Hi, I am 35 years old with following SIP portfolio with current total SIP of INR 24k. I plan to increase investment by 20% every year and have a target of 3 crores in next 15 years.
I need to know if below mix of funds in portfolio has the right balance and can help achieve the target and if there is a change required.
2500 (since Jun’19) - SBI Technology Opportunities Fund - Regular Plan - Gr
3000 (since Jun’19) - Mirae Asset Emerging Bluechip Fund - Gr
5000 (since May’19) - Kotak Standard Multicap Fund - Gr
5500 (since Oct’18) - ICICI Prudential Bluechip Fund - Gr
3000 (since Aug’15) - Franklin Build India Fund - Gr
3000 (since Aug’15) - Canara Robeco Emerging Equities Fund - Gr
2000 (since Aug’18) - Axis Equity Hybrid Fund - Gr
Hi,
These are just too many funds and may lead to over diversification. I estimate underlying individual stocks in these many funds will cross 200 easily. I would suggest a max of 3 good multicap funds across three different fund houses (1 each). Please explore ICICI Multicap, PPFAS Long term equity, Motilal 35, Franklin multicap, HDFC Multicap or Kotal Multicap (Any three from these).
Taking sectoral call or market cap size call is up to the fund manager, not on us.
Sorry for unrelated question to the thread but related to the topic.
Could you please suggest other reliable platforms like CAMS (this doesn’t have few good fund houses ) which facilitate MF investing (Direct Plan) for multiple fund houses via single login ?
This helps to track investments in a single place.
If we able to take out all the top 50 stocks from each fund and compare with other funds of your selection then we can avoid mirroring the same fund which leads to more expense ration and fees etc. I think if u can distribute that 24K into 3-4 funds with correct diversification then it should be good enough as your time horizon is 15 years. And I feel with more than 10 years target we can go for small cap funds as well, that would be a good bet I feel.
From above list I own Kotak multicap from last 3 years and it’s top performing in my PF.
Thanks for the reply and your suggestions… Maybe I will keep 2 Large Cap Blue Chip, 1-2 Multicap & 2 Mid-Small caps (Franklin India & Canara Robeco as they are in portfolio for 4+ years). But will revisit and revise in a few months or whenever have a positive return from the ones I plan to exit. Hope that should suffice the realignment approach… Can you tell me more on Sectoral funds and do I have more exposure to them than required ? Can you specify those funds for me please ?
Mirae Asset Emerging Bluechip you can increase corpus.
Look at SBI Small Cap Fund (excellent performance vs other small cap funds), restricted investment to 25k per PAN like mirae asset Emerging Bluechip.
As your vision is 15 years … you may want to do 50% in two funds and ride. After 10 years you may shift to Large cap. Long period mid/small cap gives highest CAGR.
On what basis have you decided the individuals fund names and the amount. While historical performance is important but not a reflection of future performance.
You need to think through in more detail since you are young and have a savings life span of another 20-25 yrs ahead of you.
The returns reported in most of the sites are annualized returns. In addition to looking at these historical returns, I also look at rolling returns over the past 5~10 years to get an idea of how volatile the returns are. https://www.advisorkhoj.com/mutual-funds-research/rolling-returns
I am guessing everybody these days would know what a SIP is. It’s a Systematic Investment Plan. It is an investment route offered by Mutual Funds wherein one can invest a fixed amount in a Mutual Fund scheme at regular intervals– say once a month or once a quarter, instead of making a lump-sum investment. You can start creating wealth with as small an amount as Rs. 100 (depending upon the scheme and AMC). It’s a convenient method of investment as it allows for you to give your bank a standing instruction to debit the amount on a particular date of the month or quarter. The facility of Daily SIPs is also available in certain funds.
Everybody is aware of the advantages that SIPs offer. The advantages would include not worrying about market volatility (as against Direct Equity investments). It would mean consistent investing that too for the long term.
Now, I would like to focus on what can investors do more in order to Generate Wealth through Equity Mutual Funds.
My personal approach is to start diversifying your SIPs based on Market Capitalizations. The starting point would be a Nifty 50 Index plan which is a passive mutual fund. This would replicate returns on Nifty 50 which would give you moderate return with a very low risk. The next step would be to go for a Large Cap Active Fund which might give you better returns than Nifty 50 index plan if the right companies are chosen. The step after that would be to go for a Midcap/Small Cap fund which will not always give you the best returns but will definitely help you grow your long term wealth.
A Multicap Fund can also be chosen which will cover all Market Capitalizations in one fund.
My personal belief is that a Gold Fund should also be included. In India, gold is considered to be the most auspicious and reliable investment. Investing in Gold directly is not always possible as it required huge capital investment. A small SIP in a Gold Fund would help you make the most of the rising gold prices in the economy.
A sector fund would be a very risky investment as you would be putting all your eggs in one basket. If you feel that a particular sector is likely to grow in the future, then it would be a good idea to start an SIP in a sector fund. (This is very difficult to predict though). Same is the case with Thematic Funds.
I explained what type of funds you should start an SIP in. Now I will explain how you should go about this SIP journey.
Start as Early as possible. The earlier, the better.
Goal Based SIPs are also an option. For short term goals (6 months to 3 years), you can invest in debt funds. For long-term goals, an SIP in Equity Funds (3 years and above) would be better. You can also go for Hybrid funds which are a mix of Equity and Debt.
For Tax saving, go for an ELSS fund.
Diversifying is important so including an International Fund will also help.
As and when time passes by, you should always increase your amount of SIPs. A 5-10% increase in your SIP amount will help you create a bigger corpus for better returns.
Reviewing and Rebalancing are very important. Getting out of the under performers & re-investing them in a better fund is more important than waiting for them to perform and then get out of it.
Risk reduction near to your goal is very important so that you do not lose out on your returns.
All these are general guidelines. But its always better to take help of an Investment Adviser who has better knowledge on the investments part. (This is where somebody like me comes in :P). An Investment adviser will help you select a fund which is best suited for your return/risk profile along with current market conditions. They will also be able to help you advice on when to switch between funds to get better returns. It is very necessary to keep track of market dynamics. For e.g. if a fall is expected in the equity markets, then the investment advisor will advise you to increase your SIP amount (if it’s possible by the client).
