Need Expert Advice?Our Gurus Can Help

Ramalingam Kalirajan |2636 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on May 07, 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 Anurag on Apr 20, 2024Hindi

As a start of my career , I am investing 10k in Axis small cap fund , 8k in ICICI nifty 50 , 5k in quant tax saving fund . Is it good mix? What is your thought on this

Ans: Your investment approach demonstrates a well-diversified portfolio across different mutual fund categories, which is a positive step, especially for someone starting their investment journey. Here are some thoughts on your investment mix:
1. Axis Small Cap Fund: Investing in a small-cap fund like Axis Small Cap Fund can offer the potential for higher returns over the long term, as small-cap stocks tend to outperform over extended periods. However, they also come with higher volatility and risk. Since you're starting your career, having exposure to small-cap stocks can be beneficial for long-term wealth creation, provided you have a high-risk tolerance.
2. ICICI Nifty 50 Index Fund: Investing in an index fund like ICICI Nifty 50 Index Fund provides exposure to the top 50 large-cap stocks in India. It offers diversification and stability to your portfolio while tracking the performance of the Nifty 50 index. Index funds are known for their low cost and passive investment approach, making them suitable for investors seeking stable returns over the long term.
3. Quant Tax Saving Fund: Investing in a tax-saving fund like Quant Tax Saving Fund helps you save taxes under Section 80C of the Income Tax Act while providing exposure to equities. These funds have a lock-in period of three years and primarily invest in a diversified portfolio of equity and equity-related instruments. However, tax-saving funds are subject to market risks, and returns can vary based on market conditions.
Overall, your investment mix appears well-rounded, covering small-cap, large-cap, and tax-saving categories. However, it's essential to regularly review and rebalance your portfolio based on your financial goals, risk tolerance, and market conditions.

Additionally, consider diversifying across other asset classes like debt, gold, or international funds to further spread risk and optimize returns over the long term. Consulting with a financial advisor can also provide personalized guidance based on your individual circumstances and objectives.

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.