and Areas for Improvement
Over-Reliance on Index Funds
Index funds follow a passive approach and lack active fund management benefits.
Actively managed funds can outperform index funds, especially in small-cap and mid-cap categories.
Index funds do not protect against market downturns like active funds.
You have multiple index-based investments, which may limit your upside potential.
Higher Small-Cap and Mid-Cap Allocation
Small-cap and mid-cap funds are volatile.
These funds can give high returns but can also see sharp declines.
Your current allocation may lead to higher portfolio fluctuations.
Direct Plan Disadvantages
Direct plans do not provide professional fund selection and rebalancing.
A Certified Financial Planner (CFP) or Mutual Fund Distributor (MFD) can help optimise your portfolio.
Regular plans come with advisor expertise, which helps in long-term wealth creation.
Recommended Portfolio Adjustments
Reduce Index Fund Exposure
Replace index funds with actively managed funds for better performance.
Active fund managers adjust portfolios based on market trends, offering downside protection.
Choose funds with a strong track record of risk-adjusted returns.
Rebalance Small-Cap and Mid-Cap Allocation
Reduce small-cap exposure slightly to manage risk.
Increase flexi-cap or large-cap allocation for stability.
Balanced exposure to all market caps will create a steady portfolio.
Shift to Regular Plans for Professional Guidance
Direct funds lack expert monitoring.
A Certified Financial Planner can provide insights into market cycles.
Portfolio rebalancing and allocation adjustments will be handled professionally.
Where to Invest the Adjusted Amount
Increase Flexi-Cap Fund Allocation

A flexi-cap fund offers exposure across all market caps.
This reduces overexposure to small-cap and mid-cap.
Consider Large & Mid-Cap Funds

These funds balance growth and stability.
They provide higher returns than large-cap funds while being less volatile than small-cap.
Include Hybrid Funds for Stability

A balanced advantage fund or a dynamic asset allocation fund reduces volatility.
These funds adjust equity-debt allocation dynamically.
Add a Conservative Debt Fund

This provides stability and liquidity.
You can use it for short-term needs or rebalancing.
Final Insights
Your investment strategy is strong and goal-oriented.
Minor adjustments can improve returns and reduce risk.
Reduce index funds and switch to actively managed funds.
Diversify better between large-cap, mid-cap, and small-cap.
Shift from direct to regular plans for professional management.
A well-balanced portfolio will create long-term wealth while managing risk.
If you need further guidance, professional portfolio restructuring can help.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

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

..Read more

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DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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