Need your valuable advice regarding my SIP. I have invested in Aditya birla sun life focused equity fund Growth please give me your advice what I can do now?

Ans: Hello Valued Investors. I would suggest to switch this fund to better peer schemes.

Ans: It's excellent to see your commitment to investing, especially as you plan for your financial future. Let's explore your options for starting a SIP:

• Given your existing investment of 12,50,000/- in SBI Equity Regular Growth Mutual Fund, it's clear you're already on the path to building wealth.
• Adding a monthly SIP of 5,000/- will further enhance your investment strategy and help you achieve your financial goals.

• When selecting a SIP, consider factors like your investment horizon, risk tolerance, and financial objectives.
• As you're fifty years old, it's essential to strike a balance between growth potential and stability in your investment choices.

• Equity mutual funds offer growth potential but also come with higher volatility. Since you're already invested in SBI Equity Regular Growth Mutual Fund, you may want to diversify your portfolio with a different category of mutual fund.
• Debt mutual funds or balanced funds could be suitable options to consider, offering a more conservative approach while still providing potential for growth.

• Additionally, ensure you choose a SIP with a reputable fund house and a track record of consistent performance.
• Look for funds that align with your investment goals and have a proven track record of delivering returns over the long term.

• As a Certified Financial Planner, I'm here to guide you in selecting the right SIP to complement your existing investment and financial objectives.
• We'll evaluate various mutual fund options, assess their suitability for your portfolio, and ensure they align with your risk profile and investment horizon.

• Remember, investing is a journey, and it's essential to stay disciplined and patient.
• By making informed decisions and staying focused on your long-term goals, you can achieve financial success.

• If you have any further questions or need assistance in selecting a SIP, feel free to reach out.
• Your commitment to investing is commendable, and I'm here to support you every step of the way.

Ans: what is your vision behind investing and how long are you going to invest?

Ans: You have been consistently investing in a sector-specific fund. This demonstrates financial discipline, which is admirable. However, the fund's poor performance raises valid concerns.

1. Understand Sector-Specific Funds
PSU equity funds invest in public sector companies.

Their performance depends on the government’s policies and sectoral growth.

These funds can underperform during market corrections or sector-specific downturns.

2. Performance Evaluation of Your Fund
Short-term market volatility often affects sector funds.

Review the fund’s performance over 3 to 5 years instead of a few months.

Compare its returns with the benchmark index and peer funds in the same category.

3. Analyse Your Financial Goals
Consider if this fund aligns with your investment goals.

Sector funds are suitable only for specific, high-risk strategies.

If your goal requires stable and consistent returns, diversified funds are better.

4. Consider Opportunity Cost
Poor-performing funds can hinder your wealth creation journey.

Investing in well-managed diversified equity funds can yield better long-term growth.

Active fund management in large-cap or flexi-cap funds can provide a balanced risk-reward ratio.

5. Tax Implications on Exit
Redeeming investments within one year incurs short-term capital gains tax (20%).

For investments held beyond a year, long-term capital gains above Rs 1.25 lakh are taxed at 12.5%.

Evaluate your tax liability before exiting this fund.

6. Regular vs Direct Funds
Direct funds often lack the professional guidance available through regular plans.

A Certified Financial Planner can help you choose funds matching your goals and risk profile.

7. Steps for a 360-Degree Solution
Assess Your Portfolio
Review your overall portfolio, including other investments.

Check if any other funds are underperforming or overlapping in focus.

Diversify for Stability
Reallocate your SIP to diversified equity or flexi-cap funds.

These funds balance risk across multiple sectors and capitalise on growth opportunities.

Monitor Fund Performance
Regularly review the performance of all your investments.

Set clear benchmarks for evaluating their success.

8. Should You Continue or Exit?
Continue investing only if you believe the PSU sector will rebound in the long term.

Exit if you find consistent underperformance compared to the benchmark.

Redirect your SIP to better-performing, diversified funds for higher stability and returns.

Finally
Your decision should align with your long-term financial goals and risk tolerance. Consult with a Certified Financial Planner for a detailed portfolio review and actionable recommendations. This will ensure your investments grow steadily and meet your objectives.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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