Home > Money > Question
Need Expert Advice?Our Gurus Can Help

Worried about Negative SIP XIRR? Should I Invest More or Do Something Else?

Ramalingam

Ramalingam Kalirajan  |9407 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jan 22, 2025

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
Asked by Anonymous - Jan 15, 2025Hindi
Listen

I have seen Negative XIRR in SIP right now investment done in below SIP Total value - 13500 1. ICICI prudential bluechip direct Fund growth - 1500 2. Parag Parikh Flexi cap Fund direct growth - 1000 3. ICICI prudential smallcap fund direct plan growth - 300 4. Nippon India Small cap Fund direct Growth - 200 5. SBI small cap fund direct growth - 500 6. HDFC mid cap opportunities Direct plan Growth - 5000 7. Nippon India multicap fund direct growth - 5000

Ans: A negative XIRR in SIP investments is common in the short term.

Equity markets can fluctuate, impacting returns temporarily.

SIPs work best when continued over long periods, averaging out market volatility.

Analysing Your Current Portfolio
You are investing Rs. 13,500 monthly across seven funds.

Allocation includes large-cap, flexi-cap, small-cap, mid-cap, and multi-cap categories.

This diversification is good but needs alignment with long-term goals.

Insights on Specific Fund Categories
Large-Cap Funds
Large-cap funds provide stability in volatile markets.

These funds typically deliver steady returns over time.

Flexi-Cap Funds
Flexi-cap funds balance large, mid, and small caps for flexibility.

These funds adapt to changing market conditions effectively.

Small-Cap Funds
Small-cap funds are high-risk but have high return potential.

Short-term volatility is common; hold for at least 7-10 years.

Mid-Cap Funds
Mid-cap funds offer better returns than large caps but lower risk than small caps.

These funds require patience for growth.

Multi-Cap Funds
Multi-cap funds diversify across all market capitalisations.

These funds reduce dependency on a specific market segment.

Key Observations and Recommendations
Overlapping Categories
Three small-cap funds (ICICI, Nippon, SBI) increase risk.

Reduce exposure to two small-cap funds for better balance.

Portfolio Consolidation
Too many funds dilute returns and increase tracking difficulty.

Limit to 4-5 funds for focused growth.

Direct Fund Disadvantages
Direct funds lack professional guidance from certified professionals.

Regular funds through an MFD with CFP credential provide better support.

Tax Implications for Mutual Funds
Long-term capital gains (LTCG) above Rs. 1.25 lakh are taxed at 12.5%.

Short-term capital gains (STCG) are taxed at 20%.

Plan redemptions to optimise tax liability.

SIP Strategy for the Long Term
Continue SIPs for at least 7-10 years for compounding benefits.

Do not stop SIPs during market downturns; they offer better units.

Building a Balanced Portfolio
Suggested Allocation
Large-Cap: 40% for stability and consistent growth.

Mid-Cap: 20% for moderate risk and decent returns.

Small-Cap: 10% for higher growth potential.

Flexi-Cap or Multi-Cap: 30% for flexibility and balance.

Review and Monitoring
Review portfolio performance annually.

Adjust funds if consistent underperformance is noticed.

Avoid frequent changes based on short-term market movements.

Emergency Fund and Insurance
Set aside 6 months’ expenses in a liquid fund or FD.

Ensure adequate health and life insurance coverage.

Finally
Negative XIRR now is temporary; focus on long-term goals.

Diversify wisely and reduce overlapping categories.

Stay consistent and disciplined with your SIP investments.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
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.
Money

You may like to see similar questions and answers below

Ramalingam

Ramalingam Kalirajan  |9407 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 17, 2024

Listen
Money
Hii i am investing in SIP since 1 year in ICICI prudential commodities Fund direct growth Rs200 monthly, Tata digital India und direct growth Rs150 Monthly, HDFC Technology Fund direct growth Rs100 monthly, ICICI prudential Technology direct plan growth Rs100 monthly, Nippon India Pharma fund direct growth Rs300 monthly, Nippon India small cap fund direct growth Rs300 monthly, axis nifty IT index fund direct growth Rs1000 monthly, ICICI prudential bluechip fund direct growth Rs250 monthly, Aditya Birla Sun Life digital India fund direct growth Rs100 monthly, ICICI prudential NASDAQ 100index fund direct growth Rs300 monthly, HDFC transportation and logistics fund direct growth Rs200 monthly so I invested in above SIPs Total monthly i invest Rs3000 so please give me some suggestions or modifications if required
Ans: Your Current SIP Portfolio
You have been investing ?3,000 monthly across various SIPs for a year. Your chosen funds focus on technology, healthcare, commodities, and other sectors. This shows a good start towards disciplined investing.

Concentration in Technology Sector
A significant portion of your investments is in technology-focused funds. Technology funds can offer high returns but also come with high volatility.

Sector-Specific Funds
You also have investments in healthcare, commodities, and logistics funds. Sector-specific funds can be very volatile as they depend on the performance of their respective sectors.

Diversification
Your portfolio lacks diversification. Investing too much in a single sector increases risk. Diversification helps in balancing risk and returns.

Importance of Broad Market Exposure
Diversifying across different market segments reduces risk. Balanced exposure to large-cap, mid-cap, and small-cap funds is crucial. This strategy ensures you are not overly dependent on one sector's performance.

Adding Stability with Debt Funds
Including debt funds can provide stability. Debt funds offer regular returns and reduce the overall risk in your portfolio. This balance is vital for long-term growth.

Benefits of Actively Managed Funds
Actively managed funds can outperform index funds due to professional management. Fund managers actively select stocks to maximize returns. This can be advantageous, especially in volatile markets.

Disadvantages of Index Funds
Index funds mirror the market index and do not aim to outperform it. They lack flexibility in changing market conditions. Actively managed funds, on the other hand, adapt to market changes, providing better growth potential.

Direct Funds vs. Regular Funds
Direct funds have lower expense ratios but require thorough research and monitoring. Regular funds, through a Mutual Fund Distributor (MFD) with a Certified Financial Planner (CFP), offer professional guidance and management. This can be valuable for optimizing returns and managing risks effectively.

Suggested Modifications
Reduce Sector-Specific Overweight

Reduce the number of technology and sector-specific funds. This will help in balancing the portfolio and reducing sector-specific risks.

Increase Broad Market Exposure

Allocate more funds to diversified equity funds. Large-cap and multi-cap funds provide stable returns and reduce overall risk.

Include Debt Funds for Stability

Add debt or hybrid funds to your portfolio. This will provide regular returns and reduce the volatility of your overall investment.

Suggested Allocation
Technology Funds: Choose one or two funds to maintain some exposure but reduce concentration.
Broad Market Funds: Increase investment in large-cap and multi-cap funds for stable growth.
Debt Funds: Allocate a portion to debt funds for stability.
Regular Monitoring and Review
Monitor your investments regularly. Review fund performance annually and adjust your portfolio based on your financial goals and market conditions.

Conclusion
Your dedication to investing through SIPs is commendable. With a few adjustments, you can achieve a balanced and diversified portfolio. This will help you meet your long-term financial goals with reduced risk.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Latest Questions
Nayagam P

Nayagam P P  |7954 Answers  |Ask -

Career Counsellor - Answered on Jul 05, 2025

Nayagam P

Nayagam P P  |7954 Answers  |Ask -

Career Counsellor - Answered on Jul 05, 2025

Asked by Anonymous - Jul 05, 2025Hindi
Career
Idk what career path to choose ...I love aviation and being a pilot is my dream but my parents aren't allowing me to pursue any course related to aviation now ..apart from aviation I'm interested in other fields such as business,environmental..but I really wanna study aviation ...what do I do?
Ans: Choosing a career that balances passion with practicality requires examining the core skills, institutional quality, and future prospects in each field. Aviation demands strong aeronautical knowledge, excellent communication, quick decision-making, physical fitness, and situational awareness (make sure that you have all these skills); top DGCA-approved pilot training schools include Indira Gandhi Rashtriya Uran Akademi (IGRUA), Bombay Flying Club, and National Flying Training Institute, all offering modern fleets, simulators, experienced instructors, and 90–95% CPL pass-rates. Business careers require leadership, strategic thinking, quantitative analysis, communication, and adaptability; leading undergraduate BBA/BMS options are NMIMS Anil Surendra Modi School of Commerce, Christ University, and IIM Indore’s IPM, noted for NBA-accredited faculty, industry-integrated curricula, and 85–95% placement consistency. Environmental Science demands research methodology, data analysis, fieldwork, policy literacy, and sustainability mindset; premier UG programmes are at IISc Bangalore, JNU, and BHU with NAAC A+ ratings, interdisciplinary labs, mandatory internships, and 75–90% placement or postgraduate progression rates. Each discipline offers strong accreditation, faculty expertise, infrastructure, industry linkages, and placement frameworks.

Final recommendation:
To pursue your dream of becoming a pilot while addressing parental concerns, consider enrolling in a top DGCA-approved flight academy and demonstrate commitment through ground school success. As backup, prepare for top-ranked BBA programmes like NMIMS BBA, or B.Sc. Environmental Science at IISc, ensuring a versatile foundation and robust career support across fields. All the BEST for Admission & a Prosperous Future!

Follow RediffGURUS to Know More on 'Careers | Money | Health | Relationships'.

...Read more

Nayagam P

Nayagam P P  |7954 Answers  |Ask -

Career Counsellor - Answered on Jul 05, 2025

Asked by Anonymous - Jul 05, 2025Hindi
Career
Sir can I choose rvce eee over msrit ai&ml
Ans: Rashtreeya Vidyalaya College of Engineering’s B.E. in Electrical & Electronics Engineering is NBA-accredited with NAAC ‘A+’, taught by PhD-qualified faculty in advanced power-electronics, control-systems and high-voltage labs, and has maintained over 97% branch-placement consistency over the last three years. Its dedicated Centre for Competence collaborates with ARCADIS and Hitachi to offer real-world projects and internships. M.S. Ramaiah Institute of Technology’s B.E. in Artificial Intelligence & Machine Learning is NBA-accredited, led by research-active PhDs, supported by IBM and Microsoft-partnered AI/ML and big-data labs, and recorded a 95% overall placement rate in 2023 with 358 recruiters, including Google, Amazon and Capgemini. Its curriculum integrates capstone projects and industry certifications. Both institutes offer robust career-development cells, mandatory internships, and alumni networks, but RVCE excels in core-electrical infrastructure and PSU tie-ups, while MSRIT provides deeper AI specialization and broader software-industry reach.

Recommendation: Given superior core-EEE infrastructure, PSU engagement and near-100% placements, recommendation is RVCE EEE. For a focused AI/data-science trajectory with cutting-edge labs and extensive software-industry placements, choose MSRIT AI & ML. All the BEST for Admission & a Prosperous Future!

Follow RediffGURUS to Know More on 'Careers | Money | Health | Relationships'.

...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.

Close  

You haven't logged in yet. To ask a question, Please Log in below
Login

A verification OTP will be sent to this
Mobile Number / Email

Enter OTP
A 6 digit code has been sent to

Resend OTP in120seconds

Dear User, You have not registered yet. Please register by filling the fields below to get expert answers from our Gurus
Sign up

By signing up, you agree to our
Terms & Conditions and Privacy Policy

Already have an account?

Enter OTP
A 6 digit code has been sent to Mobile

Resend OTP in120seconds

x