Hi sir, please advice whether my current monthly SIPs (total: 50,000/-) are fine or need any changes required to build wealth of 2Cr in next 10 years.
1. HDFC balanced Advantage - 10,000
2. HDFC Defence - 2,500
3. Kotak Infrastructure- 5,000
4. Kotak BSE PSU Index - 2,500
5. Kotak Multicap - 7,500
6. Motilal Oswal Multicap - 7,500
7. Motilal Oswal Midcap - 2,500
8. Motilal Oswal Largecap - 5,000
9. Nippon Small Cap - 2,500
10. Nippon Large Cap - 5,000
Ans: Current SIP Portfolio Overview
Total Monthly SIP: Rs 50,000
HDFC Balanced Advantage: Rs 10,000
HDFC Defence: Rs 2,500
Kotak Infrastructure: Rs 5,000
Kotak BSE PSU Index: Rs 2,500
Kotak Multicap: Rs 7,500
Motilal Oswal Multicap: Rs 7,500
Motilal Oswal Midcap: Rs 2,500
Motilal Oswal Largecap: Rs 5,000
Nippon Small Cap: Rs 2,500
Nippon Large Cap: Rs 5,000
You aim to build a wealth of Rs 2 crore in the next 10 years. Let's assess and suggest a strategy to achieve this goal.
Assessment of Current SIP Portfolio
Balanced Funds
The HDFC Balanced Advantage fund provides stability and moderate growth. Balanced funds are a good choice for risk management.
Sector Funds
You have sector funds like HDFC Defence and Kotak Infrastructure. Sector funds are riskier due to their focus on specific sectors. They can be volatile and may not provide consistent returns.
Index Funds
You have Kotak BSE PSU Index fund. Index funds are passively managed and may not outperform the market. Actively managed funds offer better growth potential.
Multicap Funds
Kotak Multicap and Motilal Oswal Multicap funds offer diversification across market caps. These funds can provide balanced growth.
Midcap and Small Cap Funds
Motilal Oswal Midcap and Nippon Small Cap funds are high-risk, high-reward options. They can provide significant growth but also come with higher volatility.
Large Cap Funds
Motilal Oswal Largecap and Nippon Large Cap funds offer stability and steady growth. Large cap funds are essential for a balanced portfolio.
Recommendations for Portfolio Improvement
Reduce Sector Fund Exposure
Consider reducing or consolidating sector fund investments. They carry higher risks and can be volatile.
Focus on Actively Managed Funds
Replace the Kotak BSE PSU Index fund with an actively managed fund. Actively managed funds aim to outperform the market and provide better returns.
Increase Diversification
Ensure your portfolio is well-diversified. Consider adding more diversified equity funds for balanced growth.
Consolidate Investments
Consolidate similar investments to avoid over-diversification. This helps in better management and monitoring of the portfolio.
Increase SIP Amount Gradually
If possible, gradually increase your SIP amount. Even a small increase can significantly impact long-term growth.
Final Insights
Your current SIP portfolio is well-structured but can be optimized further.
Reduce sector fund exposure for lower risk.
Replace index funds with actively managed funds for better growth.
Ensure proper diversification and consider consolidating similar investments.
Gradually increase your SIP amount for enhanced growth.
By making these adjustments, you can achieve your goal of Rs 2 crore in the next 10 years. Regularly review your portfolio and seek guidance from a Certified Financial Planner for personalized advice.
Best Regards,
K. Ramalingam, MBA, CFP
Chief Financial Planner
www.holisticinvestment.in
