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Ramalingam Kalirajan |6240 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on May 28, 2024

Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more

Question by Ravi on May 28, 2024Hindi

I have SBI contra, focused equity,psu fund, long term equity, gold fund, health care, banking & financial fund , multi asset allocation fund available. Each fund all are between 50000 to 100000. Can I keep these funds or any fund can I sale. Not urgent for amount

Ans: Assessing and Optimising Your Mutual Fund Portfolio
You have a diverse set of mutual funds: SBI Contra, Focused Equity, PSU Fund, Long Term Equity, Gold Fund, Health Care, Banking & Financial Fund, and Multi Asset Allocation Fund. Each fund holds between Rs 50,000 to Rs 1,00,000. Let’s evaluate if any changes are necessary for your portfolio.

Evaluating Current Portfolio
SBI Contra Fund
Contra funds invest in undervalued stocks. They aim for high returns when the market corrects itself. This can be beneficial, but it comes with higher risk.

SBI Focused Equity Fund
Focused funds invest in a limited number of stocks. They aim to generate high returns by concentrating investments in select companies. This can result in higher volatility.

SBI PSU Fund
PSU funds invest in public sector companies. They often provide stable returns but may lag during high-growth phases of private sector companies.

SBI Long Term Equity Fund
Long-term equity funds focus on capital appreciation over an extended period. They are suitable for wealth creation if held for a long duration.

SBI Gold Fund
Gold funds offer returns linked to gold prices. They are good for hedging against inflation and economic downturns.

SBI Health Care Fund
Sectoral funds like health care invest in specific sectors. They can be highly rewarding but also risky due to sector-specific volatility.

SBI Banking & Financial Fund
Banking & financial funds focus on the financial sector. They can offer good returns, especially when the sector performs well.

SBI Multi Asset Allocation Fund
Multi-asset allocation funds diversify across various asset classes like equity, debt, and gold. They aim to reduce risk while providing stable returns.

Assessing Portfolio Balance
Diversification
Your portfolio is diversified across sectors and asset classes. This is positive as it spreads risk.

Risk Tolerance
Evaluate your risk tolerance. Sectoral and contra funds are high-risk. If you prefer stability, consider reducing exposure to these funds.

Investment Goals
Align your portfolio with your financial goals. If you aim for steady growth with moderate risk, a balanced approach is necessary.

Recommendations
Retain
Multi Asset Allocation Fund: Provides balanced exposure and reduces risk.
Long Term Equity Fund: Good for long-term wealth creation.
Review
Focused Equity Fund: Assess if the concentration risk aligns with your goals.
Health Care and Banking & Financial Funds: Retain only if you have high conviction in these sectors.
Consider Reducing
Contra Fund: High risk and volatility. If risk-averse, reduce exposure.
PSU Fund: May underperform in high-growth markets. Consider reducing if you seek higher returns.
Gold Fund: Keep for hedging, but avoid overexposure.
Optimizing Portfolio
Regular Review
Regularly review your portfolio to ensure it aligns with market conditions and your financial goals.

Rebalancing
Rebalance your portfolio periodically. This helps in maintaining the desired asset allocation and managing risk.

Professional Guidance
Consult a Certified Financial Planner (CFP) for personalized advice. They can help optimize your portfolio based on your specific needs and market trends.

Conclusion
Your mutual fund portfolio is diversified, which is good. However, ensure it aligns with your risk tolerance and investment goals. Regular reviews and rebalancing are crucial for maintaining a balanced and growth-oriented portfolio.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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