Mutual Fund Corner: All your queries answered

A: I would stop SIP in Motilal Oswal Focused 35 and start a SIP in Mirae Asset India Opportunities Fund, which is also in multicap category. Rest two small cap funds you are doing is fine now. When you increase your SIP, then look at a large cap fund like ICICI Prudential Bluechip Fund as it would balance your portfolio. To achieve your target of Rs 6 crore, Rs 7,000 SIP at 20 percent for 25 years will achieve that. But if you increase to Rs 10,000 monthly, the returns would fall to around 18 percent to achieve in same time period.  But I would say expect an average of 15 percent returns over longer periods.

A: All your investments seem to have been taken for tax saving purposes except for ICICI Value Discovery and some shares you are holding. Your NPS and PPF investments, you should carry on as in PPF you would get fixed returns of around 8.5 percent and NPS you have taken for tax purposes, which is similar to a balanced mutual fund. Your PPF and NPS would grow to around Rs 36 lakh and Rs 18 lakh respectively over 15 years. To achieve Rs 10 crore, you would have to save around Rs 70,000 per monthly for 20 years. I have assumed the funds and shares to grow at an average of 15 percent. This can be a combination of large cap, multicap fund and quality equity shares.

A: Rs 40,000 month for 15 years at 15 percent growth gives you a corpus of Rs 2.7 crore after 15 years. Since your goal is long term, I would suggest to stop SIP and exit ICICI Corporate Bond and HDFC Short Term Debt Funds as these are pure debt funds and would return only 7-8 percent and look at balanced advantage funds that invest 40-80 percent equity and balance debt like HDFC Balanced Advantage Fund and ICICI Balanced Advantage Fund. If you want to keep some portion, you can keep in pure debt then look at FMP's or liquid funds.

A: You have selected one large, multicap, midcap and small cap fund, so diversification is okay. My recommendation us you can start SIP in Mirae Asset India Equity Fund and Axis Focused 25 Fund, Sundaram Rural and Consumption Fund.

A: Split between one large cap, (ICICI Bluechip Fund), one multicap (Axis Focused 25 Fund) and one midcap Fund (HDFC Small Cap Fund). Since markets are high, you can put into liquid fund and do a Systematic Transfer Plan (STP) on weekly basis of around Rs 5,000 over 6-9 months period to balance your risk.

A: I would avoid sector funds like Tata Digital India and Tata Banking Fund. Axis Bluechip is largecap, Axis Focus 25 and UTI Equity, Axis Multicap are multicap funds. You can invest in Axis Bluechip, Axis Focus 25 and UTI Equity.

A: Past data has shown that there is not too much difference in SIP returns of largecap and midcap funds over longer time periods. So, I would recommend one large cap,(ICICI Bluechip Fund) two multicap funds (Axis Focused 25 Fund), Mirae Asset India Equity Fund and one Midcap Fund (HDFC Small Cap Fund).

A: Kotak Select Focus name has now changed to Kotak Standard Multicap Fund and is one of best performing multicap funds over last 10 years. Kotak Classic Equity Fund name has changed to Kotak India Equity Contra Fund and now follows a contrarian approach. Fund manager may buy stocks, which may not be in favour now and are fundamentally quality companies that may bounce back at the later stage and that's why the fund manager has a view different from the current market dynamics. Example: Benchmark index has 35 percent exposure to financials, whereas fund has only 20 percent. Similarly, for IT benchmark is 9 percent, whereas fund has 16 percent in IT as he feels IT will do well.

A: You can look at a multicap fund like Axis Focus 25 Fund or Kotak Standard Multicap Fund instead of MNC Fund as per your current fund holding. After 40 Years, you can reduce samll or midcap exposure to 20-25 percent instead of 60 percent and add balanced funds like Mirae Asset Hybrid Equity Fund and ICICI Balanced Advantage Fund to reduce your risk.

A: Kotak Standard Multicap is an equity fund and the net asset value (NAV) will go up and down as per the stock market. As you require the funds for marriage, it would be advisable to withdraw Rs 15 lakh and put the same into a liquid fund earning and you get 6-7 percent annum interest. As and when the money is required, you can withdraw the amounts as per your requirement.