I began a monthly SIP (systematic investment plan) of 5,500 rupees in the Mirae Asset Emerging Bluechip, SBI Focussed Equity, SBI Small Cap, and ICICI Nifty Next 50 Index funds two years ago. With each market decline, I have been adding a lump sum of $2,000 to my SBI Focused Equity account. I have 20 years of experience as a risk-taking investor. I’ll continue to add the same amount for the following ten years, after which I’ll cease the SIPs and hold them for an additional ten. Should I switch my money from the Nifty Next 50 Fund to SBI Focused Equity, SBI Small Cap, or Mirae Asset Emerging Bluechip instead of continuing to invest in the Nifty Next 50 Fund?
Throughout many market cycles, Mirae Emerging Bluechip, SBI Focused Equity, and SBI Small Cap have performed well for investors. When the markets decline, adding more as a lump sum can also benefit you because it will enable you to invest at a lower NAV. You can think about contributing a lump sum from the current funds to the SBI Focused Equity Fund as and when you have the chance.
Currently, Mirae Emerging Bluechip does not accept lump sum investments, hence it is preferable to invest in small cap funds via a systematic annual contribution (SIP) rather than a lump payment.
Even if you said you could tolerate high risk, the current funds are more heavily weighted toward mid- and small-cap companies. Currently, these companies may make up about 50% of your whole portfolio. You might decide to withdraw your investment from ICICI Nifty Next 50 and instead make a future investment in a large cap fund or a Nifty index fund. Over time, this will also aid in increasing the allocation to high cap corporations. Over the long term, six to eight equity funds are ideal.
When you decide to increase the SIP amount in the future, you may want to think about include Canara Robeco Bluechip or UTI Nifty Index, Parag Parikh Flexicap, and Kotak Equity Opportunities.
This will not only assist you in diversifying among various asset management firms and improving your mix across market capitalization.