‘Do I need to rebalance my MF portfolio?’

Do you have mutual fund queries?

Please mail your questions to [email protected] with the subject line, Ask Nikunj, along with your name, and Nikunj Saraf, Vice President Choice Wealth, (external link), will answer your queries.

Madan Rao: Hi Sir, I am 38 years old and the following are my investment portfolio:

Kotak Mulitcap Fund (G) 1000/-
UTI -nifty 50 index Fund (G) 2000/-
AXIS Midcap Dund (G)3000/-
HDFC Top 100 Fund (G) 3000/-
Kotak Flexi cap fund (G) 2500/-
DSP Equity & Bond Fund (G) 3000/-
SBI Focused Equity Fund (G) 3000/-
AXIS Bluechip Fund (G) 2500/-

Please let me know if I need to change anything in the above list, I am investing in these Mutual funds for longer term and gains. 

Nikunj Saraf: Hello Madan Rao. Looking at your portfolio. I would advice reconsider your schemes of AXIS Bluechip Fund, HDFC Top 100 Fund & Kotak Flexi cap Fund to better alternative peer schemes.

 

Sandeep B: I am 36 years and working in the Private Sector. I am planning to achieve a corpus of 5 CR in the next 15 years. Have been investing in the below mutual funds for the past 3 years. Would like to get your suggestion/advice:

  • If the categories (diversification – small/Medium/Large/Flexi) invested in are good enough? Or additional categories would be required for a balanced portfolio.
  • Amount invested would suffice to achieve the goal or additional step-ups required? Any reallocation is required?
  • Have an additional amount of 5 Lakh. In which category/mutual fund can this be invested?

Thanks for your suggestion in advance!

Quant Tax Plan – Direct Growth (ELSS): 3000

Kotak Flexicap Fund – Direct Growth: 1500

Mirae Asset Emerging Bluechip Fund – Direct Growth: 2500

Mirae Asset Hybrid Equity Fund – Direct Growth: 4000

Quant small cap Fund -Direct Plan – Growth: 5000

ICICI Prudential Bluechip Fund Direct- Growth: 5000

Nikunj Saraf: Hi Sandeep B. It appears that your portfolio is in good shape. I recommend reconsidering Kotak AMC and switching to a better alternative peer scheme. Mid cap categories may be included in your portfolio.

For a corpus of 5 cr in 15 years, the sip will be 70k per month. Try adding on to current sips semiannually or annually if 70k isn’t possible.

For lump sum investment, you may consider Mirae Asset Hybrid Equity Fund, Quant small cap Fund and ICICI Prudential Bluechip Fund.

Prachi Gupta: I have recently gotten a lump sum amount of 10 lakh and will get 20-30L in the next 6 months. I have already invested around 10L in various hdfc mutual funds schemes randomly since 2015. Now I want to start SIP in other mutual funds keeping my daughter’s education and my retirement as my aim for building corpus.

I am a 37 years healthcare professional and my daughter is 7 years old. Kindly suggest some good schemes to invest in. How much amount should I invest through SIP monthly to build a corpus of 5 Cr in the next 20 years?

Nikunj Saraf: Hi Prachi. Considering your requirements, to achieve a corpus of 5 Cr you can start a sip of Rs. 37000 for next 20 years. For your portfolio, you may refer below mentioned schemes:

  • Nippon India Growth Fund
  • Kotak Small Cap Fund
  • PGIM India Flexicap Fund
  • ICICI Pru Bluechip Fund

Kevin Paulson: Hello Sir, I am 31 years old and just started my investments 3 months back (SIP) and in the beginning I invested the following amounts in the below mutual funds and the total investments as of now are:

1) Quant Multi Asset Fund – 4000
2) Quant Absolute Fund – 4000
3) Edelweiss Balanced Advantage Fund – 4000
4) ICICI Prudential Balanced Advantage Fund – 4000
5) ICICI Prudential Medium Term Bond Fund – 4000
6) Aditya Birla Sun Life Digital India Fund – 3500
7) Tata Digital India Fund – 3500
8) ICICI Prudential Technology Fund – 3500
9) Axis Strategic Bond Fund – 3000

After reevaluating my above investments I realised that this is not the correct mix and as a result I am going to modify my portfolio with the following changes. My investments are for a long time as I need to accumulate wealth.

ELSS –> Quant Tax Plan Direct Growth – 10000
Flexi Cap –> Quant Flexi Cap Direct Growth – 5000
Mid Cap — PGIM India Midcap Opportunities Direct Growth – 5000
ETMoney Genius — > 5000

Apart from above I am also investing in US stocks with an amount of 2000 per month

Please let me know if my above investments are appropriate or not and if there is any rebalancing or changes that needs to be made. Also I am planning to buy a house in the next 2-3 years so considering that I would need to make a down payment (20 – 25 Lakh) what all will be the changes required?

Nikunj Saraf: Hello Kevin Paulson. Your modified portfolio is finely chosen as per the market. Furthermore, I would advice to continue with Edelweiss &ICICI Prudential Balanced Advantage Fund sips as your goal in near future.

To achieve a goal of 20-25 lakh in 3 years, I would suggest increasing your sip to Rs 50,000. 

Bhuwan Bhatt: I am 31 year old and currently investing around 26K per month in mutual funds for the long term. It’s been almost 4-5 years since I am investing and also increasing the SIP amount 15-20% per year. My long term goals are children’s higher education which is 17-18 years away and to buy a house which is 4-5 years away. Please suggest if the MF schemes need to be changed for the required goals. Schemes are below:

  • ICICI Prudential Liquid Growth Direct Plan — 5000
  • Aditya Birla Sun Life Digital India Growth Direct Plan — 4000
  • Axis Long Term Equity Growth Direct Plan — 2000
  • HDFC Small Cap Growth Direct Plan — 2000
  • ICICI Prudential Technology Growth Direct Plan — 2000
  • ICICI Prudential Value Discovery Growth Direct Plan — 2000
  • L&T Midcap Growth Direct Plan — 2000
  • Mirae Asset Tax Saver Growth Direct Plan — 1000
  • Nippon India Gilt Securities Growth Direct Plan — 2000
  • SBI Blue Chip Growth Direct Plan — 2000
  • Tata Digital India Growth Direct Plan – 2000

Nikunj Saraf: Hello Bhuwan Bhatt. The portfolio seems to be over-diversified. It would be better to reconcise and reshuffle your portfolio. Based on the analysis of your portfolio, I recommend setting your schemes in accordance with your goals.

The mid, small, and flexi cap categories are suitable for child education. As far as house is concerned, you can consider value discovery, bluechip and elss schemes. HDFC and L&T AMC will be recommended for reconsideration.

Raviteja Natti: I am 30years old and a salaried class. My current Investments are around 23000 pm. My financial goal is a higher corpus for my retirement. I want to know how much corpus can be achieved from my investment. My investments are as follows:

Axis Long term equity-2000
Parag parikh flexi cap-3000
Kotak Tax saver Reg Growth-2000
Quant small cap fund-3000
SBI banking & financial services fund-2000
Quant infrastructure fund-2000
Quant tax plan direct Gr-2000
Tata small cap fund-1000
Kotak small cap fund-1000
Axis midcap direct plan-1000
BOI small cap fund-1000
Axis Small cap fund-1000
Canara robeco bluechip equity fund-1000
Quant absolute fund-1000
Dsp banking and Psu debt fund-1000
Icici prudential technology direct plan hr-1000

Please let me know if any changes to be made. Thanks in advance

Nikunj Saraf: Hello Raviteja Natti. There seems to be over-diversification in your portfolio, which may have a negative effect in the long run. AMCs like Parag Parikh, Tata, and BOI can be reconsidered for portfolios. Also, your portfolio needs to be reconcised and reshuffled. The number of schemes recommended per category is limited to two if there are few categories. Furthermore, with 23000 monthly sip, you may achieve a corpus of 53-60 lakh in 10 years with 12-14% CAGR.

Mohit Hooda: I’m 24 years old and looking to invest in mutual funds for at least 25 years. (I’m already invested in a few funds for 3 years, but going to reshuffle my entire portfolio as I want to stay invested for 25 years). I’ll start with 40k per month in mutual funds, and step up every year as well. I wouldn’t have to buy a house or a car in the near future (20+ years,) and don’t have any emi as well. I’m planning to investin:

1. 50% of my capital in index fund (Uti index fund) 

2. Parag Parekh flexi cap (25%) 

3. Axis small cap (25%). {Sbi and quant small caps are also a choice}

I invest monthly in my ppf and buy gold as well. (that takes care of my debt investment, i.e safe investment). 

Sir, As I’m planning on investing for 20+ years, I think I should invest higher amount in flexi and small cap, but on the other hand, if the funds underperform the nifty in the long term, I’d take a big hit. 

I’m super confused, idk what to do.Please guide me. Stay safe. 

Nikunj Saraf: Hi Mohit. 20 years is a long time horizon for funds to perform. Diversification plays an important role in your concern. While the selection is good, I would suggest that Parag Parikh AMC be reconsidered. Depending on the market, you can reallocate your portfolio every three years.

Praveen Sintre: I am 48-yr-old, looking for best investment plan where I can get compounding interest.

1. investing 10 lakh in one go for 10 yrs
2. investing 10 to 15k monthly for 5 yrs to 10 yrs

Please advice HDFC capital guarantee solution plan or any other plans.

Nikunj Saraf: Hi Praveen. It depends entirely on your investment mode. Both lump sum and sips are good. In comparison, sip facilitates the averaging out of risk and price per unit. With sip, retail investors can invest per month in small contributions, which simplifies consistency in investing.

Compared to lump sum, with 10 lakh invested one time, the difference in the accumulated corpus is not much for a ten-year horizon, with SIP 15k per month. In end sip is a better alternative for risk diversification and capital growth.

Padmesh Singh: Below is my sip per month of total (50000 inr per month). Is my selection good or need to be revised or replaced? I need corpus amount in 5 to 7 years.

Axis Small Cap Fund 10000

Canara Robeco BlueChip Equity Fund 10000

PGM India Midcap Opportunities Fund 5000

Quant Small Cap Fund 5000

Axis Bluechip Fund 10000

Parag Parikh Flexi Cap Equity 10000

Nikunj Saraf: Hi Padmesh. Although the selected schemes seem well chosen, there is an apparent overlap with the Axis AMC. Consequently, I recommend that you reconsider Axis Bluechip and Parag Parikh flexi cap fund to better peer schemes. You may achieve a corpus of 40-65 lakh in 5-7 years with 12% CAGR.

You can read more of Mr Saraf’s answers here

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