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Nikunj

Nikunj Saraf  |308 Answers  |Ask -

Mutual Funds Expert - Answered on May 22, 2023

Nikunj Saraf has more than five years of experience in financial markets and offers advice about mutual funds. He is vice president at Choice Wealth, a financial institution that offers broking, insurance, loans and government advisory services. Saraf, who is a member of the Institute Of Chartered Accountants of India, has a strong base in financial markets and wealth management.... more
RT Question by RT on May 19, 2023Hindi
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Hello Nikunj Ji, I,m 45 yo and planning to invest in several mutual funds with a total outlay of Rs 20000 per month which i can increase by another 10-15k in the ones mentioned below with same breakup as shown. Kindly share your feedback .Also Im planning these investments keeping in view time horizon of 8-10 years. SBI Nifty Index Fund Direct Growth(15%) 3000 SBI Nifty Next 50 Index Fund Direct Growth(10%) 2000 Canara Robeco Equity Hybrid Fund Direct Plan Growth(10%) 2000 Kotak Emerging Equity Fund - Direct Plan - Growth(10%) 2000 Nippon India Nifty Smallcap 250 Index Fund Direct Growth(10%) 2000 HDFC Small Cap Fund-Direct Growth Option(10%) 2000 Tata Small Cap Fund Direct Growth(7.5%) 1500 Kotak Small Cap Fund - Direct Plan - Growth(7.5%) 1500 SBI Gold Fund Direct Plan Growth (10%) 2000 DSP Natural Resources & New Energy Fund Direct Plan Growth(10%) 2000 Regards, RT

Ans: Hello Value Investor. It seems your current portfolio is highly overdiversified. Hence, I would suggest to reconcise and reshuffle your portfolio.
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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Vivek

Vivek Lala  | Answer  |Ask -

Tax, MF Expert - Answered on Aug 19, 2023

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Hi We are doing our investments in Mutual Funds. Currently we save about 30% of our net income in Mutual Funds, 50% in FDs, 15% in PPF and 5% of our income post taxes, expenses and EMIs. We are looking at mutual fund investments for a time horizon of 20 years. We investment every month equally in these schemes: 1. Index (ICICI, Kotak, UTI, HDFC) 2. Large Cap (ICICI, Mirae Asset) 3. Mid Cap (HDFC, Mirae Asset, Kotak) 4. Small Cap (HDFC, Kotak, ICICI) 5. Flexi Cap (HDFC, ICICI, Kotak) 6. Multi Cap (HDFC, ICICI, Kotak) 7. Hybrid (ICICI, HDFC, Mirae Asset) 8. Large and Midcap (ICICI, Kotak) 9. Additional (ICICI Value Discovery) Would like your views on this. I can take some risks since we are additionally saving in FDs as stated above.
Ans: Hello, as per the data given by you, assuming you are 35 years old , you have about 20 years to build a corpus and you will have regular income till then. As per that my suggestion would be as follows :
Out of Rs.100 to be invested by you, you should invest - 20% in small caps, 20% in mid caps, 20 % in large and mid caps, 20 % in thematic funds and 20% in debt funds/ hybrid funds.
Eliminate 100% of FD's and park that existing money in debt funds or split it between debt and equity.
You don't need index funds as they underperform by 2-7% to the active funds post expenses so it's a no brainer to go for actively managed funds.

Please note that these suggestions are based on your stated goals and the information you provided. It is always a good idea to consult with a financial advisor in person to better understand your risk tolerance, time horizon, and specific financial goals.

..Read more

Ramalingam

Ramalingam Kalirajan  |8604 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jan 02, 2025

Asked by Anonymous - Jan 01, 2025Hindi
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Please give suggestions. I am planning to invest 20k/month in below mutual funds. Please review it. 7000 ICICI Pru Bluechip Fund 5000 Motilal Oswal Midcap Fund 3000 Nippon India Small Cap Fund 2000 ICICI Pru Manufacturing Fund 3000 Parag Parikh Flexi Cap I am planning to keep these funds for minimum 5 Years
Ans: Your planned investment strategy shows a thoughtful mix of funds. It includes large-cap, mid-cap, small-cap, thematic, and flexi-cap funds. Let us assess and refine this portfolio for better long-term returns.

Strengths of Your Portfolio
1. Diversification Across Market Segments

The mix of large, mid, and small-cap funds ensures broad market coverage.
This reduces concentration risk and captures growth potential in different segments.
2. Flexi-Cap Inclusion for Versatility

Flexi-cap funds offer allocation flexibility.
They help adjust to market trends dynamically.
3. Thematic Exposure for High Growth

Manufacturing-focused funds tap into specific growth sectors.
These are ideal for investors seeking thematic diversification.
Potential Areas of Improvement
1. Overlap Between Funds

Some funds may have overlapping stocks, diluting diversification.
Large-cap and flexi-cap funds often share similar holdings.
2. Short Holding Period

Five years is a relatively short horizon for small-cap and thematic funds.
These categories perform best over longer horizons, 7–10 years.
3. Underweight Debt Allocation

No allocation to debt funds limits stability.
Debt funds are crucial to counter volatility, especially in uncertain markets.
4. Direct Fund Selection Challenges

Direct plans save costs but lack professional advice.
Regular plans with Certified Financial Planner guidance offer better long-term value.
Recommended Adjustments
1. Reassess Thematic Allocation

Thematic funds are higher-risk due to their sector-specific focus.
Limit allocation to 10–15% of the total portfolio.
2. Balance Small-Cap Exposure

Small-cap funds can be volatile in the short term.
Reallocate a portion to mid-cap or diversified funds for balance.
3. Introduce Balanced Advantage Funds

Balanced advantage funds offer a mix of equity growth and debt stability.
They reduce risk while maintaining reasonable growth potential.
4. Avoid Overdependence on Large-Caps

Review the allocation in large-cap funds.
Add multi-cap funds for diversified exposure to different market capitalisations.
Active Funds vs Index Funds
Actively managed funds can outperform during volatile markets.
They provide opportunities for higher alpha through active management.
Index funds lack the adaptability to changing market conditions.
Taxation Considerations
LTCG above Rs 1.25 lakh from equity funds is taxed at 12.5%.
STCG is taxed at 20%.
Plan investments and withdrawals to optimise post-tax returns.
Suggested Strategy for Rs 20,000 Monthly SIP
1. Diversified Equity Focus

Allocate Rs 8,000–10,000 to flexi-cap and mid-cap funds.
These funds balance growth potential with stability.
2. Stable Growth Through Large-Cap Funds

Allocate Rs 5,000 to large-cap funds for consistent performance.
They anchor the portfolio in volatile markets.
3. Balanced Advantage and Debt Allocation

Allocate Rs 3,000 to a balanced advantage fund.
This adds stability and ensures a cushion against market corrections.
4. Controlled Thematic Exposure

Allocate Rs 2,000 to thematic or sectoral funds.
Keep this allocation minimal due to sector-specific risks.
Final Insights
Your planned investments show thoughtful diversification and growth potential. Refining allocations can further optimise returns while reducing risks. Work with a Certified Financial Planner for personalised guidance and regular reviews.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

..Read more

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DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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