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Nikunj Saraf  | Answer  |Ask -

Mutual Funds Expert - Answered on May 24, 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
A Question by A on May 23, 2023Hindi
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Dear Sir, Please advise. I plan to do monthly SIPs with amounts in the following MFs :- Icici Pru PSU Equity 1500 Canara Rebeco Emerging Equity 1400 HDFC Mid cap oppertunity 1300 Franklin Focus equity 1200 ABSL Frontline Equity 1100 Sundram Dividend yield 1000 ABSL Focus Equity 900 Franklin Equity Advantage 800 Franklin Blue chip 700 ABSL Multicap 600 I will appreciate your quick analysis & reply Yours truly, A K Khosla

Ans: Hello Value Investor. In response to your concern, I would like to address few SIPs can be reconsider such as ABSL Frontline Equity Fund, Sundaram Dividend yield ,ABSL Focus Equity ,Franklin Equity Advantage ,Franklin Blue chip and ABSL Multicap for long run investments.
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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Ramalingam

Ramalingam Kalirajan  |9383 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Oct 09, 2024

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Sir, Based on your suggestions I have decided to start SIP in the below MFs: Large Cap 1. ICICI Prudential Bluechip Fund- 500 Rs. per month 2. SBI Bluechip Fund- 500 Rs. per month 3. Nippon India Large Cap Fund- 500 Rs. per month 4. HDFC Top 100 Fund- 500 Rs. per month Total Amount : 2000 Rs. per month Balanced Fund 1. ICICI Prudential Equity & Debt Fund- 500 Rs. per month 2. UTI Aggressive Hybrid Fund- 500 Rs. per month Total Amount: 1000 Rs. per month Multi Cap 1. Nippon India Multi Cap- 500 Rs. per month 2. Quant Active Fund- 500 Rs. per month Total Amount- 1000 Rs. per month Your observations on the above please? Should I start my SIP with the above proposed portfolio??
Ans: Your proposed portfolio covers large-cap, balanced, and multi-cap categories, which is a good starting point for diversification. However, each mutual fund category and fund selection needs to align with your long-term goals, risk tolerance, and the current financial landscape.

Before proceeding with this portfolio, consider these key points:

Fund Overlap: Investing in multiple large-cap funds could result in overlapping of the same stocks, as large-cap funds generally invest in similar companies. This could limit diversification.

Balanced Funds: Your balanced funds, which mix equity and debt, are suitable for some stability. However, it’s essential to check if they match your risk-return profile and goals for stability versus growth.

Multi-Cap: Multi-cap funds offer diversified exposure across market caps, which is good for long-term growth. However, ensure that you are comfortable with the inherent volatility they can bring.

To ensure the best fit for your goals and preferences, it's advisable to consult with a Certified Financial Planner (CFP) or a Mutual Fund Distributor (MFD). They can provide a tailored and comprehensive plan, considering factors like:

Your overall financial goals.
Investment horizon.
Risk appetite.
Fund performance consistency.
This personalized advice can help you structure a portfolio that balances growth and safety effectively.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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

..Read more

Ramalingam

Ramalingam Kalirajan  |9383 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Oct 09, 2024

Money
Sir, I have decided to start SIP in the below MFs: Large Cap 1. ICICI Prudential Bluechip Fund- 500 Rs. per month 2. SBI Bluechip Fund- 500 Rs. per month 3. Nippon India Large Cap Fund- 500 Rs. per month 4. HDFC Top 100 Fund- 500 Rs. per month Total Amount : 2000 Rs. per month Balanced Fund 1. ICICI Prudential Equity & Debt Fund- 500 Rs. per month 2. UTI Aggressive Hybrid Fund- 500 Rs. per month Total Amount: 1000 Rs. per month Multi Cap 1. Nippon India Multi Cap- 500 Rs. per month 2. Quant Active Fund- 500 Rs. per month Total Amount- 1000 Rs. per month Your observations on the above please? Should I start my SIP with the above proposed portfolio??
Ans: Your approach to starting a SIP in a combination of large-cap, balanced, and multi-cap mutual funds shows a thoughtful effort toward diversification. This is a great starting point, and I appreciate the time you've taken to create a mix of equity-focused funds. However, before you proceed, there are several points to consider. I will break down the analysis by fund type to help you understand whether this portfolio suits your financial goals, risk profile, and investment horizon.

Large-Cap Mutual Funds
You have selected four large-cap funds with an investment of Rs. 500 per month each, totaling Rs. 2,000.

Diversification Issue: Large-cap funds generally invest in the same set of top companies in India. While large-cap funds are stable, having multiple large-cap funds may lead to portfolio overlap. That means different funds might invest in the same companies, limiting diversification benefits.

Recommendation: You might consider reducing the number of large-cap funds. You could keep one or two large-cap funds and allocate the remaining amount to another fund category for better diversification. This will help balance your portfolio and reduce duplication of holdings.

Balanced Funds (Equity & Debt Mix)
Balanced funds aim to reduce volatility by investing in both equity and debt. This adds stability, especially during market downturns.

Suitability: The two balanced funds you've chosen offer a mix of aggressive equity exposure and debt, which helps cushion your portfolio in volatile market conditions.

Investment Horizon: Since you are looking at a long-term horizon, this allocation is beneficial as these funds provide moderate risk and can help you during market corrections.

Recommendation: Continue with these balanced funds as they serve the purpose of balancing risk with potential returns. Keep monitoring their performance and ensure that they stay aligned with your financial goals.

Multi-Cap Funds
Multi-cap funds are a great addition to your portfolio as they invest in large, mid, and small-cap companies. This provides you with diversified exposure across the market spectrum.

Suitability: The two funds you've selected offer you a balanced growth opportunity by investing in companies of various market capitalizations. Multi-cap funds tend to be more volatile than large-cap funds but have the potential for higher returns over the long term.

Recommendation: Multi-cap funds are a good option for investors with a long investment horizon, such as yourself. They will allow you to participate in the growth of companies across sectors and sizes. You can continue with this allocation, but monitor the portfolio periodically to ensure its performance aligns with your risk tolerance.

Overall Portfolio Assessment
Diversification: Your portfolio is moderately diversified across large-cap, balanced, and multi-cap categories. However, due to the multiple large-cap funds, you might see overlap, as discussed earlier. For a more optimized portfolio, you can consider adding a mid-cap or small-cap fund instead of having too many large-cap funds. These categories can provide higher growth potential over the long term, but they come with higher risk.

Risk and Return Balance: Your current portfolio is balanced between high-stability funds (large-cap and balanced funds) and higher growth potential funds (multi-cap). This combination works well for investors who seek steady growth with limited risk.

General Suggestions on Mutual Fund Selection
Avoid Overlapping: As mentioned earlier, holding multiple funds from the same category, especially in large-cap funds, can lead to overlapping holdings. Try to consolidate and focus on fewer but stronger funds within each category to avoid unnecessary duplication.

Regular vs. Direct Plans: You may want to consider investing through regular plans with a Certified Financial Planner (CFP) or Mutual Fund Distributor (MFD). Direct plans seem attractive because they come with lower expense ratios. However, regular plans offer the benefit of professional advice, which is essential for long-term portfolio maintenance. A CFP or MFD can help you rebalance your portfolio, monitor fund performance, and provide tax-efficient strategies.

Active Funds Over Index Funds: Active funds, which you have chosen, can outperform index funds in the long run. Unlike index funds, which merely track the market, active funds are managed by experienced fund managers. They have the flexibility to pick and choose stocks that have the potential for higher returns, which could be beneficial for you given your long-term goals.

Taxation of Mutual Funds
Equity Funds: Long-term capital gains (LTCG) tax on equity mutual funds is 12.5% for gains above Rs. 1.25 lakh. This means that after holding equity funds for more than one year, your returns will be taxed at this rate.

Short-Term Capital Gains (STCG): Equity funds held for less than one year are taxed at 20%. Ensure you have a long-term approach to minimize this taxation.

Balanced Funds: Balanced funds are taxed based on their equity exposure. If they hold more than 65% in equity, the taxation is similar to equity funds. Otherwise, they will be taxed like debt funds.

Debt Funds: Long-term capital gains on debt funds are taxed based on your income tax slab. Given this, holding debt funds for over three years helps in availing indexation benefits, reducing tax liabilities.

Retirement Planning and Financial Goals
Given your age and your desire to build a retirement corpus in 10 years, your portfolio should focus on growth. Based on the mix of funds you’ve selected, here’s an evaluation:

Retirement Corpus: You will need a solid growth strategy to accumulate the desired retirement corpus in the next decade. Given your current portfolio allocation, it is important to keep your equity exposure high, as it offers the best growth potential over the long term.

Children's Education and Marriage: With two young children, education and marriage expenses will be significant. Keep in mind that education costs rise faster than inflation. To manage these future needs, consider segregating your investments: one portfolio for retirement and another for education.

Emergency Fund: Ensure you also maintain a sufficient emergency fund in liquid instruments such as fixed deposits or liquid mutual funds. This fund should cover at least 6 to 12 months of expenses.

Final Insights
Consolidate Funds: Instead of multiple large-cap funds, consider focusing on 1 or 2 strong performers. This will reduce duplication and enhance your returns.

Monitor and Review: Regularly review the performance of your funds with a Certified Financial Planner. This will ensure your portfolio stays aligned with your goals and risk tolerance over time.

Tax Planning: As your investments grow, it’s important to remain mindful of the tax implications of your gains. Keeping a long-term approach will help minimize taxes.

Long-Term Vision: Focus on maintaining an equity-heavy portfolio for the next 10 years, as equity investments tend to outperform in the long run. Balanced and multi-cap funds can provide a good mix of stability and growth.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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

..Read more

Latest Questions
Adarsh

Adarsh Rai  |12 Answers  |Ask -

HR, Leadership coach - Answered on Jul 03, 2025

Asked by Anonymous - Jun 11, 2025Hindi
Career
Hi. I am currently 29. Married with no kids. Wife not earning. Planning for a kid this year. Monthly earning 60k post tax. Have savings of 2 lakhs. Have personal loan of 9 lakhs. Monthly expenses 40k including emi's. I have lost interest in job and I don't want to work anymore. I want to do business which can give monthly 50 to 60k income. Max I can invest 2lakhs. Is there any business which I can start with 2 lakhs and generate monthly income of 60k ? I am frustrated with working under an employer. I want to start my own venture. Please suggest.
Ans: Spandan, pause before you mail the resignation.

Your maths
60 k take-home
40 k spends (15 k of that is EMI on a 9 L loan)
→ 20 k buffer

A newborn will nudge monthly costs up by 8-10 k. Cash cushion shrinks fast.

So the plan must earn while you learn, not leap blind.

Keep the paycheck six more months.
Use evenings to test micro-ideas. Risk stays capped at ?0 for now.

Choose a “cash-this-month” niche, not a moon-shot.
Pick work that turns inventory ≤ ?50 k into sales inside 30 days.

Tiffin + office snacks (two dishes, 40 boxes) - ?25 k utensils, ?10 k FSSAI, ?5 k flyers - ?120 per box × 40 = ?4.8 k /day

Amazon / Flipkart reselling (phone cases, cables) ?40 k stock, ?15 k ads 25 % net margin on ?2 L monthly sales = ?50 k

Weekend print-on-demand & personalised gifting kiosk ?45 k heat-press kit (other options are there too) ?300 profit per mug × 200 pcs → ?60 k Bring Your Mug - Take Away Memories.

Local social-media management for clinics & salons ?0 gear, ?3 k Canva Pro ?8 k-?12 k per client; 6 clients hit target

None need heavy staff or rent. All can run beside your day job.

Set one simple goal: ?15 k profit by Day-30.
Hit it twice, raise target to ?35 k. Only when side income beats salary three months straight do you quit.

This is critical - Plug leaks early. Refinance personal loan to longer tenor; shave EMI to ~?10 k.

Park 1 L of savings in an emergency account—no touch.Skill up tiny, daily.
Watch a YouTube on ad copy, take a WhatsApp course on GST filings. Low cost, immediate payback.

Start small, sell fast, reinvest every rupee. Freedom comes, but by steps, not by one loud jump.

...Read more

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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