Is selection of funds for my SIP good

1. The 3 funds in which you are currently doing SIP are all top performing and suitable for an investor with moderately high risk taking appetite.

2. You want to increase the total monthly SIP amount and have chosen another 9 funds which is quite high. Please note that increasing the number of funds may not be the right approach to get good returns. Returns in mutual fund will come from investing in few good funds rather than investing in too many funds!

3. Also, you have considered L&T Prudence fund as equity fund but this is actually a balanced fund. Similarly, HDFC balanced fund is not a debt fund but a balanced fund.

4. If you start investing with all the funds you have chosen, then your monthly allocation to equity funds will be Rs.11,000, balanced funds Rs. 3,000 and debt funds Rs. 6,500.

5. Why are you investing in debt funds is not known to us. Is it for risk diversification/ asset allocation or because of lower investment horizon?

Please note that if your investment horizon is less than or up to 5 years, then investing in debt funds makes sense. However, if your investment horizon is more than 5 years and you also want to diversify the risk, then you should invest in balanced funds.

Balanced funds invest 65% in equity and rest in debt funds but the balanced funds enjoy equity taxation.

Please read - investing in balanced funds versus a portfolio of equity and debts https://www.advisorkhoj.com/articles...

Therefore, to summarize, you should first know your risk taking appetite and accordingly choose funds based on asset allocation. Also, for doing SIP of Rs.20,500 per month 4 to 5 funds are good enough to get the desired returns (provided the fund selection is good)

Let us know how else we can help.

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