Hi Nikunj, I am a 44 year old working professional (IT sector) who wants to build a corpus of 5 crores during retirement. I am currently investing in the following MFs:- 1) Axis Gold Fund- 5000/month 2) Kotak Gold Fund- 5000/month 3) ICICI Prudential Nifty 50 Index Fund- 7,500/month 4) Aditya Birla Sun Life Tax Relief 96 Fund- 1000/month 5) ICICI Prudential Long Term Equity Fund (Tax Saving)- 1000/month 6) Axis Long Term Equity Fund- 1,500/month 7) DSP Tax Saver Fund- 1,500/month 8) DSP Equity & Bond Fund- 6,250/month 9) SBI Equity Hybrid Fund- 6,250/month 10) Canara Robeco Equity Hybrid Fund- 6,250/month 11) Mirae Asset Hybrid Equity Fund- 6,250/month 12) SBI Focused Equity Fund- 7,500/month 13) Axis Small Cap Fund- 7,500/month 14) Aditya Birla Sun Life Corporate Bond Fund- 20,000/month 15) PGIM India Midcap Opportunities Fund- 20,000/month 16) Nippon India (AMC) (Short Term Fund, Gold Savings Fund, Nifty Next 50 Junior BeES FoF, Nifty Midcap 150 Index, Index Fund Nifty 50 Plan)- 10,425 I am not sure if my portfolio is good enough for long term goals, or if I am investing in a lot of redundant schemes. I have a moderately medium risk appetite with focus on maximum corpus build. Please give your opinion and suggest if some changes are required. Thanks much in advance.

Ans: Hello Kapil. To achieve 2 cr corpus in the next 15 years , your current sip contribution seems to be perfect. I would suggest to reconsider the Axis Focused 25 Fund and ICICI Midcap Fund with its peer schemes.

Ans: Dear Kapil,

I appreciate your proactive approach towards building wealth for the future. I must say that you have chosen a diversified set of mutual funds which is a good start towards achieving your financial goals.

To begin with, your investment of Rs. 28,000 per month towards mutual funds is a commendable step towards wealth creation. Assuming a yearly growth rate of 12%, you can potentially reach your target of 2 Crore in the next 15 years.

Coming to your mutual fund portfolio, the HDFC Children's Gift Fund has a lock-in period of five years, which is ideal if you are investing for your child's education or marriage. However, you may consider shifting your investments to the HDFC Hybrid Equity Fund or HDFC Equity Fund, which have delivered good returns historically and have a lower lock-in period.

The ICICI Prudential Midcap Fund and ICICI Prudential Multicap Fund are excellent choices for investing in mid-cap and multi-cap funds, respectively. The Axis Bluechip Fund is a good option for investing in blue-chip companies, while the Axis Focused 25 Fund and SBI Focused Equity Fund are suitable for investing in focused portfolios.

Overall, your mutual fund portfolio seems to be well diversified, and you may consider making minor tweaks to it based on your risk appetite and investment goals. As always, it's essential to consult with your financial advisor before making any investment decisions.

I hope this helps!

Ans: Dear Friend,
Great to that you are committed in your investments and keen to have your retirement planning query resolved. It's great to see that you're proactively managing your finances. Very few people are managing their own finances. I always recommend my clients to take hold of your finances and do not depend on any other person or advice. Let’s see what kind of corpus you might expect after five years, along with some suggestions for your mutual fund portfolio. Assumed Annual Return 6% Fixed Deposit, Assumed Annual Return:** 7.5% for PPF and Sukanya Scheme. Assumed Annual Return 10% on Mutual Funds. you can expect approximately ?8.45 Crores after 5 years. your investment is highly dependent on Equity related Mutual funds which consider high risk .
Some recommendations, Consolidate Similar Funds, Having too many funds in the same category can lead to overlapping investments and doesn't significantly increase diversification.
Diversify Across Market Caps Ensure you have exposure to large-cap, mid-cap, and small-cap funds for balanced growth. They offer low-cost diversification and track market indices.
Regularly Review Performance of your funds against benchmarks. As you're approaching 50, consider gradually shifting a portion of your investments to less volatile instruments like debt funds or fixed-income securities. Consider Index Funds or ETFs.
Ensure you have an emergency fund covering at least 6 months of expenses. Be mindful of the tax implications of your investments, especially when redeeming or rebalancing. Consult a Financial Advisor
Best regards,
Nitin Narkhede
Founder & MD, Prosperity Lifestyle Hub https://Nitinnarkhede.com
Free Webinar https://bit.ly/PLH-Webinar

Ans: You have built a diversified portfolio with a combination of large-cap, mid-cap, ELSS, and flexi-cap funds. Each fund serves a specific purpose, but a review will help optimize your investments to meet your goal of Rs. 1.5 crore in 12 years. Let’s assess each category.

Large-Cap Funds
Nippon India Large Cap Fund – Rs. 2,000 per month

Mirae Asset Large Cap Fund – Rs. 3,000 per month

Axis Bluechip Fund

These funds focus on large-cap companies, offering stable growth but with relatively lower risk. While having multiple large-cap funds ensures stability, it may lead to overlap in the portfolio. You can consider consolidating them into 1 or 2 funds to reduce redundancy. Mirae Asset and Axis Bluechip are solid options for continued long-term investments.

ELSS Funds
Axis ELSS Tax Saver – Rs. 1,000 per month

Kotak ELSS Tax Saver – Rs. 1,000 per month

ELSS funds offer tax benefits under Section 80C. However, having two ELSS funds for Rs. 2,000 might not be necessary. You can choose the one with consistent performance and focus your ELSS investment there. Axis ELSS has performed well historically, but assess both before making a decision.

Mid-Cap Funds
Motilal Oswal Mid Cap – Rs. 2,000 per month

Axis Mid Cap – Rs. 1,000 per month

Mid-cap funds offer higher growth potential than large-cap funds, but with more risk. Holding two mid-cap funds is a balanced strategy, but since the Axis Mid Cap has been consistently strong, you can consider increasing your SIP here. Motilal Oswal Mid Cap is a good performer but may need to be watched for volatility.

Flexi-Cap Funds
JM Flexi Cap Fund – Rs. 2,200 per month
Flexi-cap funds give fund managers the flexibility to invest across market capitalizations, reducing concentration risk. This fund provides good diversification. Review its performance regularly, as flexi-cap funds can vary in returns based on market conditions.

Passive Multi-Asset Fund
ICICI Prudential Passive Multi-Asset Fund (One-time investment of Rs. 5,000)
This fund combines equity, debt, and gold to balance risk. While passive funds reduce the need for active monitoring, they may not provide the same growth potential as actively managed funds. Actively managed funds tend to perform better in dynamic markets, which could better align with your long-term goal of wealth creation.

Contra Fund
SBI Contra Fund – Rs. 2,000 per month
Contra funds follow a contrarian investment strategy, buying when others are selling. While this can provide significant gains during market recovery, contra funds may experience long periods of underperformance during market booms. It's a high-risk option that may not suit every portfolio. Regularly review its performance to ensure it fits with your investment goals.

Suggestions for Improvement
Consolidate Funds: You have multiple large-cap and ELSS funds. Streamline to 1 or 2 per category to reduce overlap and improve focus. A well-performing large-cap fund and one ELSS should suffice.

Increase SIP in High-Growth Funds: Focus more on mid-cap and flexi-cap funds, as they have higher growth potential. Increase your SIP in Axis Mid Cap and JM Flexi Cap, as they can boost your returns over the long term.

Review Contra and Passive Fund: SBI Contra and ICICI Passive Multi-Asset may not align with your goal of aggressive wealth creation. Consider switching to funds with more aggressive growth profiles, like a focused equity fund or a small-cap fund, to maximize potential returns.

Building a Rs. 1.5 Crore Corpus
To achieve your goal of Rs. 1.5 crore in 12 years, you'll need to invest aggressively. Based on your current portfolio, the estimated return would range between 10-12% annually, depending on market conditions and fund performance. To reach Rs. 1.5 crore in 12 years, you may need to increase your monthly SIP amount to around Rs. 20,000-25,000, depending on the returns.

Steps to Build the Corpus:
Increase SIP Contributions: To reach your goal, gradually increase your SIP amount over time. Aim to raise your SIP to Rs. 20,000-25,000 per month.

Rebalance Annually: Revisit your portfolio at least once a year. Make sure your portfolio remains aligned with your long-term goal.

Stick to Long-Term Investment: Avoid switching funds frequently. Stay committed to your investment horizon, and let the power of compounding work for you.

Emergency Fund: Ensure that you have an emergency fund in place, covering at least 6 months of expenses. This will prevent you from withdrawing your investments during unforeseen events.

Tax Planning with ELSS
You are already investing Rs. 2,000 in ELSS funds, which qualifies for tax deductions under Section 80C. Continue this as part of your tax-saving strategy, but make sure it fits into your overall portfolio without over-diversifying.

Final Insights
Your portfolio is well-diversified but can be simplified by reducing overlapping funds.

Focus on high-growth funds like mid-cap and flexi-cap to achieve your long-term goals.

Regularly review and rebalance your portfolio based on performance and market conditions.

Increase your SIP contributions gradually to ensure you are on track for your Rs. 1.5 crore goal in the next 12 years.

Avoid frequent switching; give your investments time to grow.

Tax planning with ELSS funds is good, but one fund is enough for your tax-saving needs.

Best Regards,

K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment