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Ramalingam

Ramalingam Kalirajan  |7758 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 30, 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
rudolf Question by rudolf on Sep 20, 2023Hindi
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Thank you Dev, for considering my previous question, Dev. i have one more inquiry. This pertains to my long-term investment portfolio, which I've been managing since 2018. Previously, I was using a broker's services, but I've since transitioned to direct funds, I have allocated approximately 19.5 lakhs into the following mutual funds through a systematic investment plan (SIP) over the course of 5 years (starting in 2018-Dec). As of the current date, the total corpus stands at around Rs. 28.4 lakhs, with an XIRR of 15.4%. I have been investing in these funds through a broker and this i have stopped now and now doing it direct mutual funds . My intention is to leave the previous one untouched for another 5 years, using them to finance the construction of my house. Could you please confirm whether I should make any adjustments to this investment if I choose to maintain the status ? What could be the approximate corpus can i assume in next 5 years for it ? below are the funds, where i have invested which shows current XIRR against each with overall XIRR 15.4% Axis Bluechip Reg-G 9.8% ICICI Pru Bluechip Reg-G 19.6% SBI Bluechip Reg-G 16.1% Axis Focused 25 Reg-G 13.4% Axis Midcap Reg-G 19.0% DSP US Flexible Eqt Reg-G 10.6% ICICI Pru Tech Reg-G 24.5% Kotak Flexicap Reg-G 17.2% Mirae Asset Emrgng Bluechip Reg-G 21.5% PGIM Ind Flexi Cap Reg-G 14.1% Out of total 19 .75 lakh invested, this is breakdown of Categorization Large-cap Rs. 8 lakh Mid-Cap Rs. 1.9 lakh Mid&large-cap Rs. 1.35lakh Flexi-Cap is 5.31 lakh International is 1 lakh IT-sector : 2 lakh

Ans: It's essential to acknowledge your decision to transition to direct mutual funds. However, direct mutual funds require more active management and may not offer the same level of handholding as investments made through a broker. Given the importance of your long-term investment portfolio, it might be worth considering whether the potential benefits of lower expense ratios outweigh the need for professional guidance and advice.

Regarding your current investment allocation, maintaining the status quo may seem reasonable, especially with an XIRR of 15.4%. However, it's crucial to reassess your portfolio periodically and ensure it aligns with your financial goals and risk tolerance.

As for the potential corpus in the next five years, historical performance suggests it could grow to around Rs. 56 lakhs, assuming a similar XIRR. Nevertheless, market conditions can change, and actual returns may differ from projections. Regular monitoring and adjustments to your portfolio may be necessary to stay on track with your objectives.

Consider seeking advice from a certified financial planner who can offer personalized guidance tailored to your specific circumstances and goals. They can help you navigate the complexities of investing and make informed decisions to optimize your portfolio's performance.
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.
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Ramalingam

Ramalingam Kalirajan  |7758 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 23, 2024

Asked by Anonymous - Jul 16, 2024Hindi
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I am 47yrs, married and have a kid aged 15yrs, i am having exposure to Mutual fund as below ; Investment value as on date is : Rs.629968.00 Gain/Loss : Rs.222677.00 Total portfolio value : Rs.852645.00 (Breakup given below of the holdings) On going SIP monthly : ICICI Pru Tachnology-G Rs.1000 Parag Parikh Flexi Cap Reg -G Rs.3000 One time Lumpsum Invested : Parag Parikh Flexi Cap Reg -G : 65000 ICICI Pru Bharat 22 FOF -G : 80000 Motilal Oswal Mid Cap Reg -G : 70000 Franklin India Focused Equity -G : 60000 (Matured and still holding) Canara Robeco Small Cap Reg-G : 75000 ICICI Pru Equity FOF-G : 70000 ICICI Pru Technoloigy -G : 65000 (Matured and still holding) ICICI Pru Balanced Advantage -G : 50000 (Matured and still holding) ICICI Pru MediumTerm Bond -G : 35000 (Matured and still holding) As i have don't have any fixed income, could not continue with the major SIP'S, but as an when i get lumpsum i add on to the funds and i am ony carrying on with monthly SIP of Rs.4000 as mentioned above. Can you please advice about my portfolio as to what will be the corpus by 2034 ( after 10yrs from now)
Ans: Assessment of Current Portfolio
Your current mutual fund portfolio is well-diversified. It includes technology, flexi cap, mid cap, small cap, and balanced funds. Here’s a detailed assessment:

Mutual Fund Investments
ICICI Pru Technology Fund: Monthly SIP of Rs. 1000. This fund focuses on the technology sector. It can offer high growth but comes with sector-specific risks.

Parag Parikh Flexi Cap Fund: Monthly SIP of Rs. 3000 and a lump sum of Rs. 65000. This fund is diversified across large, mid, and small caps. It aims to achieve long-term growth.

ICICI Pru Bharat 22 FOF: Lump sum of Rs. 80000. This fund invests in the Bharat 22 Index, focusing on diversified sectors.

Motilal Oswal Mid Cap Fund: Lump sum of Rs. 70000. Mid cap funds can offer high returns but are more volatile than large cap funds.

Franklin India Focused Equity Fund: Lump sum of Rs. 60000. This matured fund is still held, focusing on a limited number of stocks.

Canara Robeco Small Cap Fund: Lump sum of Rs. 75000. Small cap funds have high growth potential but are very volatile.

ICICI Pru Equity FOF: Lump sum of Rs. 70000. This fund invests in other equity funds, offering diversified equity exposure.

ICICI Pru Balanced Advantage Fund: Lump sum of Rs. 50000. This fund balances between equity and debt, offering stability.

ICICI Pru Medium Term Bond Fund: Lump sum of Rs. 35000. This fund focuses on medium-term debt securities, providing steady returns with lower risk.

Portfolio Growth Potential
Current Portfolio Value: Rs. 8,52,645.

Gain/Loss: Rs. 2,22,677.

Strategic Recommendations
Increase Equity Exposure
Focus on Growth: Continue investing in equity mutual funds. They offer high growth potential over the long term.

Balanced Approach: Maintain a balance between large, mid, and small cap funds.

Reduce Sector-Specific Risk
Diversify Further: Avoid concentrating too much in one sector like technology. Spread investments across various sectors.
Regular Investments
SIPs and Lumpsums: Continue SIPs as much as possible. Invest lump sums when you receive them.

Consistency: Consistent investments help in rupee cost averaging and compounding.

Avoid Index Funds
Disadvantages: Index funds follow the market passively. They lack active management and can’t outperform the market.

Active Management Benefits: Actively managed funds have professional managers. They aim for higher returns by adapting to market conditions.

Drawbacks of Direct Funds
No Advisory Support: Direct funds lack guidance from certified planners. Regular funds offer professional advice.

Complex Management: Managing direct investments requires market knowledge. Regular funds managed by CFPs are more suitable.

Financial Goals and Liquidity
Goal Alignment
Long-Term Goals: Align your investments with your long-term goals. Focus on creating a corpus for your child’s education and your retirement.
Emergency Fund
Maintain Liquidity: Keep an emergency fund for unforeseen expenses. This should cover at least six months of expenses.
Health and Life Insurance
Personal Mediclaim
Buy Health Insurance: Purchase a personal health insurance policy. Ensure it covers critical illnesses and hospitalisation.
Life Insurance
Adequate Coverage: Ensure your term plan coverage is sufficient. This should meet your family’s needs in case of any eventuality.
Final Insights
Your portfolio is well-diversified and shows good growth potential. Focus on equity mutual funds for long-term growth. Avoid index and direct funds. Maintain consistency in SIPs and invest lumpsum amounts when possible. Align investments with long-term goals and ensure adequate insurance coverage.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

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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.

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