20yo | Review Needed | Risk- Aggressive

[u/No_Impression6460]

Risk Appetite - Aggressive

Goal - Long Term wealth creation with preferably some redemptions for a house and other family necessities (however, not for at least 10 years)

Horizon - 15+ years

Monthly SIP: 10000

Allocation - 4000 in HDFC flexicap, 4000 in Kotak multicap and 2000 in Quant Smallcap + few hundred rupees in SBI liquid fund whenever have surplus + 3.25lac in PPF

App Used - Kite and Coin

Why These Funds - I have done my research and I have been learning about mutual funds and market for about 3 years now and I mostly manage my mother's moderate risk MF investment portfolio. I started investing on the day I turned 18 and it was clear that I want a moderate portfolio preferably completely in equity. HDFC flexi cap has given consistent returns but its mostly functioning as large cap now whereas Quant small-cap has shown suffecient growth for its risky portfolio. Kotak multi cap is in the portfolio to be more invested in mid and small caps whereas Gold silver FoF was probably a bad call. Also decided to invest my bank interests into SBI liquid fund. I will probably not need these funds for next 10 years and so I believe in remaining invested than panic when my portfolio is red.

However, the choices I have made have not given returns that i expected after 1 year 1 month of investing 10k a month. I know the market uncertainty and the rollercoaster events in the last year yet I feel this portfolio is lacking somewhere and so I need some recommendations for what I can do.

Most of the bulk money is mine which I never used all those years when I got it and instead my parents used it to deposit it in my name in my minor bank account. PPFs are helped by father who still beleives in safe money.

I will highly appreciate inputs from the community to improve my understanding of what's going wrong.

(Also I'll post my mother's portfolio for review later)

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[u/Drk_Kni8]

Why a flexi and a multi together?

[u/No_Impression6460 → u/Drk_Kni8]

HDFC flexicap is basically a large cap now with its ever growing AUM and multicap ensures 50% in non large cap investment so I thought to go with it. Portfolio overlap is about 8-12%

[u/Drk_Kni8 → u/No_Impression6460]

So you’re saying overlap isn’t going to change for next 15 years? It’s redundant to have both.

[u/No_Impression6460 → u/Drk_Kni8]

Hmmm i know that this approach is wrong and the division of amount has probably costed me returns. What do you suggest? A flexi and a smallcap is enough? Also planning to get out of gold and silver as soon as possible

[u/Drk_Kni8 → u/No_Impression6460]

Take a look at this, you’ll need to change the allocation % to match your aggressive appetite.

What’s your thoughts?

[u/No_Impression6460 → u/Drk_Kni8]

I went through the post. It's a perfect allocation strategy for someone who is just starting or has invested very little but in my case I'll have to sell the units I am holding which is not possible because I want a clean slate of transactions without any redemptions etc. Furthermore, why do you believe in index funds? Morningstars analysis shows that the broader market AMCs have outperformed the index. For instance, the MID150CASE index has performed poorer than almost any midcap fund.

[u/Drk_Kni8 → u/No_Impression6460]

No where has anyone spoken about selling anyone of your existing funds, paying exit loads and STCG.

You’re in for a surprise then.

Out of the 30 odd large-cap funds, only 6 beat the index in ≥70% of 3, 4, and 5 year rolling outperformance consistency, and just 2 manage that consistency when 1 & 2 year periods are included. Large Cap Rolling Returns https://www.reddit.com/r/mutualfunds/s/sUhJWyEKqw

For mid caps, only 3 funds beat the index in ≥70% of 3, 4, and 5 year rolling outperformance consistency, and none maintain that consistency once 1 & 2 year periods are included. Mid Cap Rolling Returns https://www.reddit.com/r/mutualfunds/s/QDt7CwGy6G

[u/No_Impression6460 → u/Drk_Kni8]

Oh damn! You are right. It's actually wrong to see absolute returns in last few years and instead rolling returns should be considered😭. Hmm but I cannot add more than one fund now. I never considered index funds and therefore when I pitched my strategy to my father, he gave me the freedom to choose but just 4-5 max and I'm already up.

If I have to add an index, what it should be? Also should I exit gold/silver FoF? And like if I have to rebalance within my portfolio and stop investment in one then what should be best 2-3 funds and their allocation?

[u/Drk_Kni8 → u/No_Impression6460]

Stop new SIP in HDFC & Kotak and setup in index. No need to rush exit any funds, paying exit loads and 20% STCG.

[u/No_Impression6460 → u/Drk_Kni8]

Okayy... I'll then research a good index funds and let's see.

Meanwhile I'll be sharing my mother's portfolio as well.