After 8–10 years of equity SIPs, should I rebalance my mid- and small-cap-heavy portfolio or continue investing?

These are a set of queries raised by ET Wealth readers, which have been answered by our panel of experts.

I have been running mutual fund SIPs in five equity funds for 8-10 years. My portfolio is now overweight in mid and small caps. Should I rebalance by shifting some gains to large-cap or multi-asset funds, or continue with my existing SIPs?

Ravi Kumar TV Director, Gaining Ground Investment Services: Over the past 8-10 years, your SIPs have done exactly what they were meant to do: participate in India’s growth across market cycles. The rally in mid- and small-cap stocks naturally tilted your portfolio towards these segments. Mid and small-cap funds go through phases of higher volatility, but historically they have delivered superior long-term returns. If your goals are long-term (over seven years), it’s perfectly fine to continue with your existing SIPs without tinkering too much. Your SIPs benefit from cost averaging, and any unnecessary rebalancing may interrupt the compounding that has already worked in your favour.


However, if your goals are in the near term (1-2 years), rebalancing is important. You may move to more stable categories, such as dynamic asset allocation funds or multi-asset funds, so that the returns you’ve accumulated are protected. Ultimately, the right approach is simple: stay invested and let compounding work if your timeline is long, and realign the asset allocation if your goals are closer so that your portfolio remains stable and aligned with your life goals.

As a retail SIP investor, will Sebi’s new Base Expense Ratio (BER)–Total Expense Ratio (TER) rules change my mutual fund costs, and where can I see these charges clearly?

Ravi Kumar TV Director, Gaining Ground Investment Services Pvt. Ltd: As a retail investor in regular mutual fund plans, Sebi’s recent Total Expense Ratio (TER) framework changes will not alter how money is deducted from your investments, but they will change how costs are disclosed and, over time, may modestly reduce expenses. The regulator has separated fund costs into a Base Expense Ratio (BER), which includes fund management, distributor brokerage, and statutory levies and brokerage, which will now be shown separately. This makes it clearer what you are paying for fund management versus taxes and transaction costs. The lower caps on expenses and tighter brokerage limits could marginally improve net returns in the long run. You will be able to see these costs clearly in scheme fact sheets, SIDs/KIMs, and AMC web sites, which will now reflect this more transparent breakdown. This change itself does not require any immediate switching of funds. The regulatory revision primarily enhances transparency.

Our panel of experts will answer questions related to any aspect of personal finance. If you have a query, mail it to us right away. Email ID: etwealth@timesgroup.com