I invest about ₹26,000 a month in the following mutual funds, all in growth option. The main objective is to accumulate towards pension in about 10 years. I put in ₹3,000 a month in SBI Focused Equity, ₹4,000 a month each in Invesco India Growth Opportunities and ICICI Prudential Bluechip, and ₹5,000 a month each in Mirae Asset Large Cap, Nippon India Large Cap and Kotak Standard Multicap. I have no debts and have already invested in PPF and NPS. Please let me know if I need to tweak any of the above investments. I notice that Nippon Large Cap is not performing well; I’m not sure how long I should wait and watch.

Raghuraman K

You currently invest ₹14,000 a month in large-cap funds (ICICI Prudential Bluechip, Mirae Asset Large Cap and Nippon India Large Cap), ₹3,000 a month in the focussed fund category (SBI Focused Equity), ₹4,000 in the large- and mid-cap category (Invesco India Growth Opportunities) and ₹5,000 in the multi-cap category (Kotak Standard Multicap). Your investments are divided almost equally between the lower-risk large-cap category of funds and the moderate- to high-risk categories such as focussed, large- and mid-cap, and multi-cap.

Mirae Asset Large Cap, ICICI Prudential Bluechip and Invesco India Growth Opportunities are rated either five-star or four-star by Business Line Portfolio Star Track MF Ratings . You can continue your SIPs here for the time being.

While SBI Focused Equity is also rated five-star, focussed funds, by definition, are allowed to bet on a slightly concentrated portfolio of up to 30 stocks.

Since you have a reasonable time-frame to go before retirement, you can continue investments here for the next 3-5 years and then move to a relatively safer category.

Kotak Standard Multicap is also rated five-star, but it too is a fund which you may want to be watchful about. Though categorised as a multi-cap fund, it usually takes higher exposure to large-cap stocks. With SEBI recently tweaking norms for multi-cap funds, mandating to allocate at least 25 per cent each to large-, mid- and small-cap stocks, it remains to be seen what the fund house will do to comply with the new norms.

Due to its large-cap-focussed portfolio, the fund has usually contained losses in falling and volatile markets better than many peer multi-cap schemes. If the fund house chooses to reduce the large-cap exposure, this attribute of the fund may undergo a change.

Also, the fund house may explore other options such as merging the fund with another.

You can continue the SIPs for the time being, but keep an eye on any announcements from the fund house regarding a change. You can take action based on whether the changed characteristic of the fund suits your risk appetite and time horizon.

As far as Nippon Large Cap goes, it is rated three-star by us.

You can switch to the lower cost Nippon India Index Fund - Nifty Plan instead.

Since you are investing in equity funds, which are subject to market gyrations, and you require the sums for your post-retirement corpus, it is best you shift out of them at least three years prior to retirement, into safer avenues such as fixed deposits.

This will help you preserve the gains you have made through long-term investment in equities. If the market is going through a downturn at that point in time, wait it out a little before you pull out your funds.

You can aim for a compound annual return of 12 per cent on your SIPs for long-term investments such as retirement.

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