I do a regular investment per month of Rs 8000 as SIP in mutual funds. The fund currently I am holding are: 

1. HDFC Top 100 Fund -Rs 2000
2. ICICI prudential value discovery fund -Rs 1000
3. ICICI prudential blue chip fund - Rs 1000
4. HDFC Hybrid equity fund - Rs 1000
5. SBI blue chip fund - Rs 1000
6. SBI Small cap fund - Rs 1000
7. Mirae asset large cap fund - Rs 1000

I have invested Rs 214,372 till now and my market value is Rs 230,213 which means my annual return is 8.8 per cent. Shall I continue to invest in the above fund or shall I switch to some other better fund as per your advice and what will be my capital if I continue to invest for next 7 years as my current age is 43 years and I wish to invest till my age reach 50. 

Name of the Fund	Category	RankMF Star Rating
Anoop Adhikari
1. Hdfc Top 100 Fund -Rs 2000	Equity - Large Cap Fund	4
2. Icici prudential value discovery fund -Rs 1000	Equity - Value Fund	3
3. Icici prudential blue chip fund- Rs 1000	Equity - Large Cap Fund	3
4. Hdfc Hybrid equity fund - Rs 1000	Hybrid - Aggressive Hybrid Fund	5
5. SBI blue chip fund - Rs 1000	Equity - Large Cap Fund	3
6. SBI Small cap fund - Rs 1000	Equity - Small cap Fund	3
7. Mirae asset large cap fund - Rs 1000	Equity - Large Cap Fund	4

Ans: Hello Avinash. Thank you for writing to me. You can continue to invest these funds.

Ans: CHANGE

Ans: Assessment of Your Current Mutual Fund Portfolio
You are doing a great job by investing Rs. 60,000 monthly through SIPs. Your portfolio is diversified across large-cap, mid-cap, small-cap, and thematic funds. However, there are areas where improvement is possible.

Let's review your portfolio step-by-step:

1. UTI Nifty 50 Index Fund
Analysis: Investing in index funds, like UTI Nifty 50, has become popular due to low expense ratios. However, they come with certain disadvantages. Index funds blindly track the index without flexibility. They cannot outperform the market because they follow the market. Actively managed funds have a skilled fund manager who can make decisions based on market conditions, potentially giving higher returns.

Recommendation: Consider switching from index funds to actively managed funds for better potential returns.

2. Mirae Asset Mid-Cap Fund
Analysis: Mid-cap funds offer higher growth potential compared to large-cap funds but come with higher risk. Mirae Asset is a reputable fund house with a good track record in managing mid-cap funds. The fund’s allocation is usually well-diversified, balancing risk and return.

Recommendation: Continue with this fund. Mid-cap funds are good for long-term goals like retirement and kids' education.

3. Kotak Small Cap Fund
Analysis: Small-cap funds have the potential for significant growth, but they also carry high risk. Kotak Small Cap Fund is known for its robust fund management and stock selection process. However, small-cap funds can be volatile, and it’s important to have a long investment horizon.

Recommendation: Continue with this fund but keep an eye on its performance. It’s advisable to have small-cap exposure in moderation, considering the high risk.

4. ICICI Prudential Bluechip Fund
Analysis: Bluechip funds invest in well-established companies with a strong track record. ICICI Prudential Bluechip Fund is known for its consistent performance and is a good choice for risk-averse investors. These funds provide stability to your portfolio.

Recommendation: Continue with this fund. Bluechip funds are essential for a stable and balanced portfolio.

5. HDFC Defence Fund
Analysis: HDFC Defence Fund is a thematic fund focusing on the defence sector. Thematic funds can be rewarding but also risky as they depend on the performance of a particular sector. They lack diversification and can be volatile if the sector underperforms.

Recommendation: Consider reducing your exposure to thematic funds. It's advisable to diversify into funds with broader investment mandates.

6. Motilal Oswal Nifty Micro Cap 250 Index Fund
Analysis: Micro-cap funds are the riskiest category. They invest in the smallest companies with high growth potential but also high volatility. An index fund in this category lacks the active management needed to navigate the risks of micro-cap stocks.

Recommendation: Consider switching to an actively managed small-cap or micro-cap fund. Active management can provide better stock selection and risk management.

7. Quant ELSS Tax Saver Fund
Analysis: ELSS (Equity Linked Savings Scheme) funds offer tax benefits under Section 80C. Quant ELSS is known for its aggressive investment style and can provide good returns over time. However, being a tax-saving fund, it comes with a lock-in period of 3 years.

Recommendation: Continue with this fund if you need tax-saving benefits. ELSS funds are good for long-term wealth creation and tax efficiency.

8. Zerodha Nifty Large Midcap 250 Index Fund
Analysis: This index fund tracks the Nifty Large Midcap 250 Index. Like other index funds, it lacks active management and flexibility. This can limit its ability to outperform the market.

Recommendation: Consider shifting to an actively managed large and mid-cap fund. This will allow for better stock selection and potential returns.

9. Parag Parikh Flexi Cap Fund
Analysis: Flexi-cap funds offer the flexibility to invest across market capitalizations. Parag Parikh Flexi Cap Fund is well-regarded for its balanced approach and ability to navigate different market conditions. It provides diversification and growth potential.

Recommendation: Continue with this fund. Flexi-cap funds are a good choice for long-term goals as they offer a mix of stability and growth.

General Recommendations for Your Portfolio
Diversification and Risk Management
Your portfolio is diversified across different market caps and sectors, which is good. However, consider reducing exposure to thematic funds like HDFC Defence Fund and sector-specific index funds like the Motilal Oswal Nifty Micro Cap 250 Index Fund.

Replace index funds with actively managed funds. This will allow a fund manager to make strategic decisions based on market conditions, potentially leading to better returns.

Ensure that your overall risk profile aligns with your investment goals. Small-cap and mid-cap funds are volatile and should be balanced with more stable large-cap or flexi-cap funds.

Tax Efficiency
Continue with your ELSS fund for tax-saving benefits. ELSS funds are a great way to save tax and build wealth over time.

Ensure that your investments in tax-saving instruments are optimized to fully utilize the benefits under Section 80C.

Investment Horizon
Your goals include retirement, kids' education, and buying a house. These are long-term goals, which means you can afford to take some calculated risks with your investments. However, ensure you review your portfolio periodically to make necessary adjustments.

Keep a long-term perspective and avoid frequent changes in your portfolio based on short-term market movements.

SIP Strategy
Continue with your SIPs to take advantage of rupee cost averaging. SIPs are a disciplined way of investing and help in building a substantial corpus over time.

Review your SIP amounts annually. Increase your SIP contributions as your income grows to accelerate your wealth-building process.

Monitoring and Review
Review your portfolio’s performance every 6 to 12 months. This will help you stay on track with your goals and make necessary adjustments based on market conditions and personal circumstances.

Consult with a Certified Financial Planner for regular portfolio reviews. They can provide you with professional advice tailored to your financial goals and risk profile.

Final Insights
Your current investment approach is solid, but there is always room for improvement. Moving from index funds to actively managed funds can provide better returns. Reducing exposure to thematic and micro-cap funds can manage risk better.

Keep a long-term perspective, regularly review your portfolio, and consult with a Certified Financial Planner for professional guidance. With disciplined investing and proper portfolio management, you are well on your way to achieving your financial goals.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in

Ans: Hello;
You may expect to receive a corpus of 1.06 Cr after the end of 7 years since your monthly sip investment began. Move exposure away from small cap funds to flexi and large cap funds in your portfolio.

Normally we do not recommend such heavy exposure to equity at this age but since you are still actively working it is okay but just make sure to transfer your gains into liquid or ultra short debt fund on a regular basis to protect against volatility.

Happy Investing!!

*Investments in mutual funds are subject to market risks. Please read all scheme related documents carefully before investing.