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Samraat Jadhav  |2086 Answers  |Ask -

Stock Market Expert - Answered on Apr 17, 2024

Samraat Jadhav is the founder of Prosperity Wealth Adviser.
He is a SEBI-registered investment and research analyst and has over 18 years of experience in managing high-end portfolios.
A management graduate from XLRI-Jamshedpur, Jadhav specialises in portfolio management, investment banking, financial planning, derivatives, equities and capital markets.... more
Rakesh Question by Rakesh on Apr 12, 2024Hindi
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Hi, Can you pls review my portfolio? I have the below 4 monthly SIPs 1) 4k in Nippon India Small Cap 2) 4k in Quant mid cap 3) 5k in motilal Oswal Nifty 200 Momentum 30 4) 4k in JM flexi cap fund

Ans: All good if your vision is for 15yrs plus, plz exit JM flexi fund and invest in other good fund
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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Hi, I am 22 years old doing SIP of Rs. 16,000 per month in these following funds:- 1. Parag Parikh Flexi Cap Fund :- 4500 2. Quant Flexi Cap Fund :- 4500 3. Nippon India Large Cap Fund:- 2000 4. Motilal Oswal Mid Cap Fund:- 1500 5. Quant Mid Cap Fund:- 1500 6. Axis Small Cap Fund:- 1000 7. Bandhan Small Cap Fund:- 1000 Please do a review of my portfolio and give your suggestions. Thank you!
Ans: You have a well-diversified SIP portfolio. Investing Rs. 16,000 monthly at 22 is a commendable step. This shows your commitment to building wealth over time. Let’s review your portfolio and provide suggestions for improvement.

Current Portfolio Analysis
Your current SIP investments include:

Parag Parikh Flexi Cap Fund: Rs. 4,500

Quant Flexi Cap Fund: Rs. 4,500

Nippon India Large Cap Fund: Rs. 2,000

Motilal Oswal Mid Cap Fund: Rs. 1,500

Quant Mid Cap Fund: Rs. 1,500

Axis Small Cap Fund: Rs. 1,000

Bandhan Small Cap Fund: Rs. 1,000

Diversification and Allocation
Flexi Cap Funds
Parag Parikh Flexi Cap Fund and Quant Flexi Cap Fund:

Advantages: Flexi cap funds invest across all market capitalizations. They provide flexibility to capture growth opportunities.

Risk and Return: These funds balance risk and return by diversifying investments across large, mid, and small cap stocks.

Evaluation:

Sufficient Exposure: Investing in two flexi cap funds provides adequate exposure to diverse market segments.

Potential Overlap: Check for overlapping stocks to ensure true diversification.

Large Cap Fund
Nippon India Large Cap Fund:

Advantages: Large cap funds invest in established companies. They offer stability and lower volatility compared to mid and small cap funds.

Risk and Return: Lower risk with moderate returns. Suitable for long-term stability in the portfolio.

Evaluation:

Stability Factor: Including a large cap fund adds stability to your portfolio.

Maintain Allocation: Continue with your current allocation to ensure balance.

Mid Cap Funds
Motilal Oswal Mid Cap Fund and Quant Mid Cap Fund:

Advantages: Mid cap funds invest in growing companies. They have the potential for higher returns than large caps but with higher risk.

Risk and Return: Higher volatility with the potential for significant returns.

Evaluation:

Growth Potential: Two mid cap funds provide a good balance of growth potential.

Diversification: Ensure there is minimal overlap between the funds to maximize diversification.

Small Cap Funds
Axis Small Cap Fund and Bandhan Small Cap Fund:

Advantages: Small cap funds invest in emerging companies. They offer high growth potential but come with higher risk.

Risk and Return: High volatility with the possibility of substantial returns.

Evaluation:

Aggressive Growth: Small cap funds are suitable for aggressive growth in your portfolio.

Monitor Performance: Regularly monitor these funds due to their high volatility.

Recommendations for Improvement
Review Fund Overlaps
Diversification Check: Ensure there is minimal overlap among stocks in your flexi cap, mid cap, and small cap funds.

Balanced Exposure: Aim for a balanced exposure to different sectors and industries.

Rebalance Portfolio
Current Allocation: Your portfolio is skewed towards flexi cap funds.

Suggested Allocation: Consider increasing the allocation to large cap funds for stability. This ensures a balanced risk-return profile.

Long-Term Strategy
Stay Invested: Continue your SIPs for the long term to benefit from rupee cost averaging and compounding.

Periodic Review: Review your portfolio periodically to ensure it aligns with your financial goals.

Additional Suggestions
Emergency Fund
Liquidity: Maintain an emergency fund equivalent to 6-12 months of your expenses. This ensures liquidity for unforeseen circumstances.
Health and Term Insurance
Health Insurance: Ensure you have adequate health insurance coverage. This protects you against medical emergencies.

Term Insurance: Consider term insurance for financial security of your dependents in case of an untimely demise.

Education and Learning
Continuous Learning: Keep learning about personal finance and investments. This helps you make informed decisions.

Seek Advice: Consider consulting a Certified Financial Planner (CFP) for personalized advice tailored to your financial goals.

Conclusion
Your current SIP portfolio is well-diversified and on the right track. A balanced approach with adjustments can further optimize it. Investing in mutual funds through SIPs is a commendable strategy for wealth creation. Regularly review and rebalance your portfolio. This ensures it aligns with your financial goals and risk tolerance.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..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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