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'MF Guru: Do I need more MF diversification?'

January 12, 2023 09:54 IST

Ulhas Joshi, Head -- Sales, Rank MF, (external link) a mutual fund investment platform, answers your Mutual Fund queries.

Kindly note: Mr Ulhas Joshi will answer your mutual fund queries instead of Mr Omkeshwar Singh.

MF guru

Illustration: Dominic Xavier/Rediff.com
 

Mukul Sethi: I am 24 and I am planning to start SIPs in the following funds.

Quant Tax Plan Direct Growth -- 10,600

Tata Small Cap Fund -- 9,405

ICICI Pru Dividend Yield Equity Fund -- 5,985

ICICI Pru Nifty Index Fund -- 5,130

DSP Nifty Next 50 Index Fund -- 5,130

ABSL Nifty SDL+PSU 60:40 Index -- Sep'26 -- 5,130

ICICI Pru Credit Risk Fund -- 3,420

I'll be stepping up my SIPs by about 15 per cent every year.Would you recommend any changes? What would be the approximate size of my corpus after 20 years?

Ulhas Joshi: Index funds are good options for developed markets. Indian markets are still in the developing market stage. You can opt for below funds instead of index funds:

  1. UTI Flexicap Fund with Rs 5,000 SIP
  2. PPFAS Flexicap Fund with Rs 5,000 SIP
  3. Samco Flexicap Fund with Rs 5,000 SIP

Assuming 12 per cent XIRR with a 15 per cent annual step-up increment to your SIPs for 20 years, you can create a corpus of around Rs 4.2 Crore.

 

Mitesh Gupta: I am 42 years old and I am looking to build a corpus of 15 Cr in the next 15 years through SIP The current value of my funds is 70 lakh plus. Currently my monthly SIP value is Rs 62500.

The funds currently in which I am investing in SIP mode are as follows:

1. SBI Small cap fund Rs 10000

2. Mirae Asset Emerging Bluechip fund -- Rs 10000

3. Motilal Oswal focussed 25 -- Rs 6000

4. Para Parikh Flexi cap fund -- Rs 9000

5. SBI equity Hybrid Fund -- Rs 9000

6. SBI Focussed Equity Fund -Rs 6500

7. Canara Robeco Emerging Equities -- Rs 6000

8. Axis Mid cap fund -- Rs 6000

I am also investing around Rs 75000 to 1 lakh annually divided in funds such as ICICI Pru Bluechip fund, Quant large and midcap fund, ICICI Pru equity and debt fund, PGIM India Mid Cap Opp Fund and Quant Absolute fund. Please do suggest will it help me to achieve my target of 15 crores in the next 15 years.

Ulhas Joshi: To achieve your goal of Rs 15 Crore, you need to double your SIPs and increment them by 15 per cent every year. Your scheme selection is good.

 

AKASH SINGHA ROY: Sir I have 15k. i want to invest it as a lump sum. i don't have any knowledge in mf. i want to invest it for min 10 years and i am willing to take any risk. so please suggest me one or two mf (whichever is best) for investment which will give me highest return after min 10 years.

Ulhas Joshi: Predicting the highest return generating scheme is difficult. You can consider UTI Flexicap Fund-Growth Option for 10 years.

 

Vineet Sharma: Hope you are doing well. I am 41 years old and started investments in Mutual funds from 2014 and started SIPs in following funds.

1. HDFC Tax Saver Growth -- Rs 2000

2. Nippon India Tax Saver (ELSS) fund Growth plan growth option -- Rs 1500

3. UTI retirement benefit pension fund regular plan growth -- Rs 1500

From May 2021, I purchased and started other SIP's in the following funds.

1. HDFC Small Cap fund direct plan growth -- Rs 2000

2. SBI small cap fund direct growth -- Rs 2000

2. SBI Blue Chip fund direct plan growth -- Rs 5000

3. Mirae Asset Emerging Blue Chip fund direct plan growth -- Rs 2500

Recently in this month Dec 2022 I started other SIP's in following funds.

1. SBI small cap fund direct growth -- Rs 3000

2. Nippon India small cap fund direct growth plan growth option -- Rs 3000

3. ICICI Prudential Technology Direct Plan Growth -- Rs 3000

My question is do I need more diversification? Or are these investments enough to create Rs 10 Cr corpus at the time of retirement. Please guide. Thanks in advance for your suggestion.

Ulhas Joshi: You need double the SIP amounts and increment them by 15 per cent annually. You are investing in 9 schemes. You already have an over diversified portfolio. You can consolidate same category schemes.

 

K Jaganath Senapati: Here is my question:

Q1. I want you to review my current ongoing SIP funds and suggest in case of any corrections required.

Q2. I am 32, unmarried and working in the IT field and have had 79K/monthly SIP running since 2017. My plan is to have enough corpus to fulfill any kind of requirement that involves money. Like: my marriage expense, my retirement, House Purchase, vacation, etc.

Here are my MF fund details:

Active SIPs / Fund Name SIP Amount Per Month Start Date
Parag Parikh Flexi Cap Fund – Direct 3000 Aug 2021
3000 April 2021
5500 Aug 2020
1500 Nov 2019
2000 Jan 2019
2000 May 2018
1000 Feb. 2018
6000 Mar. 2022
PGIM India Flexi Cap Fund – Direct 10000 Sept. 2021
10000 Aug. 2022
Nippon India Small Cap Fund – Direct 2000 Oct. 2018
5000 Sept. 2022
Mirae Asset Emerging Bluechip Fund Direct Plan -- Growth Growth 1000 April. 2022
Mirae Assest Tax Saver Fund – Direct 2000 Aug 2022
Mirae Assest Tax Saver Fund – Direct 1500 Oct. 2017
Axis Bluechip Fund Direct 3000 Mar 2021
4000 Aug 2021
Axis Small Cap Fund -- Direct 1500 Feb 2022
1000 Feb 2022
4500 Mar 2022
UTI Nifty 50 Index Fund Direct Plan Growth 5000 July 2022
SIP via IND Money Amazon.com Inc. 5000 Dec 2022
     
Total Monthly SIP Amount 79500

Please do share your suggestions.

Ulhas Joshi: Your scheme selection is good. We recommend you to step up the SIP installments every year by 15 per cent.

 

Mohammad Aleemuddin: I'm 39 yrs old, need your advice, I want to start SIP in MF for long term. I select SBI small cap fund and SBI multi cap each @ 5k. I need your help. I need more returns and it will be secure. Or suggest which is the best one?

Ulhas Joshi: You can consider UTI Flexicap instead of SBI Multicap Fund. SBI Small Cap Fund is fine. Equity funds are subject to market risks and returns cannot be assured.

 

Parijat Kundu: I am 32 and recently started investing in SIPs. Currently I am investing 12k SIP every month in the following funds: 

  1. Canara Robeco Bluechip Equity Fund Direct Growth - -- 2000
  2. PGIM India Midcap Opportunities Fund Direct Growth - -- 1000
  3. IDBI Gold Direct Growth - -- 500
  4. Parag Parikh Flexi Cap Fund Direct Growth - -- 2000
  5. HDFC Index SandP BSE Sensex Direct Plan Growth - -- 500
  6. Nippon India Pharma Fund Direct Growth - -- 2000
  7. Quant Tax Plan Direct Growth - -- 2000
  8. Mirae Asset Tax Saver Fund Direct Growth - -- 2000

In addition to this, I am putting 1 lakh in PPF every year. 

Ulhas Joshi:You have decent funds but have over diversified scheme selection. Please consider consolidating similar category schemes.

To create a corpus of Rs 3 Crore in 15 years, you need to invest Rs 50,000 per month.

For SIP investments, XIRR is better for assessing performance.

 

Guru Rakshith: Hi I'm 27 and I have following investments:

NPS TIER 1 2500 monthly from past 6 months

NPW TIER 2 2500 monthly from past 6 months

TERM INSURANCE 2400 monthly from past 12 months

Health insurance 700 monthly from past 11 months

Post office insurance endorsement 3500 monthly for 25 years which gives 22 lakh from 11 months. I'm investing in this and want to know if it's good to continue this. And I have one sip for 1000 in SBI focused equity

My questions are:

1) Can you suggest me some mutual funds for 10 -- 20 years period in which I can invest 5000 monthly and increase by 10 per cent yearly?

Ulhas Joshi: You may consider a basket of:

UTI Flexicap -Growth

Motilal Oswal Midcap Fund-Growth

HDFC Business Cycle Fund-Growth

Samco Flexi Cap Fund-Growth

2) Can you tell me what amount will I collect for that period? 

Ulhas Joshi: For a SIP of Rs 5,000 and an annual increase of 10 per cent, your corpus can grow up to Rs 15 Lakh.

3) How much should I invest to create a retirement Corpus of 3 CR for 10 -- 20 years and the funds for the same?

Ulhas Joshi: You can do a SIP of Rs 25,000 for 20 years. You can consider investing in:

UTI Flexicap -Growth

Motilal Oswal Midcap Fund-Growth

HDFC Business Cycle Fund-Growth

Samco Flexi Cap Fund-Growth

 

Rajasekaran P: Dear sir, I’m 42 years old, and have been investing in Mutual Fund schemes for the last 12 years. I have generated 1.45 Crore in Equity schemes and 80 Lakh in Debt schemes so far. I have listed below my goals along with the investment details and the number of years left for each goal.

I'm planning to move the funds accumulated in Mirae Large Cap and Kotak Flexi Cap schemes out to other schemes. Would need your advice on mutual fund scheme selection, overall portfolio, and additional investments needed to reach all my goals?

One last question: Do you think I can invest some funds in Quant Mutual Fund? I heard that they have a different investment approach. Kindly advice.

Thank you in advance for your assistance!

Current MF Portfolio: Fund type Total investment Current Value Return per cent pa Current SIP
Mirae Asset Emerging Bluechip Equity -- Large and Mid cap 3,029,894 4,715,298 22 25,000
Nippon India Small Cap Equity -- Small Cap 1,847,203 4,086,324 26 25,000
Mirae Asset Large Cap Equity -- Large cap 1,896,760 2,639,949 19 Discontinued
Parag Parikh Flexi Cap Equity -- Flexi cap 1,124,944 1,141,809 2 70,000
Kotak Flexicap Equity -- Flexi cap 696,435 998,500 19 Discontinued
Kotak Nasdaq 100 FOF Equity -- Overseas 1,024,949 941,714 -12 25,000
HDFC Short Term Debt Debt 5,602,297 6,058,396 4  
Nippon India Liquid Debt 1,612,500 1,923,164 5  
Total   16,834,981 22,505,153 15 145,000
           
Goals Years to reach goal Goal amount Current Value    
Higher Education -- Child 1 4 6,000,000 5,000,000    
Higher Education -- Child 2 7 7,500,000 4,000,000    
Marriage -- Child 1 12 10,000,000 3,500,000    
Marriage -- Child 2 15 12,000,000 3,000,000    
Retirement 15 50,000,000 7,000,000    
Total   85,500,000 22,500,000    

Ulhas Joshi: You are investing in good schemes and should continue with your investments. Quant is a good and upcoming fund house with a differentiated strategy. You can start with 5 per cent to 10 per cent of your new allocation to Quant schemes.

 

Akshatha Ab: I am 32 years old. I am not a working woman but I have 2 lakh. I am new to mutual fund and stocks related things. I would like to know which MF or SIP is good to invest my amount and get 2 crore in 5 yrs.

Ulhas Joshi: To start with investing in mutual funds, you can consider investing in balanced advantage funds.

To create a corpus of Rs 2 Crore in 5 years, you need to have monthly SIPs of Rs 2.5 Lakh in equity schemes.

You can opt for:

Samco Flexicap Fund-Growth

UTI Flexicap Fund-Growth

PPFAS Flexicap Fund-Growth

The current 3 schemes are good. You need to consider increasing your monthly investments by Rs 50,000 to achieve your Rs 2 Crore goal.


Disclaimer: This article is meant for information purposes only. This article and information do not constitute a distribution, an endorsement, an investment advice, an offer to buy or sell or the solicitation of an offer to buy or sell any securities/schemes or any other financial products/investment products mentioned in this QnA or an attempt to influence the opinion or behaviour of the investors/recipients.

Any use of the information/any investment and investment related decisions of the investors/recipients are at their sole discretion and risk. Any advice herein is made on a general basis and does not take into account the specific investment objectives of the specific person or group of persons. Opinions expressed herein are subject to change without notice.

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ULHAS JOSHI