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

New investor with 7k SIP - Good fund choices for 10 years?

Ramalingam

Ramalingam Kalirajan  |6625 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 27, 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
Asked by Anonymous - Jun 12, 2024Hindi
Listen
Money

Sir, I am new and I have started investing in SIP of 7 thousand from this month: quant small cap fund direct -1000, Tata small cap fund-500, quant mid cap fund direct- 1000, Nippon India large cap-1000, UTI nifty 50 index fund - 2000, JM FLEXI cap fund direct-500, Aditya Birla sunlife psu equity-1000 Please inform me whether these funds are good and also I hv plan to keep these sips for 10 yr horizon.

Ans: Your Current Investment Portfolio

You have started investing Rs. 7,000 monthly through SIPs. This is a great step towards building your financial future. Your portfolio includes a mix of small cap, mid cap, large cap, flexi cap, index, and sectoral funds. Here’s an analysis of your choices:

Small Cap Fund: Rs. 1,500
Mid Cap Fund: Rs. 1,000
Large Cap Fund: Rs. 1,000
Index Fund: Rs. 2,000
Flexi Cap Fund: Rs. 500
Sectoral Fund: Rs. 1,000
Evaluation of Your Portfolio

1. Small Cap Funds

Small cap funds can provide high returns. However, they come with high risk. Having Rs. 1,500 in small cap funds is acceptable, but be prepared for volatility.

2. Mid Cap Fund

Mid cap funds balance risk and return. They have growth potential with moderate risk. Your Rs. 1,000 investment here is well-placed.

3. Large Cap Fund

Large cap funds are more stable. They provide steady returns. Your Rs. 1,000 investment in a large cap fund is good for stability.

4. Index Fund

Index funds track the market. However, they do not adapt to market changes. This can limit returns. Instead, consider actively managed funds for better performance.

5. Flexi Cap Fund

Flexi cap funds provide flexibility. They invest across market caps. Your Rs. 500 in a flexi cap fund is a good choice for diversification.

6. Sectoral Fund

Sectoral funds focus on specific sectors. They carry higher risk. Rs. 1,000 in a sectoral fund is fine, but keep an eye on sector performance.

Disadvantages of Index Funds

Index funds mimic the market. They do not adjust to market conditions. This can limit potential returns. Actively managed funds offer professional management. They adapt to market changes and seize opportunities.

Disadvantages of Direct Funds

Direct funds need constant monitoring. They require you to actively manage and rebalance your portfolio. This can be time-consuming. Regular funds, managed through a Certified Financial Planner (CFP), offer professional advice and management.

Benefits of Actively Managed Funds

Actively managed funds aim to outperform the market. They are managed by experts who make strategic decisions. These funds can deliver higher returns compared to index funds.

Suggestions for Additional Investments

Since you plan to keep these SIPs for a 10-year horizon, consider these additions:

1. Balanced Advantage Funds

These funds adjust the equity-debt mix. They provide growth with stability.

2. International Funds

These funds invest globally. They offer diversification beyond Indian markets.

3. Debt Funds

These funds provide stability. They are good for balancing your portfolio.

Systematic Investment Plan (SIP)

Continue with your SIP approach. It helps in disciplined investing. SIPs also average out the purchase cost, reducing market timing risk.

Review and Rebalance

Regularly review your portfolio. Ensure it aligns with your goals and risk tolerance. Make adjustments if necessary.

Consult a Certified Financial Planner

A CFP can provide tailored advice. They manage your portfolio professionally and ensure your investments are aligned with your goals.

Final Insights

Your current mutual fund investments are diversified. However, consider replacing index funds with actively managed funds. This can enhance your returns.

Diversify further with balanced advantage, international, and debt funds. Continue with SIPs and consult a CFP for professional advice.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
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  |6625 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 06, 2024

Ramalingam

Ramalingam Kalirajan  |6625 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 19, 2024

Asked by Anonymous - Jun 19, 2024Hindi
Money
Sir, I am new and I have started investing in SIP of 7 thousand from this month: quant small cap fund direct -1000, Tata small cap fund-500, quant mid cap fund direct- 1000, Nippon India large cap-1000, UTI nifty 50 index fund - 2000, JM FLEXI cap fund direct-500, Aditya Birla sunlife psu equity-1000 Please inform me whether these funds are good and also I hv plan to keep these sips for 10 yr horizon.
Ans: Let's dive into a detailed analysis and provide you with comprehensive guidance on your SIP investments for a 10-year horizon. It's great to see your initiative in starting a systematic investment plan. Here's a thorough evaluation of your investment portfolio with a focus on various aspects to help you understand the implications of your choices and make informed decisions.

Understanding Your Current Investment Portfolio
You've chosen a diverse mix of mutual funds for your SIPs, which is a good strategy. This diversity helps in spreading risk and capturing growth from different segments of the market. Let's break down your investments into categories and analyze each one:

Small Cap Funds: You've invested in two small cap funds. Small cap funds have the potential for high growth, but they also come with high volatility.

Mid Cap Funds: You've allocated funds to a mid cap fund. Mid caps strike a balance between growth potential and risk.

Large Cap Funds: You've chosen a large cap fund, which provides stability to your portfolio with lower risk compared to small and mid cap funds.

Index Funds: You've invested in an index fund, which aims to replicate the performance of the Nifty 50 index.

Flexi Cap Funds: You've invested in a flexi cap fund, which offers the flexibility to invest across market caps.

Sector-Specific Funds: You've allocated funds to a PSU equity fund. Sector-specific funds can be volatile and are often dependent on the sector's performance.

Evaluating Small Cap Funds
Small cap funds can deliver impressive returns, especially in a growing economy. However, they are highly volatile and susceptible to market fluctuations. Over a 10-year horizon, these funds can provide substantial growth if the companies perform well.

Advantages:

High growth potential.
Beneficial in a bullish market.
Disadvantages:

High volatility.
Risk of significant losses during market downturns.
Mid Cap Funds: Balancing Growth and Stability
Mid cap funds offer a balance between the high growth potential of small caps and the stability of large caps. These funds invest in mid-sized companies that have significant growth potential and are more stable than small caps.

Advantages:

Potential for good returns.
Moderate risk compared to small caps.
Disadvantages:

Can be volatile.
Requires a longer investment horizon to mitigate risks.
Large Cap Funds: Stability and Consistent Returns
Large cap funds invest in well-established companies with a solid track record. These funds provide stability to your portfolio and are less volatile compared to small and mid cap funds.

Advantages:

Lower risk and volatility.
Consistent returns over the long term.
Disadvantages:

Lower growth potential compared to small and mid caps.
Returns may be modest.
Index Funds: A Critical Analysis
You've invested in an index fund which tracks the Nifty 50. Index funds are passively managed and aim to replicate the index's performance. While they offer diversification and low expense ratios, there are some drawbacks:

Disadvantages:

Limited to the performance of the index.
Cannot outperform the market.
Lack of active management to navigate market downturns.
Benefits of Actively Managed Funds:

Potential to outperform the market.
Active management to mitigate risks.
Flexibility in changing market conditions.
Flexi Cap Funds: Versatile and Adaptive
Flexi cap funds are versatile as they can invest across different market capitalizations. This flexibility allows the fund manager to capitalize on opportunities in any segment.

Advantages:

Diversification across market caps.
Ability to adapt to market conditions.
Disadvantages:

Performance highly dependent on the fund manager's expertise.
May have higher expense ratios.
Sector-Specific Funds: Concentrated Risk
You've invested in a PSU equity fund, which focuses on public sector undertakings. Sector-specific funds can be rewarding if the sector performs well but are highly risky.

Advantages:

High returns if the sector performs well.
Targeted exposure to a specific sector.
Disadvantages:

High risk due to concentration in one sector.
Performance is sector-dependent and can be volatile.
Active vs. Direct Funds: Considerations
You've chosen direct funds, which means you invest directly with the mutual fund company without intermediaries. While this can save on commission fees, there are advantages to investing through a Certified Financial Planner (CFP):

Disadvantages of Direct Funds:

Requires thorough research and understanding.
No professional guidance in fund selection and management.
Benefits of Investing through CFP:

Expert advice and tailored investment strategies.
Regular portfolio review and adjustments.
Better understanding of market trends and opportunities.
Long-Term Investment Strategy
A 10-year investment horizon is a substantial period, allowing you to ride out market volatility and benefit from compounding returns. Here's how you can make the most of your investments:

1. Stay Consistent with SIPs:
Continue your SIPs regularly to benefit from rupee cost averaging, which helps in buying more units when prices are low and fewer when prices are high.

2. Diversify Your Portfolio:
Ensure your portfolio remains diversified across different market caps and sectors to spread risk and capture growth from various segments.

3. Review and Rebalance:
Periodically review your portfolio with a CFP to ensure it aligns with your financial goals. Rebalancing helps in maintaining the desired asset allocation.

4. Monitor Performance:
Track the performance of your funds and compare them with benchmark indices. If a fund consistently underperforms, consider switching to better-performing alternatives.

5. Focus on Financial Goals:
Align your investments with specific financial goals, such as retirement, children's education, or buying a home. This helps in maintaining discipline and focus.

Final Insights
Investing in SIPs for a 10-year horizon is a smart choice. You've diversified across different types of funds, which is commendable. However, it's crucial to regularly review your portfolio, seek expert advice, and make adjustments as needed. Stay informed about market trends and remain consistent with your investments. Your financial journey is a marathon, not a sprint. With patience and prudent decision-making, you're likely to achieve your financial goals.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in

..Read more

Latest Questions
Anu

Anu Krishna  |1201 Answers  |Ask -

Relationships Expert, Mind Coach - Answered on Oct 15, 2024

Asked by Anonymous - Oct 07, 2024Hindi
Listen
Relationship
Mam i am a 52 year ols women i have never had a secure relationship only who wanted to have s.Marriage in proposals too dint work for me. At late 40 age i met a guy it was all good till start 1 year but since 3 years we just fight my fault to as i have no family no friends and all i have to look after 2 aged parents and i am deep involved my life is just that. This relationship is good to talk on phone as all i do is talk my problems 24 by 7 365 days which i understands upsets him. But i see no effort too from him for meeting planning dates and if i do i pay for it all he never pays . I lost interest felt disappointed after going on saying he never tries to make plans talk future his family finance. I am not sure what i should do stay or live my life alone which i was always doing.
Ans: Dear Anonymous,
Start fresh and if you had a clean slate, what would you want to draw on it?
All your miseries or what you actually want from life?
When you meet someone new and you dump your set of issues on them, how exactly do you think they are going to be interested in taking you out on a date?
Your prospective life partner is not a dumping yard for your life's problems BUT a person that is going to marry you and support you and who you can trust. And will you start this relationship by actually talking only about your problems? Honestly, you need to ask yourself if you will be interested in a guy who keeps ranting about all things going wrong...
Establish a connection by being on a positive ground and showing the other person that you care and also are interested in knowing about them. This interest will let them lower their guard down and actually connect with you at an emotional level and then you can pursue this as a potential life partner association...somewhere down the line, they will be genuinely interested in being a part of your challenges and that's when you make them your strength to solve these challenges. Am I making sense to you?
Do you see how you have been sabotaging your own future? Dust yourself, become genuinely interested in people not to dump your problems on them but to make a genuine connection and watch how things change for you. Prioritize your life not your problems!

All the best!
Anu Krishna
Mind Coach|NLP Trainer|Author
Drop in: www.unfear.io
Reach me: Facebook: anukrish07/ AND LinkedIn: anukrishna-joyofserving/

...Read more

Anu

Anu Krishna  |1201 Answers  |Ask -

Relationships Expert, Mind Coach - Answered on Oct 15, 2024

Relationship
Hi, I am a 36yo guy. Married and have 2 beautiful kids. I am a naturally happy person in life and have achieved reasonable success through my hard work. From last 3 years i am in love with a married girl who works at an office near my workplace. We two believe that we are best suited for each other in every aspect i.e. mental, emotional and physical. We share a great chemistry that we never felt with our respective spouses. We decided that we both cant leave our spouses because of our kids. But very often she keeps on getting crazy and tortures and taunts me that i love my wife more and doesnt give value to her. She is mostly unhappy about this in her life and many times abuses me when she sees that i am a naturally happy and content person. I have even told her that if she wants we can take divorce from our spouses and move-in together. But she never accepts that also and keeps on making my life hard. But i do believe that we both love each other like crazy and my sexual life with her is just out of this world. I have a very high libido and she satisfies me like no other girl. My question is how can i make her sane and make her trust me that i am more inclined towards her?
Ans: Dear Avinash,
I am sure by now you realize that having parallel lives is not easy. Maybe you are at that stage where a decision must be made...
You owe at least that much to your respective spouses who have nothing to do this life of yours...

The lady in question wants the cake and wants to eat it too...obviously she needs to see that if she wants her marriage, then you are going to keep your marriage as well and with that all the insecurities that arise must also be accepted as this is something that the two of you got into willingly...did she not know that a relationship outside of marriage comes with its set of challenges like insecurities, doubts, fears, instability and more? I guess it's not about you making her sane and trust you BUT for the two fo you to come to some sort of a decision on where all this is leading?

Again, I say this...leading two lives in parallel ain't easy; especially on an emotional level!

All the best!
Anu Krishna
Mind Coach|NLP Trainer|Author
Drop in: www.unfear.io
Reach me: Facebook: anukrish07/ AND LinkedIn: anukrishna-joyofserving/

...Read more

Anu

Anu Krishna  |1201 Answers  |Ask -

Relationships Expert, Mind Coach - Answered on Oct 15, 2024

Asked by Anonymous - Oct 01, 2024
Relationship
Hi Anu, I have been reading since long the advices you give to others expecting that there can be an identical issue which i am suffering, i am 48yrs and my wife 42yrs married for 22yrs & having grown up children, over period of time my wife has become more dominating expecting me to listen and follow everything what she says, everything was going fine for until last six years when she was following me as a dutiful wife, since last 6-7yrs she is disinterested in sex also, i sit and speak with her trying to address all the issues, but things get back to ZERO within days, she has turned very short tempered and egoistic, shouting and using foul language in rage at times, we both are highly educated and give lectures at college with limited reasonable income, the problem is she compares her life to others and disturbs our life, ours is a marriage against parents so both the side relatives are little indifferent and we are not extroverts or that persons who are outgoing to change all that, we just lead our life within ourselves and try to help the relatives whenever they come to us. My question is that is it not cruel for a wife to deprive the husband of sex and develop unreasonable expectations comparing the lifestyles of others. when at peace my wife suggests that i can look outside for sex and she is ok with it but i don't believe in it and in her words, at times in rage she keeps asking for divorce uttering foul language, i keep reminding her that emotions, anger and rage shall only aggravate the issues we should know what we actually want and seek it speaking to each other, i feel that my wife doesn't know what she wants from herself or from me or from life, Anu, Is this all that pre-menopause frustrations which is building up or is it some mental issues which are surfacing due to negligence from me or our relatives? Please suggest? Thank you
Ans: Dear Anonymous,
Let's understand it in 3 ways..

1) Whether your wife is in pre-menopause or perimenopause or menopause stage can be determined only by a doctor. A lot of material floats on the internet convincing people of one over the other BUT it's important to get it validated by a doctor that will help your wife understand what is going on with her body and how it impacts her mind...

2) It is also possible that the current sex routine maybe boring to her and infusing it with some spice can get things going? So, think out of the box here...

3) Also, you might want to think if the emotional bond between the two of you has broken down; women respond to sex easier when they feel emotionally connected and safe with their man...

What will be useful in your situation is: to reconnect with her and aim to connect with her emotionally. This will help her in conveying to you what might be the problem and then it gets easier to solve it or take necessary steps...

All the best!
Anu Krishna
Mind Coach|NLP Trainer|Author
Drop in: www.unfear.io
Reach me: Facebook: anukrish07/ AND LinkedIn: anukrishna-joyofserving/

...Read more

Milind

Milind Vadjikar  |418 Answers  |Ask -

Insurance, Stocks, MF, PF Expert - Answered on Oct 15, 2024

Milind

Milind Vadjikar  |418 Answers  |Ask -

Insurance, Stocks, MF, PF Expert - Answered on Oct 15, 2024

Milind

Milind Vadjikar  |418 Answers  |Ask -

Insurance, Stocks, MF, PF Expert - Answered on Oct 15, 2024

Asked by Anonymous - Oct 15, 2024Hindi
Listen
Money
Hi Milind I am 52 years old single woman, from small town and who has worked hard ro reach to level in corporate with good salary. I have a corpus of about 5 crores and small flat in tier 2 town. I dont enjoy yhis new job wirh reputed brand and at a senior level as i dont find ut engaging or doing justice to role. My parents are old and i worry for rhem ans want to spent rkmw with them. With this corpus can i take a call to leave job and get decent income of atleast 2-2.5 lac a month. I have been quite action oriented, but now my mind and body feel exhasuted and also fear rhat without a job i will become lazy. Also living with parents will be a joy, at the same time resteictive to eating or socializing. I am quite concious ,if i leave this well paying ,senior role job with a big renonwed corporate which many of my friends aspired for and whole lot of people congratulated me ,they will think i was not able to justify my role,hence left . I dont want that impression at last stage of career as whole life i have been seen as hard working ,passionate professional. Such rhoughts are taking toll on my mental health. Please advise what should be done
Ans: Hello;

With the corpus that you have (5 Cr) you may buy an immediate annuity from a life insurance company and can expect to receive monthly payout of 2.5 L (pre tax)from the very next month. 6% annuity rate considered, if you shop around and negotiate you may get a better rate.

You can opt for increasing annuity to account for inflation and return of purchase price to your nominee, after you.

Ensure good health insurance policy to cover yourself and your parents.

Think about some vocation which you would like to pursue passionately after retirement.

You are seeking retirement from regular 9 to 5 job not from pursuit of your passion/goals.

It could be in the role of an consultant, counselor or educator.

You should take the decision which you feel is appropriate for you irrespective of what people comment because they will comment in any case.

Learn to ignore such people.

Happy Retirement!!

...Read more

Milind

Milind Vadjikar  |418 Answers  |Ask -

Insurance, Stocks, MF, PF Expert - Answered on Oct 15, 2024

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