'Consider stopping your SIPs in smallcap schemes'

I am 45 years old and would like you to review my portfolio. I have monthly SIPs in Birla MNC (Rs 10,000), DSPBR Micro Cap (Rs 20,000), Reliance Small Cap (Rs 20,000), Mirae Asset India Opportunities Growth Fund (Rs 10,000), ICICI Pru Export & Other Services (Rs 10,000) and HDFC Balanced (Rs 10,000). The investment horizon is seven to eight years and the prime objective is capital appreciation.
--Ashok Singhania

Vishal Dhawan, Founder, PlanAhead Wealth Advisors, responds:

The portfolio is very significantly overweight on mid and small cap through your choice of funds, and it is exposed to the risk of a sharp correction in our view due to the current overvaluations in the mid and small cap space. We would therefore recommend that you consider stopping your SIPs in the DSP Micro cap Fund and the Reliance Small cap Fund, and replacing them with multi cap funds that have the flexibility to move between large and mid-sized companies as per the view of the fund manager. Franklin India Prima Plus Fund and HDFC Equity Fund could be options to consider as replacements. In addition, you may wish to explore exiting a portion of your investments in the mid and small cap funds to reduce the overall portfolio risk. Your choice of thematic funds is also significantly tilted towards funds that have a mid and small cap bias, and thus you could consider stopping your SIP in the ICICI Pru Export and other services fund, and topping up your exposure in the HDFC Balanced Fund.


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