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Nikunj

Nikunj Saraf  | Answer  |Ask -

Mutual Funds Expert - Answered on Oct 27, 2022

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
AmritPal Question by AmritPal on Oct 27, 2022Hindi
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Planning to start investment in following MFs from next month.Time Horizon 8-10 years.

Goal: To get 20%(or 33% more than nifty 50) return overall in 8-10 years, will pull out as soon as I see 20% (or 33%+ on nifty 50) in total at 8-10 years, otherwise will pull out individual MFs from 10-12years with best CAGRs achievable.

Planning to buy a house next year with a loan of 70 lakh, will clear the home loan with that money. All are direct.

1. Quant Active: 10K

2. Axis India Small Cap Nifty Index: 5k

3. Axis India Mid cap Nifty Index: 5k

4. Quant Infrastructure Fund: 3k

5. Quant Tax Fund: 3k

6. SBI Consumption opportunities: 3k

7. ICICI prudential IT Index Fund: 4k

Will add 0.5x more each month whenever NIFTY drops by 10% till the time it reaches back to peak. Would replacing Small or Mid cap Index funds with Smallcap fund Like SBI smallcap fund or Canara Robeco Small Cap fund or similar midcap funds be a better thing?

Ans: Hello AmritPal Singh. It would be advisable to invest in small cap & mid cap categories. You can start with the schemes you have chosen from the mentioned categories.

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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Nikunj

Nikunj Saraf  | Answer  |Ask -

Mutual Funds Expert - Answered on Sep 27, 2022

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Planning to start investment in following MFs from next month. Time Horizon is 8-10 years. Goal: To get 20% (or 33% more than Nifty 50) return overall in 8-10 years. Will pull out as soon as I see 20% (or 33%+ on nifty 50) in total at 8-10 years, otherwise will pull out individual MFs from 10-12years with best CAGRs achievable. Planning to buy a house next year with a loan of 70 lakh, will clear the home loan with that money. All are direct. 1. Quant Active: 10K 2. Nippon India Small Cap Nifty Index: 5k 3. Nippon India Mid cap Nifty Index: 5k 4. Quant Infrastructure Fund: 5k 5. Quant Tax Fund: 3k 6. SBI Consumption opportunities: 2.5k 7. ICICI prudential Bharat Consumption Fund :-2.5k Will double as soon as I see a 13% drop in Nifty for the time horizon mentioned and keep on doing that till the time it reaches within 3% from the top. Let me know if I need to change the funds or the funds are okay. Would replacing small or mid cap index funds with smallcap funds like SBI Smallcap Fund or Canara Robeco Small Cap fund be a better thing?
Ans: Hi Amrit, In accordance with your goals and current MF selection. I could see you have selected multiple sectoral funds which are aggressive risk & allocated proportion is more than advisable. Therefore, I suggest you concise the schemes with the amount in sectoral funds.

Furthermore, you can replace the small-cap and mid-cap index funds with small-cap funds such as SBI Small Cap Fund or Canara Robeco Small Cap Fund in order to improve your portfolio.

Additionally, you can introduce Flexi cap & mid cap categories to your selection. Diversify your portfolio with different categories and AMCs.

..Read more

Ramalingam

Ramalingam Kalirajan  |7101 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 29, 2024

Money
I do have SIP going on below MFs from 2000 rs to 10000 rs in each MF. My monthly investment is 1 lakh. Most of them are from 2015 and a few of them were added in 2022. My age is 40 and my goal is to create wealth of 10cr in the next 10 years. I believe in aggressive growth. Should I continue investing in below MFs or need to replace them with different MFs? Aditya Birla Sun Life Frontline Equity Fund - Growth Aditya Birla Sun Life MNC Fund - Regular Plan - Growth Aditya Birla Sun Life Multi-Cap Fund - Regular Plan - Growth Axis Flexi Cap Fund - Regular Plan - Growth Axis Focused 25 Fund - Regular Plan - Growth DSP Small Cap Fund - Regular Plan - Growth Franklin India Smaller Companies Fund - Growth HDFC Mid-Cap Opportunities Fund - Growth ICICI Prudential Equity & Debt Fund - Growth L&T India Value Fund - Regular Plan - Growth Mirae Asset Large Cap Fund - Regular Plan - Growth Samco Flexi Cap Fund - Regular Plan - Growth ICICI Prudential Value Discovery Fund - Growth ICICI Prudential NASDAQ 100 Index Fund Direct Growth Edelweiss Balanced Advantage Fund - Growth Kotak Small Cap Fund - Growth DSP Quant Fund - Direct - Growth
Ans: Creating Wealth with Aggressive Mutual Fund Investments
your commitment to building a substantial corpus for the future is commendable. Let’s assess your current mutual fund portfolio and explore ways to achieve your goal of Rs. 10 crore in the next 10 years.

Evaluating Your Current Portfolio
Current Mutual Fund Investments
Aditya Birla Sun Life Frontline Equity Fund - Growth
Aditya Birla Sun Life MNC Fund - Regular Plan - Growth
Aditya Birla Sun Life Multi-Cap Fund - Regular Plan - Growth
Axis Flexi Cap Fund - Regular Plan - Growth
Axis Focused 25 Fund - Regular Plan - Growth
DSP Small Cap Fund - Regular Plan - Growth
Franklin India Smaller Companies Fund - Growth
HDFC Mid-Cap Opportunities Fund - Growth
ICICI Prudential Equity & Debt Fund - Growth
L&T India Value Fund - Regular Plan - Growth
Mirae Asset Large Cap Fund - Regular Plan - Growth
Samco Flexi Cap Fund - Regular Plan - Growth
ICICI Prudential Value Discovery Fund - Growth
ICICI Prudential NASDAQ 100 Index Fund Direct Growth
Edelweiss Balanced Advantage Fund - Growth
Kotak Small Cap Fund - Growth
DSP Quant Fund - Direct - Growth
Portfolio Analysis
Diversity and Overlap
Your portfolio consists of a mix of large-cap, mid-cap, small-cap, multi-cap, and value funds. While this diversity can reduce risk, there may be significant overlap in holdings, especially in large-cap funds.

Performance Evaluation
Evaluate the performance of each fund over different time periods. Check if they consistently outperform their benchmarks and peers. This analysis helps identify underperforming funds.

Risk Assessment
Given your aggressive growth strategy, higher allocation to mid-cap and small-cap funds is suitable. However, it's crucial to balance this with some large-cap and multi-cap funds for stability.

Recommended Changes
Reducing Overlap
To reduce overlap, consider consolidating similar fund types. For example, choose one or two large-cap funds instead of multiple. This approach streamlines your portfolio.

Focus on Consistent Performers
Retain funds with a strong track record of consistent performance. Replace underperforming funds with those having better potential. This strategy enhances overall portfolio performance.

Suggested Mutual Funds
Large Cap Funds
Large-cap funds invest in well-established companies. They offer stability and moderate growth.

Mid Cap Funds
Mid-cap funds target companies with high growth potential. They balance risk and reward effectively.

Small Cap Funds
Small-cap funds invest in emerging companies. They offer high growth potential but come with higher risk.

Multi Cap Funds
Multi-cap funds diversify across market capitalizations. They offer balanced risk and reward.

Value Funds
Value funds invest in undervalued companies. They provide growth potential through capital appreciation.

Investment Strategy
Monthly Investment Plan
With a monthly investment of Rs. 1 lakh, allocate funds as follows:

Large Cap Funds: Rs. 30,000
Mid Cap Funds: Rs. 30,000
Small Cap Funds: Rs. 20,000
Multi Cap Funds: Rs. 10,000
Value Funds: Rs. 10,000
Annual Review and Rebalancing
Review your portfolio annually. Rebalance to maintain the desired allocation. This approach ensures alignment with your goals and market conditions.

Risks and Benefits of Direct Investing
Disadvantages of Direct Funds
Direct funds may have lower expense ratios. However, they require active management. Without expert guidance, you may miss market opportunities or take on unnecessary risks.

Benefits of Regular Funds
Investing through a Certified Financial Planner offers several benefits. They provide professional management, regular monitoring, and timely adjustments to your portfolio. This approach can lead to better long-term performance.

Conclusion
your dedication to achieving your financial goals is impressive. By optimizing your mutual fund portfolio and investing consistently, you can build significant wealth. Ensure you review and rebalance your investments regularly to stay on track.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |7101 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Aug 12, 2024

Money
Hlo Sir I'm Rahul 29 , wants to start investment in MF I have Made one list of investment if you can give some ideas and investment plan on it I will be investing for next 10 yr and 3000 rupes Each . 1 Large Cap - HDFC Nifty 200 Momentum 30 index and ICICI prudential nifty Large cap 250 index 2 - Flexi - Nippon India flexi cap direct growth 3 - Focussed - Axis Manufacturing fund 4 - Hybrid - Parag Parikh conservative hybrid fund direct growth 5 Mid cap - Mirae Asset Mid Cap, 6 - Small - Tata Small cap , Motilal small cap, Bandhan nifty small cap 250 index 7 - Global - ICICI prudential NASDAQ 500 Nifty This is my future plan includes max all But most are New Fund starting Please share your thoughts on it Fonr next 10 yr what's should I Change Please Sir
Ans: Rahul, at 29 years old, you’ve made a commendable start by planning for a disciplined investment strategy. Your decision to allocate Rs 3,000 each to various mutual funds over the next 10 years shows your commitment to long-term wealth creation. Let’s break down your chosen funds and assess their suitability for your goals.

Diversification and Fund Selection
You've spread your investments across various fund categories, which is a good strategy. Diversification helps reduce risk and improves your chances of achieving stable returns. However, there are some points you should consider.

Large Cap Funds
You've chosen HDFC Nifty 200 Momentum 30 Index and ICICI Prudential Nifty Large Cap 250 Index.

Actively Managed vs. Index Funds: You’ve picked index funds. While index funds have lower management fees, they simply mirror the market. This means they lack the potential to outperform the market. Actively managed large cap funds, managed by professionals, may offer better returns by selecting top-performing stocks.

Suggestion: Consider allocating a portion to an actively managed large cap fund. It might provide better returns over the long term.

Flexi Cap Fund
Nippon India Flexi Cap Direct Growth is in your portfolio.

Flexibility: Flexi cap funds are versatile. They invest in large, mid, and small cap stocks. This gives them the ability to adapt to market conditions, which is beneficial over a long-term horizon.

Potential: This fund type is a good choice for diversification. It can offer growth while adjusting to market changes. Stick with this type, but ensure you monitor its performance regularly.

Focussed Fund
You’ve chosen Axis Manufacturing Fund.

Sector-Specific Risk: Focussed funds invest in a limited number of stocks, often in specific sectors. While this can lead to high returns, it also increases risk, especially if the sector underperforms.

Suggestion: If you want to keep this fund, ensure it's a small part of your portfolio. It’s riskier than more diversified funds. Alternatively, you might consider a diversified equity fund for more balanced exposure.

Hybrid Fund
Parag Parikh Conservative Hybrid Fund Direct Growth is your choice here.

Balanced Approach: Hybrid funds invest in both equity and debt. This reduces overall risk while providing reasonable returns. A conservative hybrid fund is a safe option, especially in volatile markets.

Stability: This fund adds stability to your portfolio. Keep this as a part of your strategy, especially for a long-term plan like yours.

Mid Cap Fund
Mirae Asset Mid Cap is your selected fund.

Growth Potential: Mid cap funds invest in companies with good growth potential. They can offer higher returns than large cap funds, but with more risk.

Good Choice: This fund is a good addition for growth, especially over a 10-year horizon. Ensure it's balanced with other, less risky investments.

Small Cap Funds
You've listed Tata Small Cap, Motilal Small Cap, and Bandhan Nifty Small Cap 250 Index.

High Risk, High Reward: Small cap funds offer high growth potential but come with significant risk. They can be volatile and are usually suitable for investors with a high risk tolerance.

Overexposure Risk: You’ve allocated to three small cap funds. This might expose you to higher risk than necessary. Consider reducing the number of small cap funds to avoid overexposure.

Suggestion: Diversify by selecting one strong small cap fund, and allocate more to large or mid cap funds to balance the risk.

Global Fund
ICICI Prudential NASDAQ 500 Nifty is your choice for global exposure.

International Diversification: Global funds provide exposure to international markets, reducing dependency on the Indian market alone. This can be beneficial, especially if the global market outperforms the Indian market.

Currency Risk: Keep in mind that global funds come with currency risk. Fluctuations in currency exchange rates can impact returns.

Balanced Approach: Including one global fund in your portfolio is a good idea for diversification. However, monitor global market trends and currency risks regularly.

General Insights on Your Plan
Your investment plan covers various fund categories, offering a mix of growth and stability. However, there are some areas where adjustments might be beneficial.

Focus on Active Management: While index funds have lower costs, actively managed funds have the potential to deliver higher returns. They are managed by professionals who can adjust the portfolio based on market conditions.

Avoid Overdiversification: While diversification is good, overdiversifying, especially within the same category (like small caps), might dilute your returns and increase risk. Ensure your portfolio is balanced and not overloaded in one area.

Regular Monitoring and Rebalancing: Keep a close eye on your investments. Regularly review your portfolio, and rebalance it if needed. This ensures your investments remain aligned with your financial goals.

Seek Professional Guidance: Investing through a Certified Financial Planner offers access to expert advice. A CFP can help you select the right funds, monitor your investments, and make necessary adjustments.

Final Insights
Rahul, your plan to invest Rs 3,000 each in multiple funds for the next 10 years is a strong start toward building wealth. However, consider some tweaks to enhance your portfolio’s potential. Prioritise actively managed funds, avoid overexposure to small caps, and keep your portfolio balanced. With regular monitoring and the right strategy, you can achieve your financial goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Latest Questions
T S Khurana

T S Khurana   |197 Answers  |Ask -

Tax Expert - Answered on Nov 23, 2024

Asked by Anonymous - May 11, 2024Hindi
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Can you please suggest on capital gains as per Indian taxation laws arising in the below two queries : 1) property purchased with joint ownership, me and my wife’s name in 2015 at a cost of 64,80,000, housing improvements done for the cost of 1000000 and brokerages of 200000 paid and sold the same property at 10000000 in Dec 2023? 2) 87% of the proceeds got from the deal i.e 8700000, have been reinvested to pay 25% amount in purchasing another joint ownership property in Dec 2023, 3) I have invested in another under construction property in Nov 2023 by taking housing loan, which is on me and my wife’s name worth 1.4 cr, here the primary applicant is me only while wife is just made a Co applicant in the builder buyer agreement and also on the housing loan . So what are the LTCG tax liabilities arising from the above 3 scenarios for FY 2023-2024 and FY 2024-2025. I intend to sale off the property acquired in (2) by Dec 2024 and use that proceeds to close the housing loan for the property acquired in (3), will this sale of property be inviting any tax liabilities if the complete proceeds received from the sale of the property in (2) would be utilised to close the housing loan taken in Nov 2023 for the property in (3) ? Since in FY 23-24, I would be claiming the LTCG from the sale proceeds of 1) invested in the purchase of property in 2), and I intend to sale off this property in Dec 2024, will the LTCG claim be forfeited on the property sale in (1), should I hold this property at least for further 1 year so that sale of this property in 2) will not invite STCG?
Ans: (A). Let's first talk about F/Y 2023-24 :
You jointly sold a Property during the year for Rs.76.80 lakhs (64.80+10.00+2.00), & sold the same for Rs.100.00 lakhs.
You have jointly also purchased Property No.3 (I suppose it is Residential only), for Rs.140.00 lakhs.
You should avail exemption u/s-54 & file your ITR accordingly. Please disclose all details about sale & purchase in your ITR.
02. Now coming to the F/Y 2024-25 :
You intend to Sell Property No.2, which was acquired in 2023-24. Any Gain on Sale of it would be Short Term capital Gains & taxed accordingly.
Alternatively, you may hold this sale of property no.2 (for 2 years from its purchase) & avoid STCG
You are free to utilize the sale proceeds in a way you like, including paying off your housing Loan.
Please note to avail exemption u/s 54 only from investment in property no.3 & not 2.
Most welcome for any further clarifications. Thanks.

...Read more

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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