Good discussion, so adding my perspectives in general about SIP’s. Been doing SIP’s since 10 years, though increased the weightage of flow into SIP’s (vs direct equity) since 2020. Core idea behind SIP’ is its gives you the discipline and eliminates all the biases about market movements. To build a corpus and to continue your saving journey, SIP helps you immensely.
Though I started with few Small caps, value funds and blue chip, later I realized, since maintaining a direct equity investment/demat, its better to go with index funds and ensuring general market returns on my SIP’s. So tilted a bit towards Nifty 50 and next 50, along Balance advantage fund to ensure stability of PF. The following are few points I found over the years, and I am still learning.
- Nifty 50 Index fund from ICICI was doing well for 4-5 yrs, but recently I found that its better to go with Factor funds with an index like Momentum/ Value, Low Volatility etc. So gradually shifted to Mom 30 and Low vol (out of 100/200).
- Few thematic fund like PHD, (Pharma, health, diagnostics) started prior to COVID, and still continuing. Pharma as a sector, not an easy segment to invest directly. Although I do have exposure to few pharma/hospital stocks, after 5-7 yrs, what I realized is we do miss a lot of good investment stories here. I believe, India has a lot of space/segments (within PHD) here to grow, and will continue to expand the global market share as a supplier of critical medicines. Maintains a specific annual increment in SIP here.
- US fund has been doing since 7-8 years, so continue to it, though didn’t want to increase the annual SIP. The idea is to maintain at least 3-5% of overall PF exposure into US blue chip funds.
- Started a china fund, a year back as a bottom fishing idea… considering cheap valuation and thought the bottom is around… Here, am not expecting much as the % overall PF and SIP is too low to do any bit to total PF. The idea is to keep track of global-china movement, and continue with a small allocation (5-7 yr view) and if required, move out once the valuation is in favor.
- India Technology fund was started 2 yrs back, when the IT sector started to hit bottoms. Here too, similar to pharma segment, its one of the key GDP contributor to India and should do well over the next decade. So a thematic fund was a go to option for me.
- Has a Focused fund and Quant fund (focused), both contributes to around 10% of overall PF. Here too, idea is to continue watch the performance closely, and to evaluate over 5-7 yrs.
- Criteria for choosing the fund is the fund size (liquidity), churn ratio (mind set), expense ratio and fund house/manager credibility.
- Some of the funds have few overlaps, though not at exceeding levels.
- Booking/selling is to the minimum. Though I do try to trim a bit from index funds, Debt funds if the market seems to show froth and corrections are due…, and normally it helps me to maintain the 5-10% cash requirement in direct equity investments (where mostly into small/mid caps).
Nothing much more, will add further upon your comments and feedbacks.
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