I'm Investing 30,000 in SIPs - How Do I Allocate Money Across These 9 Funds?

Ans: You want to invest Rs 30,000 per month across multiple SIPs. Allocating funds efficiently is important for long-term wealth creation. Let’s evaluate your portfolio and decide the best allocation strategy.

Evaluating Your Current Portfolio
Your portfolio consists of the following categories:

Sectoral and thematic funds – Technology, consumption, infrastructure, Bharat 22
Tax-saving funds – ELSS funds
Gold and silver funds – Precious metal investments
Index funds – Passive investment approach
Each category has different risk, return potential, and diversification benefits. Let’s assess each one.

Sectoral and Thematic Funds
High-risk, high-reward investments – These funds invest in specific industries. Their performance depends on the growth of that sector.

Not suitable for large allocation – These funds are volatile and should be a small portion of your portfolio.

Recommended allocation: 15-20% of total SIP amount – Spread this amount across different sectors for better diversification.

Tax-Saving Funds (ELSS)
Helps in tax savings – Investments in these funds provide deductions under Section 80C.

Mandatory lock-in of three years – Ensure that you can stay invested for this duration.

Recommended allocation: 20-25% of total SIP amount – This depends on your tax planning needs.

Gold and Silver Funds
Acts as a hedge against inflation – Precious metals protect against economic downturns.

Volatility and long-term returns – Prices fluctuate, and returns may not always match equity funds.

Recommended allocation: 5-10% of total SIP amount – This prevents overexposure to metals.

Index Funds
Limited flexibility – These funds mirror an index and do not react to market changes.

Underperforms during volatile periods – Actively managed funds adapt better to market shifts.

Misses on alpha generation – Professional fund managers provide better stock selection.

Recommended allocation: Avoid completely – Actively managed funds are a better choice.

Optimal SIP Allocation Strategy
Based on the above evaluation, your Rs 30,000 monthly SIP can be divided as follows:

Actively managed diversified equity funds: Rs 12,000 (40%) – These funds provide long-term stability and higher growth potential.
ELSS tax-saving funds: Rs 6,000 (20%) – Helps in tax savings while investing in equity.
Sectoral and thematic funds: Rs 4,500 (15%) – Invest selectively in growing sectors.
Gold and silver funds: Rs 3,000 (10%) – Provides hedging benefits.
Infrastructure and Bharat 22 funds: Rs 4,500 (15%) – Exposure to government-driven sectors.
You can adjust these allocations based on your risk tolerance and financial goals.

Key Considerations Before Investing
Avoid overconcentration in any single theme – Too much investment in one sector increases risk.

Prioritise actively managed funds – These funds adapt to market conditions better than index funds.

Monitor performance regularly – Review your investments every six months.

Ensure diversification across sectors – A well-diversified portfolio reduces risk.

Finally
Your investment should align with your financial goals and risk appetite. A well-balanced SIP allocation improves returns and reduces volatility.

If needed, consult a Certified Financial Planner to refine your strategy further.

Best Regards,

K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment