As per my asset allocation, I have invested in debt funds. Now I understand that it will give me a meagre return due to rate hikes. 

My investment is in:

ABSL Short duration fund

HDFC Short duration fund

ICICI Corporate Bond Fund

ABSL Liquid Fund

What is the way out for me? Should I exit?

Ans:

Ans: These are fine schemes for debt portfolio for 2 -3 years, however better suited would have been Debt – Short Duration funds designed for 1 to 3 years.

Ans: Continue with 4, 5, 6, 9 and 10

Ans: You are stepping up your SIPs every six months, which is excellent. Here's a look at your current portfolio:

Quant Small Cap Fund: Rs. 2,000
Nippon India Small Cap Fund: Rs. 2,000
Motilal Oswal Midcap Fund: Rs. 1,500
Nippon India Large Cap Fund: Rs. 1,500
Parag Parikh Flexi Cap Fund: Rs. 2,000
Nippon India IT Index Fund: Rs. 1,000
Portfolio Assessment
1. Diversification:

Your portfolio is well-diversified across small, mid, and large-cap funds. This is good for risk management.

2. IT Index Fund:

IT sector-specific funds can be volatile. Consider exiting the IT index fund. Redirect this amount to a more diversified or balanced fund.

Adding Debt Funds
1. Stability:

Debt funds provide stability to your portfolio. They are less volatile compared to equity funds.

2. Recommended Debt Funds:

Choose debt funds with a good track record and lower expense ratio. Look for funds investing in high-quality debt securities.

Final Suggestions
1. Exit IT Index Fund:

Reallocate the Rs. 1,000 from the IT index fund to a debt fund.

2. Add a Debt Fund:

Invest Rs. 1,000 in a suitable debt fund to balance your portfolio.

3. Continue Stepping Up SIPs:

Your strategy of stepping up SIPs every six months is commendable. It will help you reach your financial goals faster.


Your diversified approach is good, but exiting the IT index fund for a debt fund will add stability. Keep stepping up your SIPs and monitor your portfolio regularly for the best results.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in