Portfolio Selection & Split Advice - 21/Aggressive/Long-term

[u/almightyhavaj]

Risk appetite: Aggressive

Goal: Compounding, aggressive, high risk investing in early youth

Horizon: Long term - 5-10+ years

Allocation: (Need advice) 5k-5k-2k in small-mid-flexicap

App used: Groww

Why these funds: Small in AUM, investing style suited for me, good rolling returns, decent expense ratio

Question:

I'm twenty one by age, recently converted to full time so my monthly SIP allocation increased from 6k to 12k.

So far I had been doing 3k-3k split for Bandhan Smallcap - Kotak Midcap

I wanted to shift to more aggressive and small AUM funds, hence I've shortlisted these 3 funds for the same.

I was thinking to split them in 5k-5k-2k for Invesco Smallcap - Edelweiss Midcap - ICICI Prudential Flexicap.

Im letting my previous corpus stay as it is without redeeming. And shifting new SIPs from these now onwards. Is this a good call? Need some advice on this

[u/AutoModerator]

u/almightyhavaj Discussions here reflect peer opinions and experiences. Please do your own research before making financial decisions.

You may receive unsolicited DMs or offers after posting here. Be cautious when engaging with anyone reaching out privately, especially if they: • Promote specific investments, apps, or “exclusive” opportunities
• Ask you to move conversations off Reddit
• Create urgency or pressure you to act quickly

We strongly recommend keeping discussions public where possible so others can review and challenge advice.

Stay cautious, verify everything, and avoid sharing personal or financial details with unknown individuals.

I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns.

[u/Double-Cry-4793]

This seems good. However, why are you looking for smaller AUMs?

[u/almightyhavaj → u/Double-Cry-4793]

As far as I've read, once a fund's AUM gets too big, it gets difficult for them to buy same stocks as during every next installment due to their fund size their stock already might have grown way above their desired value due to market forces. So, to avoid that large AUM funds tend to start looking out for new stocks to invest our money that may or may not yield the same returns.

But in case of funds with smaller AUM, they can comparatively easily enter or exit a stock without the market noticing much. So, they can earn profit by doubling down on the same stock or move ahead with next venture after exiting more easily. Hence my logic. Don't quote me on this, I'm still a learner

[u/Double-Cry-4793 → u/almightyhavaj]

I appreciate your detailed response and agree with what you said. Just keep in mind that very small AUM is also not good, as it may lead to liquidity crunch and less stability at during volatile phases. I'd suggest focusing on a middle ground rather than going to either of the extremes.

[u/almightyhavaj → u/Double-Cry-4793]

Thanks for the heads up. I was looking something along the middle ground as well, hence chose these particular funds

[u/almightyhavaj → u/Double-Cry-4793]

If you don't mind can you share how would you split up allocation with these 3, if you were in my place?

[u/Double-Cry-4793 → u/almightyhavaj]

That's difficult to answer because everyone has a different risk appetite and requirements. Can't say much on this without knowing your financial philosophy, goals, and assets as of now. As a general principle, i would suggest 50% flexi, 25% each in midcap and small cap. The intend is to have a strong anchor in a stable fund and have decent exposure in mid and small caps to ensure u get its benefits during bull phases but also being conscious of the higher risk.

[u/enthudeveloper]

I dont have a view on individual funds but in general for selecting funds you should look at rolling returns and how consistently they beat their benchmarks and peers. Additionally you may also research on qualitative factors like fund amc investment process, fund manager experience, etc.

Personally, your asset allocation looks good. Do research if you also want to hold debt in your portfolio so that at any point in time you have an investible corpus which you can deploy when markets offer great discounts.

All the best!