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Economic Times
07-05-2025
- Business
- Economic Times
Aiming for Rs 2 crore in 5 years? Your SIP strategy may be riskier than you think
Sanjeev from Pune aims for a Rs 2 crore corpus in five years through a Rs 1.27 lakh monthly SIP. However, a financial expert flagged his portfolio's overexposure to small- and mid-cap funds, constituting 67% of his investments. The expert recommended a more balanced asset allocation, suggesting diversification into safer, diversified equity funds to mitigate risk and ensure long-term stability. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Overexposure to Small- and Mid-Cap Funds: A Red Flag A Need for Balanced Asset Allocation Tired of too many ads? Remove Ads Diversifying for Stability and Long-Term Growth In today's era of rising financial awareness, many investors are taking charge of their wealth creation journeys through disciplined SIPs and diversified mutual fund in the pursuit of faster growth, some portfolios become lopsided, leaning too heavily toward high-risk segments. This imbalance, if unchecked, can hinder long-term goals despite strong intent and a recent episode of The Money Show on ET Now, Sanjeev, a focused investor from Pune, reached out for expert guidance on his mutual fund portfolio With a substantial monthly SIP of Rs 1.27 lakh, Sanjeev is aiming to build a corpus of Rs 2 crore in five the investment commitment is commendable, the underlying asset allocation raised red Sanjeev's portfolio , financial expert Shweta Rajani of Anand Rathi Wealth highlighted a critical issue — nearly 67% of his investments were channeled into small- and mid-cap included funds like Axis Smallcap, Nippon Smallcap, Quant Smallcap, SBI Magnum Midcap, HDFC Midcap Opportunities, and Motilal Oswal Midcap. While such funds have historically delivered impressive returns, Rajani cautioned against an excessively aggressive and mid-cap stocks are inherently more volatile and sensitive to market cycles compared to their large-cap bullish phases, they can outperform, but they are also the first to fall when markets turn turbulent. An overexposure to these segments can jeopardize portfolio stability, especially if the investor's goals are time-bound and recommended that a more prudent allocation to small- and mid-caps should not exceed 40–45% of the overall equity portfolio. This provides the necessary exposure to growth without compromising on downside Sanjeev's case, a heavy tilt towards riskier segments could create unnecessary stress on the portfolio, particularly if markets become volatile over the next few mitigate this risk, she advised stopping SIPs in funds such as Axis Smallcap, Quant Smallcap, SBI Magnum Midcap, and HDFC Multicap. Additionally, she suggested exiting from the hybrid ICICI Prudential Equity & Debt Fund, which may not be necessary given Sanjeev's high equity allocation and clear growth safer alternatives, Rajani recommended reallocating to diversified and contra-style equity funds that can provide a broader market exposure with relatively lower risk. These include:These funds can help maintain a balanced approach by investing across market capitalizations and strategies, helping cushion against sharp corrections in any one segment.: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
Time of India
07-05-2025
- Business
- Time of India
Aiming for Rs 2 crore in 5 years? Your SIP strategy may be riskier than you think
Play Video Pause Skip Backward Skip Forward Unmute Current Time 0:00 / Duration 0:00 Loaded : 0% 0:00 Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 Picture-in-Picture Fullscreen This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Text Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Transparent Caption Area Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Drop shadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Overexposure to Small- and Mid-Cap Funds: A Red Flag A Need for Balanced Asset Allocation Diversifying for Stability and Long-Term Growth In today's era of rising financial awareness, many investors are taking charge of their wealth creation journeys through disciplined SIPs and diversified mutual fund in the pursuit of faster growth, some portfolios become lopsided, leaning too heavily toward high-risk segments. This imbalance, if unchecked, can hinder long-term goals despite strong intent and a recent episode of The Money Show on ET Now, Sanjeev, a focused investor from Pune, reached out for expert guidance on his mutual fund portfolio With a substantial monthly SIP of Rs 1.27 lakh, Sanjeev is aiming to build a corpus of Rs 2 crore in five the investment commitment is commendable, the underlying asset allocation raised red Sanjeev's portfolio, financial expert Shweta Rajani of Anand Rathi Wealth highlighted a critical issue — nearly 67% of his investments were channeled into small- and mid-cap included funds like Axis Smallcap, Nippon Smallcap, Quant Smallcap, SBI Magnum Midcap, HDFC Midcap Opportunities, and Motilal Oswal Midcap. While such funds have historically delivered impressive returns, Rajani cautioned against an excessively aggressive and mid-cap stocks are inherently more volatile and sensitive to market cycles compared to their large-cap bullish phases, they can outperform, but they are also the first to fall when markets turn turbulent. An overexposure to these segments can jeopardize portfolio stability, especially if the investor's goals are time-bound and recommended that a more prudent allocation to small- and mid-caps should not exceed 40–45% of the overall equity portfolio . This provides the necessary exposure to growth without compromising on downside Sanjeev's case, a heavy tilt towards riskier segments could create unnecessary stress on the portfolio, particularly if markets become volatile over the next few mitigate this risk, she advised stopping SIPs in funds such as Axis Smallcap, Quant Smallcap, SBI Magnum Midcap, and HDFC Multicap. Additionally, she suggested exiting from the hybrid ICICI Prudential Equity & Debt Fund, which may not be necessary given Sanjeev's high equity allocation and clear growth safer alternatives, Rajani recommended reallocating to diversified and contra-style equity funds that can provide a broader market exposure with relatively lower risk. These include:These funds can help maintain a balanced approach by investing across market capitalizations and strategies, helping cushion against sharp corrections in any one segment.: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
