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: 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

Ans: Your portfolio and SIP contributions demonstrate disciplined financial planning. Let’s review your current status and provide actionable recommendations to stay on track.

1. Review of Your Current Portfolio Performance
Total invested amount: Rs 15,76,159.
Current portfolio value: Rs 19,35,234.
Total returns: Rs 3,59,075 (+22.78%).
XIRR of 20.75% reflects impressive performance so far.
Your portfolio is generating excellent returns. It aligns with long-term wealth creation goals.

2. Assessing Your Goal to Achieve Rs 5 Crore
You have a 10-year horizon to create Rs 5 crore.
A disciplined Rs 1,18,000 SIP contribution is a solid start.
Assuming consistent performance, you are on track to achieve your goal.
However, fund selection, market performance, and taxation can affect final corpus.

3. Diversification and Allocation Insights
Your portfolio includes diverse categories, such as large caps, mid caps, small caps, technology funds, and international exposure.

Strengths in Your Portfolio
Good mix of growth-oriented funds like flexi cap and small-cap categories.
Exposure to international markets provides diversification benefits.
High SIP allocation ensures consistent investment.
Areas of Concern
High allocation to small-cap funds may increase portfolio volatility.
Technology funds carry sector-specific risks, especially during downturns.
Overlap between funds can lead to redundancy and reduced efficiency.
4. Disadvantages of Direct Funds
Why Relying Solely on Direct Funds May Not Be Ideal
Direct funds require active tracking and market knowledge.
Lack of expert guidance may lead to suboptimal fund choices.
Regular funds through a Certified Financial Planner provide tailored advice.
Switching to regular plans ensures professional monitoring and better goal alignment.

5. Impact of Taxation on Your Portfolio
Equity 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%.
Debt-Oriented Funds
Gains are taxed as per your income slab.
Tax implications reduce the effective corpus if not planned wisely.

6. Recommendations to Strengthen Your Portfolio
Reduce Concentration in Small-Cap Funds
Small caps are high-risk and better suited for moderate allocation.
Shift a portion to balanced or large-cap funds for stability.
Limit Sector-Specific Exposure
Technology funds are subject to cyclical risks.
Rebalance to include broader thematic or diversified funds.
Consolidate Overlapping Funds
Too many funds increase complexity and overlap.
Streamline by reducing redundant schemes.
Focus on Active Fund Management
Actively managed funds tend to outperform in dynamic markets.
Certified Financial Planners can help optimise fund selection.
7. Strategy to Achieve Rs 5 Crore
Step 1: Increase SIP Gradually
Increase SIP contribution by 5–10% annually.
Align increases with salary hikes or bonuses.
Step 2: Stick to Asset Allocation
Maintain a balance between equity and debt based on risk tolerance.
Review allocation every 12–18 months.
Step 3: Reinvest for Compounding
Reinvest gains to maximise compounding benefits.
Avoid frequent withdrawals unless necessary.
Step 4: Regular Portfolio Review
Assess performance semi-annually or annually.
Adjust based on market conditions and goal progress.
8. Emergency Fund and Insurance Coverage
Maintain 6–12 months’ expenses as an emergency fund.
Ensure adequate health and life insurance coverage.
Avoid using mutual fund corpus for emergencies.
9. Long-Term Focus for Financial Independence
Stick to your SIP plan despite market fluctuations.
Focus on disciplined investing and goal alignment.
Seek professional advice to handle market uncertainties.
Final Insights
Your portfolio is well-structured and performing well. However, some adjustments can optimise returns and reduce risks. Focus on diversification, reduce overlapping funds, and seek guidance from a Certified Financial Planner. With discipline and regular reviews, you are well on track to achieve Rs 5 crore in 10 years.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

Ans: Hello;

Your monthly sip value adds upto 1.3 L however you have claimed it to be 1.18 L. (Maybe a typo).

Existing corpus(19.35 L) and monthly sip (1.3 L) won't reach 5 Cr in 10 years.

You have two options to make it happen:

1. Increase monthly sip amount to 1.9 L.

2. Top-up current monthly SIP of 1.3 L by minimum 10% each year for 10 years.

Both ways will lead you to a corpus of 5 Cr over 10 years.

You may consider money market mutual funds for parking your funds for a 1 year horizon. Returns may be comparable to FD returns but with flexibility to withdraw anytime. They typically have low to moderate risk.

Happy Investing;
X: @mars_invest