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No Withdrawals In an equity scheme, maintain a time frame of at least 5-7 years and don’t be unnerved by interim volatility. Avoid withdrawing money from the equity corpus to fund new SIPs. If you need funds 1-2 years down the line, do not start a new SIP in an equity mutual fund.
Instead, opt for a fixed-income or hybrid fund, as reported by ET Bureau. Correct Investment Approach Investors should build their long-term mutual fund portfolio based on their age, risk-taking ability, and long-term goals. This can be achieved by following an asset allocation approach and diversifying across assets such as equity, gold, fixed income, and REITs/InvITs.
Blend of Active and Passive Funds A mix of active and passive funds can help build a well-rounded portfolio. While the core portfolio should be in long-term-oriented fund categories, investors could include thematic or sectoral funds in their satellite portfolios for alpha generation. Need to Add a New Scheme? If an investor has a monthly SIP of Rs 10,000 in three different categories and wishes to raise the SIP by Rs 2,000 per month, they could opt for a thematic or sectoral fund.
Alternatively, for a more conservative approach, they could choose a hybrid fund with lower equity exposure. Another option is to divide the additional money among existing schemes. Choose an NFO? While many NFOs are well-marketed, investors should not get carried away, as many are launched by fund houses to fill their product basket or cash in on exciting market themes.
Choose an NFO only if such a product is not available with another fund house or if it offers a compelling proposition for your portfolio. How to Increase SIP Amount? Investors can increase their monthly SIP contribution by adding money to their existing scheme or choosing a new fund for their portfolio. The additional SIP can start on any convenient date, and choosing different dates helps spread the investments throughout the month.
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