Hello Sir,
I have started investing in sip from last month's and investing around 65k per month in 7 mutual funds which includes Nippon small cap,quant small cap, quant mid cap, Edelweiss balanced fund, canara robeco bluechip ,HDFC nifty 50 and Parag parikh flexi cap.
As I want to make a Corpus of 1 crore in next 7-10 years is it good to continue with these funds or I need to do some changes. Please advise
Ans: Your initiative to start SIPs and invest ?65,000 monthly is commendable. At 7-10 years, achieving a corpus of ?1 crore is a realistic goal. Let's review your current funds and see if any adjustments are needed.
Current Fund Analysis
Nippon Small Cap and Quant Small Cap
Small cap funds offer high growth potential but are volatile. Holding two small cap funds increases risk. Diversifying to other categories can balance this risk.
Quant Mid Cap
Mid cap funds balance growth and stability. They are less volatile than small cap funds. This fund adds valuable diversity to your portfolio.
Edelweiss Balanced Fund
Balanced funds, also known as hybrid funds, invest in equity and debt. They provide stability and moderate growth. This is a good choice for risk management.
Canara Robeco Bluechip Fund
Large cap funds invest in well-established companies. They offer stability and steady returns. This fund adds a layer of safety to your portfolio.
HDFC Nifty 50
Nifty 50 index funds track the performance of the Nifty 50 index. However, actively managed funds often outperform index funds. Consider switching to an actively managed large cap fund.
Parag Parikh Flexi Cap Fund
Flexi cap funds invest across market capitalizations. They provide flexibility and diversification. This is a strong choice for a long-term portfolio.
Diversification and Risk Management
Diversification is crucial to managing risk. Your portfolio should balance growth and stability. Small cap funds should not dominate your portfolio. Consider reducing exposure to small caps.
Advantages of Actively Managed Funds
Actively managed funds adjust to market conditions. Fund managers seek opportunities for higher returns. This can outperform passive index funds like HDFC Nifty 50.
Regular Review and Adjustment
Regular reviews ensure your investments align with goals. Adjustments may be necessary as market conditions change. Consulting a Certified Financial Planner can provide personalized advice.
Investment Strategy for Corpus Growth
Reduce Small Cap Exposure
Keep only one small cap fund.
Diversify remaining investment into other categories.
Increase Large Cap and Balanced Fund Allocation
Allocate more to large cap and balanced funds.
These funds provide stability and steady growth.
Consider Multi Cap Funds
Multi cap funds invest in large, mid, and small caps.
They offer balanced growth and risk management.
Switch from Index Fund to Actively Managed Fund
Consider an actively managed large cap fund.
These funds aim to outperform the market index.
Empathy and Understanding
Your dedication to securing your financial future is admirable. Balancing growth and stability in your portfolio shows wisdom. Your goal of ?1 crore is achievable with the right strategy.
Conclusion
Your current mutual fund investments are strong. However, reducing small cap exposure and adding more large cap and balanced funds can enhance stability and growth. Regularly review and adjust your portfolio. Consulting with a Certified Financial Planner can provide tailored advice. Your commitment to investing wisely will ensure you achieve your financial goals.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
