I am 24 year old earning a salary of 112k per month after all deductions. I want to make a solid portfolio in long term. My current investments and SIP are :-
1. PF : 12800 (6400 employer + 6400 employee)
2. Parag Parikh flexi cap fund: 7k
3. Kotak Multicap Fund: 4k
4. Motilal Oswal Mid Cap fund: 4k
5. Bandhan small cap fund: 4k
6. Axis small cap fund: 2k
7. Motilal Oswal Defence Index fund: 1k
I can take risks since I have the advantage of time with me and will step up my investments as my salary grows. Please take a look at my investments and give your review. If anything more needs to be added please highlight those also. Thanks
Ans: At 24, your commitment to investing is impressive. You are taking the right steps early, which is essential for long-term wealth creation.
Let us now evaluate and structure your portfolio from a 360-degree perspective.
Income and Investment Allocation
Your monthly take-home is Rs. 1,12,000.
You are investing nearly Rs. 22,000 in mutual funds.
Your PF contribution is Rs. 12,800 (combined employer and employee).
This means 31% of your monthly income is going into long-term savings.
This savings rate is excellent for your age.
Let us now go deeper into each element of your investments.
Provident Fund (PF)
PF is a stable and tax-friendly retirement corpus builder.
It offers assured compounding at decent rates.
Contributions are automatic and disciplined.
It gives long-term debt exposure to your portfolio.
Keep contributing. Do not withdraw it.
Use this as your long-term retirement backbone.
Mutual Fund SIPs – Overview
You have spread Rs. 22,000 across 7 SIPs:
1 Flexi Cap Fund
1 Multicap Fund
1 Mid Cap Fund
2 Small Cap Funds
1 Defence Thematic Index Fund
1 Sectoral Index Fund (Defence)
Let us now assess these in detail and suggest improvements.
Parag Parikh Flexi Cap Fund – Rs. 7,000
This is a good choice for broad diversification.
Flexi cap funds can switch between large, mid, and small caps.
You should retain this fund.
Make it your core anchor in equity allocation.
Keep investing. Increase SIP here when income grows.
Kotak Multicap Fund – Rs. 4,000
Multicap funds invest in all three market caps with minimum allocations.
Works well as a diversification strategy.
Offers more balanced risk compared to small/mid caps.
This fund complements the flexi cap allocation well. Keep it.
Motilal Oswal Mid Cap Fund – Rs. 4,000
Midcap funds carry higher volatility than large-cap and flexi cap funds.
Suitable for long-term growth.
However, this category should not exceed 20% of your equity portfolio.
Limit exposure to one midcap fund only.
Bandhan Small Cap Fund – Rs. 4,000
Axis Small Cap Fund – Rs. 2,000
You have two small-cap funds.
This leads to duplication and overlap.
Small caps are high risk, though high potential.
Two funds here add complexity and no major diversification.
Keep only one. Stop the other. Prefer a consistent performer.
Motilal Oswal Defence Index Fund – Rs. 1,000
This is a sectoral index fund.
Sectoral funds are concentrated bets.
They do not diversify your portfolio.
This fund tracks a niche theme: defence stocks.
This is a tactical bet, not a core holding.
Stop fresh SIPs here.
These funds lack flexibility.
They cannot exit underperforming stocks.
A Note on Index Funds
You have invested in an index fund (Defence).
It’s important to understand why actively managed funds are better:
Index funds follow the market blindly.
No fund manager expertise to beat the market.
No exit flexibility from weak stocks.
Cannot adapt to market cycles.
Actively managed funds, with strong research teams, offer better long-term potential.
They can outperform and protect downside risk better.
Portfolio Duplication and Overlap
Two small-cap funds create unnecessary duplication.
One mid-cap fund is enough.
Sector fund adds volatility, not value.
Keep only 3 to 4 quality funds.
This brings simplicity, better tracking, and effective compounding.
Suggested SIP Structure
Here is a more effective and balanced approach:
Flexi Cap Fund – Rs. 7,000
Multicap Fund – Rs. 5,000
Mid Cap Fund – Rs. 4,000
Small Cap Fund (Only One) – Rs. 4,000
Keep Rs. 2,000 as buffer to increase one of the above.
This way:
You reduce clutter.
You avoid overlap.
You gain better performance tracking.
Review on Direct vs Regular Plans
If you are investing in direct funds, let’s pause for a moment.
Disadvantages of Direct Plans:
No support or guidance when markets fall.
Portfolio often becomes cluttered over time.
Investors chase short-term returns, not long-term goals.
No periodic review by experts.
You may miss opportunities and fall into DIY traps.
Invest through a CFP-qualified MFD in regular plans instead.
Offers handholding in tough markets.
Brings clarity and discipline.
Helps review and rebalance regularly.
Most importantly, helps you stay on track with your goals.
Costs of regular plan are worth the guidance it offers.
Risk Appetite and Time Advantage
At 24, your age is your biggest advantage.
You have a 30+ year runway to build wealth.
You can afford short-term volatility.
But still, your portfolio must be structured and monitored.
High risk should not mean unmanaged risk.
What More Can Be Added
Here are a few additional strategies:
Step-Up SIPs: Increase SIPs every year with salary hike.
Emergency Fund: Keep Rs. 1.5 to 2 lakhs in a liquid fund.
Term Insurance: If you have dependents, buy pure term cover.
Health Insurance: Don’t depend only on employer cover.
Tax Planning: Use ELSS or other tools efficiently.
Investment Habits You Should Build Now
Keep reviewing your portfolio once a year.
Don’t panic in a falling market.
Avoid switching funds too often.
Read fund factsheets quarterly.
Stick to SIP discipline during volatility.
Increase investments, not expenses, with salary hike.
How You Can Grow This Portfolio
Assuming you increase your SIPs every year:
Rs. 22,000 monthly SIP today
Rs. 2,000 increase per year
In 10 years, this becomes a solid corpus.
But only if you stay invested and avoid knee-jerk reactions.
What You Should Avoid
Don’t chase short-term returns.
Don’t over-diversify with 6-7 funds.
Don’t go heavy on sectoral or thematic funds.
Don’t fall for trending NFOs or fancy themes.
Focus on core + satellite approach.
Ideal Portfolio Mix for Your Profile
At your age, this mix works well:
Flexi Cap / Multicap – 50%
Mid Cap – 20%
Small Cap – 20%
Debt (via PF) – 10%
This balances growth, volatility, and stability.
Taxation Clarity – If You Sell Later
New mutual fund tax rules are:
Equity LTCG over Rs. 1.25 lakhs taxed at 12.5%.
STCG from equity taxed at 20%.
Debt funds taxed as per income slab.
So stay invested for the long term.
Avoid unnecessary exits.
Rebalancing and Reassessment
Once a year:
Review returns.
Check fund performance.
Align with your goals.
Remove underperformers.
Increase SIPs.
If you work with a CFP-qualified MFD, this becomes easier.
Finally
You are doing very well already.
Most 24-year-olds delay investing.
You are ahead of the curve.
With minor corrections, you will build a strong foundation.
Just keep things:
Simple
Structured
Consistent
Avoid the noise. Stick to the plan.
Time and discipline will do the magic.
Best Regards,
K. Ramalingam, MBA, CFP
Chief Financial Planner
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
Question by ABHISHEK on Feb 10, 2023Hindi.jpg "portfolio-o (2).jpg")
