Hi Ulhas ... I am investing in below mutual fund as SIP every month for long term like 10 years to built a significant corpus. Kindly let me know if these funds are good ? Any good suggestion on diversification and how much corpus i can expect in 10 years. Apart from that i have investment in PPF , Sukanya samridhi yojana, NPS etc.
1. Parag parikh flexi cap fund - 10000 rs.
2. UTI Nifty 50 fund - 3000 rs.
3. quant mid cap fund - 4000 rs.
4. quant small cap fund - 2500 rs.
5. Mirae asset large and mid cap fund - 4000 rs.
Ans: Evaluating Your Current SIP Investments
Your current investment strategy includes a mix of large-cap, mid-cap, and small-cap funds. This diversified approach is commendable.
Parag Parikh Flexi Cap Fund: Flexi cap funds are versatile. They invest across market capitalisations, offering good potential for growth.
UTI Nifty 50 Fund: This is an index fund. It tracks the Nifty 50 index, providing stable returns. However, it lacks flexibility compared to actively managed funds.
Quant Mid Cap Fund: Mid-cap funds offer higher growth potential. They are suitable for long-term wealth creation.
Quant Small Cap Fund: Small-cap funds can deliver significant returns. They are riskier but beneficial for long-term goals.
Mirae Asset Large and Mid Cap Fund: This fund balances stability and growth. It invests in both large and mid-cap stocks.
Suggestions for Diversification
Your portfolio already has a good mix. Here are some suggestions for further diversification:
Balanced Allocation: Ensure a balanced allocation across different market caps. Avoid over-concentration in any single category.
Sectoral Funds: Consider adding sectoral funds. They invest in specific sectors, offering diversification across industries.
Aggressive Hybrid Funds: These funds provide a mix of equity and debt. They balance risk and reward.
Benefits of Actively Managed Funds
Flexibility: Actively managed funds adapt to market changes. They can outperform passive index funds.
Strategic Management: Fund managers make informed decisions. They aim to maximise returns while managing risks.
Disadvantages of Index Funds:
No Flexibility: Index funds cannot adapt to market conditions. They simply replicate the index.
Limited Potential: They often provide average returns. They do not outperform the market.
Direct Funds vs. Regular Funds
Disadvantages of Direct Funds:
Lack of Guidance: Direct funds do not offer professional advice. You might miss strategic insights.
Benefits of Regular Funds:
Professional Advice: Investing through a Certified Financial Planner (CFP) ensures expert guidance.
Comprehensive Service: Regular funds provide portfolio management and financial planning.
Estimating Your Corpus in 10 Years
Based on your current SIPs, let's estimate your potential corpus in 10 years:
Parag Parikh Flexi Cap Fund: Rs. 10,000 per month
UTI Nifty 50 Fund: Rs. 3,000 per month
Quant Mid Cap Fund: Rs. 4,000 per month
Quant Small Cap Fund: Rs. 2,500 per month
Mirae Asset Large and Mid Cap Fund: Rs. 4,000 per month
Assuming an average annual return of 12-15%, your investments could grow significantly. However, this is an estimate. Actual returns may vary based on market conditions.
Additional Investment Options
Balanced Advantage Funds: These funds dynamically adjust their allocation between equity and debt. They manage risk effectively.
International Funds: Consider international funds for global exposure. They diversify your portfolio beyond domestic markets.
Final Insights
Your current SIP strategy is well-diversified and aligned with long-term wealth creation. Consider adding sectoral and balanced advantage funds for further diversification. Actively managed funds provide flexibility and strategic management. Avoid over-reliance on index funds. Review your portfolio regularly and seek professional guidance for optimal results.
Best Regards,
K. Ramalingam, MBA, CFP
Chief Financial Planner,
www.holisticinvestment.in
