Thank you Mr Samrat for this, I am happy that I am going in right direction, will continue with these funds. May I know what are two good funds to invest for short term? A 3-5 years time.

Ans:

Ans: You can continue with the SIPs in these funds except Nippon India Focused Equity Fund, which I suggest you to get out of. There is no requirement to introduce any other new fund in your personally managed portfolio as you are doing well with your ongoing SIPs.

You can start additional SIPs in ICICI Prudential Bluechip Fund and Canara Robeco Emerging Equities Fund with the additional amount.

Disclaimer:
• I have just no idea about your age, future financial goals, your risk profile, other investments and whether you would have the nerves to not get unduly perturbed if stock markets go temporarily down.
• Hence, please note that I am answering your question in absolute isolation to other parameters which should definitely be considered when answering a question of this type.
• I recommend you to also consult a good financial advisor who would look at your complete profile in totality before you act on this advice given by me.

Ans: Your consistent investment over the past 5 years reflects commendable financial discipline. Let's evaluate your current portfolio and suggest potential adjustments to align with your goals.

Review of Current Investments
1. Canara Rob Emerg Equities Fund:

Focus: Emerging equities.
Assessment: Offers exposure to high-growth potential companies. May be volatile but suitable for long-term growth.
2. ICICI Pru Bluechip Fund:

Focus: Bluechip companies.
Assessment: Provides stability and consistent returns. Suitable for investors seeking steady growth with lower risk.
3. Nippon India Focused Equity Fund:

Focus: Focused approach to equity investment.
Assessment: Concentrated portfolio aiming for higher returns. Requires higher risk tolerance.
4. SBI Small Cap Fund:

Focus: Small cap companies.
Assessment: High growth potential but comes with higher risk due to volatility.
5. Tata Hybrid Equity Fund:

Focus: Mix of equity and debt.
Assessment: Provides diversification and stability. Suitable for conservative investors.
Potential Adjustments
1. Reviewing Existing Funds:

Performance Check: Assess the performance of your current funds against benchmarks and peers.
Risk Assessment: Consider your risk tolerance and investment horizon when evaluating the suitability of each fund.
2. Adding New Funds:

Strategic Allocation: Consider adding funds that complement your existing portfolio and fill any gaps.
Diversification: Aim for a well-diversified portfolio across asset classes and investment styles.
Suggestions for Additional Investments
1. Large Cap Fund:

Stability: Add a large cap fund for stability and consistent returns.
Example: Look for funds with a proven track record in investing in bluechip companies.
2. Balanced Advantage Fund:

Dynamic Allocation: Consider a balanced advantage fund for dynamic asset allocation.
Benefits: These funds adjust their equity-debt mix based on market conditions, providing stability with growth potential.
3. Multi-Cap Fund:

Diversification: Invest in a multi-cap fund for exposure across market capitalizations.
Flexibility: These funds have the flexibility to invest across large, mid, and small cap stocks based on market opportunities.
Importance of Professional Guidance
Engage a Certified Financial Planner (CFP):

Personalized Advice: A CFP can provide personalized advice tailored to your financial goals and risk tolerance.
Optimization: Helps optimize your portfolio and ensure it aligns with your long-term objectives.
Regular Monitoring and Review
Periodic Portfolio Review:

Frequency: Review your investment portfolio periodically, at least annually.
Adjustments: Make adjustments as needed to ensure your investments stay aligned with your goals and market conditions.
Final Thoughts
Your current portfolio includes a mix of funds catering to different investment objectives. Consider reviewing the performance of your existing funds and adding new funds to further diversify and optimize your portfolio. Seeking professional guidance from a Certified Financial Planner can provide valuable insights and ensure your investments are on track to meet your goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: It’s commendable that you are investing Rs 30,000 per month in SIPs for your retirement. At age 33, you have a significant investment horizon, which allows for a higher risk appetite and potential for high returns. Let’s evaluate your current investments and suggest any necessary changes for better growth.

Current Investments
Your portfolio currently includes:

Nippon Small Cap: Rs 6,000
Quant Mid Cap: Rs 6,000
HDFC Mid Cap: Rs 6,000
Axis Small Cap: Rs 6,000
Parag Parikh Flexi Cap: Rs 6,000
Evaluation of Current Funds
Small Cap Funds: You have significant exposure to small-cap funds (Nippon and Axis Small Cap). These funds have high growth potential but also come with higher volatility and risk.

Mid Cap Funds: The allocation to mid-cap funds (Quant and HDFC Mid Cap) provides a balance between risk and return, with potential for substantial growth.

Flexi Cap Fund: Parag Parikh Flexi Cap offers diversification across market capitalizations, providing stability and growth potential.

Suggested Changes for Better Growth
Diversify Further: Your portfolio is heavily weighted towards small and mid-cap funds. Consider adding a large-cap fund to reduce volatility and provide stability.

Balanced Allocation: Aim for a mix of large-cap, mid-cap, and small-cap funds. This strategy balances risk and return effectively.

Reduce Overlap: Ensure that your funds do not have significant overlap in stock holdings. Diversified holdings reduce risk.

Recommended Portfolio Structure
Large Cap Fund: Allocate a portion to a large-cap fund for stability. Large-cap funds invest in established companies, offering steady returns.

Mid Cap Fund: Retain one or two mid-cap funds. They provide a good balance between growth and risk.

Small Cap Fund: Maintain a small portion in small-cap funds for high growth potential. However, avoid over-exposure to reduce risk.

Flexi Cap Fund: Keep the Parag Parikh Flexi Cap for its diversified approach.

Suggested Allocation
Large Cap Fund: Rs 6,000
Mid Cap Fund: Rs 6,000 (retain one existing fund)
Small Cap Fund: Rs 6,000 (retain one existing fund)
Flexi Cap Fund: Rs 6,000 (retain existing)
Balanced Fund or Multi-Cap Fund: Rs 6,000 (new addition)
Investing for Your Child
For your child’s future, consider a dedicated investment fund. A balanced or child-specific mutual fund can be ideal. These funds offer a mix of equity and debt, ensuring growth with reduced volatility.

Recommended Fund for Child
Child-Specific Fund or Balanced Fund: Rs 5,000 per month. These funds are designed to grow steadily while ensuring capital protection.
Importance of Regular Reviews
Periodic Review: Regularly review your investments to ensure they align with your financial goals and risk tolerance. Market conditions change, and periodic reviews help in making necessary adjustments.

Rebalancing Portfolio: Rebalance your portfolio periodically to maintain the desired asset allocation. This helps in managing risk and optimizing returns.

Benefits of Actively Managed Funds
Actively managed funds offer the potential for higher returns as fund managers make strategic decisions to outperform the market. While index funds provide average market returns, actively managed funds aim to exceed them.

Disadvantages of Direct Funds
Direct funds have lower costs but lack professional guidance. Investing through a Mutual Fund Distributor (MFD) with a CFP credential ensures expert advice and tailored investment strategies.

Conclusion
Your current portfolio has a strong foundation, but it can benefit from further diversification and balanced allocation. Adding a large-cap fund and a balanced fund will reduce volatility and provide steady growth. For your child’s investment, a dedicated child-specific or balanced fund is recommended. Regular reviews and rebalancing will ensure your portfolio remains aligned with your financial goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in