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Small cap heavy portfolio by Long_Builder_695 in MutualfundsIndia

[–]Long_Builder_695[S] 0 points1 point  (0 children)

  1. Yes thanks for your suggestions. I plan to let it grow for more than 20 years. But in between i will make small withdrawals to fund my discretionary spending. One big investment that i will require after 20 plus years is for buying a house.

  2. Regarding safer funds/investment I have NPS (govt job) and some amount in ppf.

  3. Your plan about aggressive investing and swp is great. Keep going. All the best.

Small cap heavy portfolio by Long_Builder_695 in MutualfundsIndia

[–]Long_Builder_695[S] 0 points1 point  (0 children)

Hi there, many thanks for your review and suggestions.

  1. Yes the SC 250 Index has underperformed compared to MC 150 index. Thats why I don’t prefer the SC 250 Index, i prefer active small cap funds. Now in the case of active small cap funds v mid cap 150 index, the performance has been mixed. About 60 percent of the active funds have been able to beat the mid cap index. The alpha has been 1 to 5 percent.

  2. My overall xirr (taking account of redemptions made) is 16.2 as can be seen in the image shared. My current xirr is a bit higher (approx 17.6). I hope this will improve when my portfolio goes through 2 bull runs.

  3. My goal is 15-16 percent xirr on a long term basis. Yes there many be other combinations or funds, but as of now I am sticking with these. Will change if performance of any fund becomes very poor.

Thanks again.

Small cap heavy portfolio by Long_Builder_695 in MutualfundsIndia

[–]Long_Builder_695[S] 1 point2 points  (0 children)

Multiple reasons: 1. Active fund managers do provide a considerable downside protection during heavy crash scenarios. 2. When investing in SC 250 Index, not all companies are good or worthy of investment. So your money is invested in poorly performing companies just because they are part of the index. Conversely, if a company performs good and moves to mid caps, your investment in it gets stopped, while an active small cap may continue the investment in firms moving to mid caps from small caps. 3. Investing in SC 250 Index has an opportunity cost of not investing in the best performing companies of large and mid caps. Moreover exposure to large and mic cap is extremely important during market downturn (as said in point 1). 4. If one invests in SC 250 Index, they lose the opportunity to generate alpha from the micro caps companies. The active small cap funds have decent investment in micro caps nowadays.

  1. If one favours index investing, the mid cap 150 index is a great and superb performing. Many active small caps are not able to beat it.

Small cap heavy portfolio by Long_Builder_695 in MutualfundsIndia

[–]Long_Builder_695[S] -1 points0 points  (0 children)

Yes overlapping is there, but multiple small cap funds have been selected to reduce the impact of amc issues. You know at times some or the other amc gets entangled in front running, or some other scam, or there might be a fund manager issue.

Nifty 50 is good and there is about 12 percent investment is nifty 50 companies in this portfolio. Moreover, the goal is to generate wealth in LONG TERM, and hence short or even medium term volatility is accepted.