Are Multi Cap Funds The Right Fit For Your Portfolio?: All You Need To Know | The Mutual Fund Show

Summary

In this episode of the Mutual Fund Show on NDTV Profit, host Alex Matthew discusses the launch of a new multicap fund by PGM India with Chief Investment Officer V. Paharia. The fund, targeting a diversified investment across large, mid, and small-cap companies, aims to balance risk and reward. The conversation explores the fund's strategy, the importance of a long-term investment horizon, and the current market conditions. Expert guests Arnav Panda and Vishal D'avan join to share insights on multicap funds' performance, risk management, and how investors should approach portfolio diversification.

Takeaways

• 😀 The discussion revolves around the launch of a new multicap fund by PGM India, highlighting its investment in all market capitalizations.
• 💼 V Paharia, Chief Investment Officer at PGM India, explains that multicap funds are required to invest at least 25% in each market capitalization segment, providing a balanced risk-reward profile.
• 📈 Multicap funds have seen significant performance in recent years, contrary to the underperformance of high growth, high quality companies.
• 🌐 The investing universe for the new fund is broad, with over 1200 companies having a market cap of more than 1000 crores, focusing on high growth and high quality companies.
• 🔢 The portfolio size for the new fund is expected to be between 60 to 75 stocks, with a more refined universe of 160 to 200 stocks.
• 💹 The fund's strategy emphasizes 'growth at a reasonable price', which has underperformed recently, suggesting potential for future outperformance.
• 📉 Despite the bull market, there is an acknowledgment of the inevitability of market drawdowns and the importance of a long-term investment horizon.
• 🏦 The conversation touches on the ideal allocation for multicap funds within an investor's portfolio, suggesting a disciplined approach with a long-term view.
• 💼 Expert opinions from Arnav Panda and Vishal Davan are included, discussing the performance of multicap funds and strategies for investors.
• 🏠 The show addresses specific investor queries about SIP investments for goals like buying a house, education, and early retirement, emphasizing the need for a balanced and diversified portfolio.

Q & A

What is the primary focus of the mutual fund show on NDTV Profit?

The mutual fund show on NDTV Profit focuses on providing actionable insights on everything related to mutual funds, particularly discussing new funds, strategies, and investment philosophies.

Why did PGM India Mutual Fund choose to launch a multicap fund at this time?

PGM India Mutual Fund launched a multicap fund to offer investors a blend of all three capitalizations (large cap, mid cap, and small cap), which can result in a good balance of potential risks and rewards.

What is the minimum requirement for investment in each category for a multicap fund?

A multicap fund has a base minimum requirement of investing at least 25% in each of the categories: large cap, mid cap, and small cap.

How does the investment philosophy of PGM India's new multicap fund differ from other multicap funds?

PGM India's new multicap fund follows an investment philosophy of predominantly investing in high growth and high-quality companies, which sets it apart from other multicap funds.

What is the likely size of the portfolio for PGM India's new multicap fund?

The portfolio size for PGM India's new multicap fund is expected to vary between 60 to 75 stocks, depending on the fund manager's ability and market view.

What is the 'Growth at a Reasonable Price' strategy, and how does it apply to the new multicap fund?

The 'Growth at a Reasonable Price' strategy involves investing in companies that are high growth and high quality but are not priced at a significant premium. This strategy is applied to the new multicap fund to seek companies that have underperformed recently but have strong underlying value.

How does the multicap fund strategy protect against market downturns?

While there is no hiding place from market downturns in equity investing, the multicap fund strategy aims to diversify across high growth and low growth segments, which can help in managing risk and potentially protecting against widespread downturns.

What is the ideal holding period for an investor in a multicap fund like the one discussed?

The ideal holding period for an investor in a multicap fund is considered to be long-term, with a suggestion of at least a three-year period, and possibly extending to 7 to 10 years for better risk management.

Why have some fund managers been forced to invest half of their assets into midcap and small cap stocks?

Some fund managers have been forced to invest half of their assets into midcap and small cap stocks due to the category rules that aim to provide diversification and exposure to different segments of the market, which can lead to outperformance.

How can investors choose the appropriate multicap fund for their portfolio?

Investors can choose the appropriate multicap fund by considering the fund's ability to manage downside risk, its historical performance, and its alignment with the investor's overall portfolio composition and risk tolerance.

Outlines

00:00

📈 Introduction to Multicap Funds

The discussion begins with Alex Matthew introducing the topic of multicap funds on the Mutual Fund Show. V Paharia, Chief Investment Officer at PGM India Mutual Fund, joins to discuss the launch of a new multicap fund. Multicap funds invest across all market capitalizations, ensuring a minimum of 25% exposure to large, mid, and small-cap segments. This strategy aims to balance risk and reward by leveraging the high growth potential of small and mid-caps while using large caps as stabilizing forces. V emphasizes PGM's investment philosophy of focusing on high growth and high-quality companies, contrasting with the current market trend favoring low growth and low-quality companies.

05:00

💼 Strategy and Portfolio Composition

V Paharia elaborates on the investment universe for the new multicap fund, which includes over 1200 companies with a market cap of more than 1000 crores. The fund will select companies with high growth and quality prospects. The expected portfolio size is between 60 to 75 stocks, with a potential universe of 160 to 200 stocks. The conversation shifts to the fund's strategy of investing in high growth at a reasonable price, which has underperformed in the past year due to a market favoring low-quality, low-growth companies. Alex and V discuss the challenges of protecting investments during market downturns and the importance of a long-term investment horizon.

10:03

🌐 Market Dynamics and Fund Performance

The conversation continues with a focus on the broader market context, including the potential impact of the FED meeting on global risk assets. The discussion highlights the outperformance of multicap funds due to fund managers' forced investment in mid and small-cap stocks. However, there's a concern about potential underperformance in the future if these segments correct. Arnav Panda and Vishal Davan join the discussion, emphasizing the importance of risk management and long-term investment strategies. They suggest that while multicap funds have shown discipline in allocation, investors should be prepared for market volatility and maintain a long-term view.

15:04

📊 Selecting Multicap Funds and Portfolio Diversification

Vishal and Arnav provide insights on choosing the right multicap funds, focusing on risk management and conservative investment strategies. They recommend a balanced portfolio that includes market capitalization index funds, international diversification, and a mix of multicap and flexi-cap funds. The discussion also covers the importance of not having too many schemes in a portfolio and maintaining a balance to avoid sector-specific risks. Specific fund recommendations include the Mahindra Manual Life Multicap Fund and the Nippon India Multicap Fund for their risk-adjusted returns and performance.

20:06

💼 Investor Queries and Portfolio Planning

The show concludes with the panel addressing investor queries. The first query is from Shri Kant, who has ambitious financial goals including buying a house, funding his daughter's education, and early retirement. The panel suggests a combination of domestic and international index funds, along with a flexi-cap fund, to meet his goals. The second query is from Sa Krishna, who has a diversified portfolio with multiple schemes. The panel advises consolidating his investments and maintaining a balance to ensure sector-specific risks are mitigated. The show ends with a reminder for viewers to engage with the show by sending their questions and tuning in for more financial advice.

Keywords

💡Multicap Funds

Multicap funds are a type of mutual fund that invests in companies across various market capitalizations, including large-cap, mid-cap, and small-cap stocks. These funds aim to provide investors with a diversified portfolio that includes a mix of potential risks and rewards. In the script, the discussion revolves around the benefits of multicap funds, such as their ability to balance risk and reward by investing in all capitalizations of the market, as mentioned by V Paharia, the Chief Investment Officer at PGM India Mutual Fund.

💡Market Capitalization

Market capitalization, often referred to as 'market cap', is the total dollar market value of a company's outstanding shares of stock. It is calculated by multiplying the number of shares outstanding by the market price per share. In the context of the video, market capitalization is used to categorize companies as large-cap, mid-cap, or small-cap, which is crucial for the strategy of multicap funds as they invest across these categories.

💡Investment Philosophy

Investment philosophy refers to the core beliefs and strategies that guide an investor or a fund manager in making investment decisions. In the script, the investment philosophy of PGM India Mutual Fund is highlighted, emphasizing a focus on investing in high growth and high-quality companies, which is a strategy they intend to apply to their new multicap fund.

💡Growth at a Reasonable Price (GARP)

GARP is an investment strategy that aims to find stocks that are growing at a reasonable price, balancing the potential for growth with the risk associated with the price paid. The script discusses how this strategy has underperformed in the recent market conditions, yet it is considered a potential opportunity for long-term investors due to the undervaluation of high-growth, high-quality companies.

💡Portfolio Size

Portfolio size refers to the number of different stocks or securities held by an investor or a fund. In the context of the video, the ideal size of the portfolio for the new multicap fund is discussed, with the number of stocks in the portfolio expected to vary between 60 to 75, depending on the fund manager's market view and ability to manage the portfolio.

💡Investing Universe

The investing universe refers to the entire pool of investment opportunities available to an investor or fund. In the script, the investing universe for the new multicap fund is described as companies with a market cap of more than 1,000 crores, from which the fund will select high growth and high-quality companies for investment.

💡Risk Management

Risk management in investing involves the identification, evaluation, and prioritization of risks followed by coordinated efforts to minimize, monitor, and control the probability or impact of unfortunate events. The script discusses the importance of risk management, particularly in the context of multicap funds, where the fund's strategy and restrictions can play a role in managing risk.

💡Long-term Investment Horizon

A long-term investment horizon refers to the length of time an investor expects to hold onto an investment before selling it. In the video, the importance of having a long-term investment horizon is emphasized, especially for investors in multicap funds, as it allows them to ride out market fluctuations and downturns, which are inevitable in the equity markets.

💡Drawdown

Drawdown in investing refers to the decline from a historical peak in the value of a portfolio or investment. It is usually quoted as a percentage. The script mentions that investors in equities must be prepared for drawdowns and should not panic sell during market corrections, which are a normal part of the investment cycle.

💡Risk-adjusted Returns

Risk-adjusted returns are returns on an investment that have been adjusted for the risk of that investment. This allows investors to compare the returns of different investments on a risk-adjusted basis. In the script, risk-adjusted returns are mentioned as an important metric for evaluating the performance of multicap funds, particularly in terms of their ability to manage risk and provide stable returns.

Highlights

Introduction of a new multicap mutual fund by PGM India Mutual Fund.

Multicap funds invest in all market capitalizations: large cap, mid cap, and small cap.

The minimum requirement for multicap funds is to invest at least 25% in each category.

Multicap funds provide a blend of potential risks and rewards by investing in various market capitalizations.

PGM India's new multicap fund focuses on high growth and high-quality companies.

The investing universe for the new fund consists of over 1200 companies with a market cap of more than 1,000 crores.

The portfolio size for the new fund is expected to be between 60 to 75 stocks.

The fund's strategy is to invest in companies with high growth potential at reasonable prices.

Despite recent market trends, high growth and high-quality companies are currently underperforming.

The fund aims to protect against market downturns by investing in a diverse range of high growth companies.

The ideal holding period for investors in a multicap fund is suggested to be long-term, at least 3-5 years.

Multicap funds have outperformed due to forced investments in midcap and smallcap stocks.

Investors should be prepared for potential volatility in midcap and smallcap segments.

Multicap funds offer limited flexibility for fund managers due to strict allocation requirements.

Advice for investors with ambitious financial goals is to rationalize expectations and consider a mix of domestic and international funds.

For long-term investors, a combination of market capitalization index funds, multicap funds, and flexicap funds is recommended.

Investors with a large number of schemes in their portfolio may need to consolidate to maintain balance.

Risk management is crucial for multicap funds, and investors should focus on funds that demonstrate conservative strategies.

Transcripts

[Music]

hi thanks so much for joining in you're

watching the mutual fund show on NDTV

profit and my name is Alex Matthew like

the name suggests this show gets you

actionable Insight on everything mutual

fund related to that end we're speaking

about a new fund that is on offer it is

in the multicap category it's a category

that a lot of people are finding uh

interesting particular ularly because

they've done incredibly well over the

last couple of years or so V paharia who

is the chief investment officer at PGM

India mutual fund is joining me to talk

about the new fund that they are

launching in this category V thanks so

much for taking the time pleasure having

you on the program uh let's talk about

what's on offer and why you chose to

launch the the multicap fund right

now sure so Alex uh thank you for having

me on so uh so the category is very

straightforward it is a category which

uh as the name suggests invest in all

capitalizations of the market uh which

means it invests in large cap big cap

and small cap and the good thing about

this category is that there is a there

is a base minimum requirement of

investing at least 25% in each of the

category and that ensures that at any

point of time the fund managers do not

have an ex excessive exposure to only

one category like for example if you

look at the flexy cap category almost

2/3 of the category is invested

predominantly in large cap and just

about one3 in midcap and small cap uh

whereas in this uh there is a base

minimum requirement of 25% exposure to

each of the categories so I think from a

long range perspective this provides an

investor with a very good blend of uh

all the three capitalizations which

ultimately results in a very good blend

of potential risks and reward payoff

because small caps and midcaps have a a

much higher level of reward potential

along with the underlying risk whereas

large caps act as stabilizing forces so

I think that's what about what's uh

unique about the

category uh in in terms of PM I think uh

one of the ways in this fund is

different from rest the multicap funds

is that Pim follows of investment

philosophy of predominantly investing in

companies which are high growth and high

quality I I I want to get to that V

allow me to allow me to interrupt

because I want to specifically talk

about your your philosophy in a bit but

before we do um a couple of aspects that

I want to drill into which is what is

the likely size of the portfolio that

you will have what is the investable

Universe understandably obviously you're

going to buy across the market because

you have to but you will have certain

filters before we get into the

investment philosophy I think it will

lead very nicely into that what is this

the investing universe and what is the

ideal size of the portfolio that you

will

have sure so the overall investing

universe as you rightly said Alex is

pretty large because we will invest

across the capitalization uh as we speak

uh there are more than 1200 companies

which have more than 1,000 crores of

market cap so that is our investing

universe so to speak uh and from these

1200 companies we then select companies

which have got a higher than average

growth and higher than average quality

on a future basis on a prospective basis

so I think that's how the overall

Universe looks like in terms of

portfolio number of stocks in the

portfolio uh it would vary somewhere

between 60 to 75 uh depending on the

fund manager's ability and view on the

market okay that's that's and I was

reading your presentation that 160 to

200 stocks would basically be the

drilled down universe that's a that's is

that

accurate that's perfect okay so let's

talk about the growth at reasonable

price strategy which as I understand the

fund house espouses and what you're

going to be trying to do on this scheme

as well is that possible at this

juncture V considering the kind of runup

that we've seen across the board

particularly in some Pockets one would

say that there is a little bit of

stretched

valuations that's a good question Alex

and and and very

paradoxically it is the only strategy

which is significantly underperforming

in the last one and a half years so

while we would have imagined that in a

such a

runaway bull market uh high growth

companies and high quality companies

would be available at uh at Material

premium valuations I think uh thankfully

that's not the case uh this strategy has

materially underperformed uh the set of

companies which are on the other side

which is low quality and low grad so

just to give you some numbers in the

last one year low growth low quality

companies have actually outperformed

high growth high quality uh on an

average by approximately

25% and I'm talking about just the n 500

companies so I think there is a uh there

is a huge potential Tailwind from both

the aspects which one is the underlying

intrinsic value of these companies is

growing at a faster pace and second is

these companies have actually

underperformed uh the overall Market uh

by a material uh proportion over the

last 2 three years resulting in a

reasonable valuation comfort in many of

them okay uh the time that we are in uh

at least according to me V this is

unprecedented times because of the kind

of flows that you're seeing in the

domestic market and any dip gets bought

into very aggressively so we haven't

seen a major draw down in in in a couple

of years at the very least you can go

beyond that the question that I have is

that in a in a scheme like this where

you are forced to take alloc a 50% in

the broader markets 25% at the broadest

end there is little room to hide when

there is a a a widespread draw down

which we haven't seen in a while how do

you protect yourself against that draw

down so I think uh when you are

investing in equity you have to first uh

be ready to face a draw down there is no

there is no clear hiding place if you

are investing in equity you have to to

ensure that you be you are you have to

be ready to place a draw down uh having

said that what we believe is that most

of the market today is concentrated in

uh low quality low growth or high

quality and low growth segments of the

market so roughly almost uh a material

portion of the market is concentrated in

low growth segments of the market and I

think that is where the opportunity is

most people are diversifying themselves

by let's say uh large mid small some of

them are diversifying by let's say

strategies like Contra or something like

that but most of them are not

diversifying themselves by the core of

the strategy which is high growth and

low growth we think high growth has

significantly underperformed in the last

few years this is a strategy which has

delivered very strong returns over the

previous 25 years and hence we think

that there is a there is a great great

opportunity for investors to diversify

their portfolios uh if they do not want

to uh increase their Equity allocations

I think PM multicap offers a great

opportunity to diversify their portfolio

away from the existing theme which is

prevalent in the market okay um we've

been playing out on screen the various

trends that uh the scheme will likely

focus on and so I won't ask you about

that but what I will ask you about is

what in your opinion uh

the ideal holding period is for an

investor getting into a scheme like this

at the start uh particularly in the

context of what we've spoken about so

far uh and would it be something that

you would say if you go so suppose you

step into a room of investors and they

say are we going to get the kind of

returns that we've gotten over the last

two years how would you respond to that

question I would say you will not get

those

returns okay yeah I think uh I think uh

I will use your uh your channel and this

media as an opportunity to highlight

that what we have seen in the last three

years I don't think so any investor

should extrapolate that over the next

three years we need to remember as you

rightly highlighted in the start of the

show that there will be draw Downs draw

Downs are pretty painful and you should

be ready to face draw downs and not

chicken out at that particular point of

time and have a very long-term

investment Horizon which means Buy and

Hold and forget for at least threee

period so I think that's what we are

looking at Fantastic uh thank you so

much V for uh for you know expressing

that thought and that view and uh I'm

sure that my viewers are going to

benefit from it thank you so much for

taking the

time thank you it's been my pleasure

Alex thank you all right on that note

let's talk about multicap funds as a

category it's not like we haven't spoken

about it uh often over the past several

months but I think it Bears repeating

and let's look at some of the key

performers let's look at the context

that we are in right now because it's an

interesting time a little later in this

month you're going to see the FED

meeting and you're going to see possibly

a change in the interest rate scenario

in that market or in that economy and

that's going to have a bearing on risk

assets around the world we don't know

how India is going to perform a lot of

you have probably invested in multicap

funds over the course of the last 3

years and you've probably seen outsized

returns there might be skews in your

portfolio that you might need to correct

we're going to talk about how this

category has performed why certain uh

funds or schemes have outperformed the

others and what you should do if you're

seeing outsize gains in your portfolio

joining me now is Arnav Panda founder of

money U school as well as Vishal davan

the founder and chief executive officer

of plan ahead wealth advisor thank you

so much gentlemen for taking the time

hopefully you had the uh the uh you know

the chance to listen to V bahara who was

speaking to me about the fund that he is

launching in the same category we were

talking about growth uh at a reasonable

price and he was explaining what his

strategy is with regard to his portfolio

now Vishal first question to you about

this category one of the reasons why it

has outperformed is because fund

managers have been forced to invest uh

half of the assets that they receive

into midcap and small cap funds uh or

small cap stocks and they've

outperformed uh the worry is that they

could underperform down the line is that

something that you are thinking about

and what advice do you give to your

clients yeah well it's definitely

something that one should be concerned

about because both U mid and small cap

valuations on a trailing basis as well

as a forward basis are significantly

above their long-term averages and

therefore uh you know investors need to

be prepared that that segment of the

market at least could potentially uh see

some volatility which is uh

meaningful having said that I think you

need to keep in mind that one of the

things about investing is about the

discipline that one needs to maintain

and one of the advantages in multicap

funds is the fact that there is Li

limited flexibility that's available to

managers to do what they want to do uh

because they have to have 25%

allocations to large caps 25 to midcaps

and 25 to small caps and it's only that

Balan 25% that they can reallocate in

the way that they want and what you can

see is that very often when managers

have complete flexibility they could be

tilted so significantly towards the

index composition uh like you see in a

lot of flexi Gap funds that by default

they could end up having a very large

cap tiled portfolio at most times so I

think it's a uh it's an important thing

for investors to keep in mind that you

know this discipline has definitely

helped uh These funds do better in the

last years as mid and small caps have

done well but this could actually work

against them in the future as if when

mid caps and small caps correct so your

only real protection is to actually take

a much longer term view than you would

normally do when it did speak about 3

years we' probably extend that to uh you

know more like 7 to 10 years when you're

looking at allocations which are as much

as 50% in a portfolio to midcaps and

small caps yeah that's a fair point uh

arav do you do you think about this as

well okay let me let me uh let me change

the way that I'm asking this because we

were speaking about this in The Newsroom

and what we were disc covering is that

when there are restrictions on the way

that a fund manager has to uh construct

their portfolio more often than not if I

look at multi-asset funds which is not

as restrictive as multicap funds or if

you look at multicap funds they've

actually outperformed and outperformed

and how so do you think that those

restrictions have actually

helped no if you look at it restrictions

help on the face of the risk management

profile so whenever you're looking at

equity investing risk management is very

important and which is where the multic

Caps provide the limits in terms of how

much more risk the fund can take so that

is one aspect but when you are looking

at the outperformance angle what we have

to understand is that last couple of

years especially the rally in the market

has been so broad-based that virtually

every corner of the market has risen so

which is why you will find that most

multicap funds are doing pretty well in

terms of the returns aspect because of

these broad based nature of the rally so

the moment either this trend reverses or

the concentration in terms of who is

performing in the market becomes very

evident you will find that all these

funds which are showing above average

returns they are reverting to a lower

rate of return which is what normally

These funds should be providing and what

we are seeing today is something which

is I would say abnormal in terms of the

return SES yeah that's a fair point I'm

coming back to you Vishal on this next

question which is that generally we

found that investors tend to have too

many schemes in their in their

portfolios in your opinion how much of

an allocation and this is a tough

question of course and it's not

something that is going to be one siiz

fit all but uh how much should you

allocate to a multicap fund how many

should you have uh is one too less are

three too many how do you go about

choosing so I think uh the starting

point of this has to be the rest of your

portfolio composition and clearly one of

the things that we believe in is that

you need to have three elements to

portfolios even if you're thinking about

equities one is um you know be sure to

have market returns getting delivered

through a market capitalization based

Index Fund so a nifty50 fund for example

needs to be a part of your portfolio to

get you market returns the second is

look at some element of international

diversification because your biggest uh

friend is going to be the fact that if

you have money in multiple geographies

you will have periods where not all of

them go up and down together in the same

time now on top of this layer um

assuming that you're anyway building

some exposure to gold silver Etc you now

start to say okay within my other Equity

exposure that I want to build uh on top

of it how much multicap should I take

and can I take it through more than one

fund so our belief is that ideally if

you do want to have a multicap fund uh

in your portfolio at all points just

because of the discipline of always

having some map and small cap in your

portfolio then One Fund is enough and

having 15% of your exposure in that

scheme is probably enough I think you

need to combine it with a flexi Gap fund

where typically you will find that the

manager has flexibility to move in the

way that he or she believes is most

appropriate and therefore a multicap to

15% a index uh strategy which is you

know probably even close to half of your

portfolio and the rest of it in fxab is

probably a good option okay that's well

explained I want to talk about about a

few of the outperformers and I

understand that uh they will be skewed

by the recent performance of the markets

and uh having said that though um let's

play out the outperformers over a period

of 5 years here we're talking about uh

the returns that have been generated uh

on a compounded annual basis and you

have uh nearly 34% return by the Quant

active fund you have Mahindra manual

life which is not too far behind at 29%

or thereabouts nepon India doing quite

well for itself and Invesco we've only

taken the top five but quite a few of

these schemes have actually done well um

they haven't managed to beat The

Benchmark though if you if you think

about it even the fifth performer has

actually underperformed The Benchmark by

a a factor of 1.5% or thereabouts I

don't know it it lends itself to what

you were talking about that broad-based

rally and it's tough particularly in the

broader end for fund managers to stock

pick therefore and beat The Benchmark so

then from that perspective how do you

choose the appropriate multicap fund

which ones do you like and

why oh I mean when I look at multicap

funds my core focus is on the fact that

how is it able to manage the downside

because a large part of what we can call

in this particular cycle the upside has

been taken care of so you still might

have a good couple of years ahead but I

see a several roadblocks and periods in

the market going ahead where there will

be tough times and why is this important

because over the last 3 four years

postco if you look at it it's been a

oneway land see normally you expect

sharper corrections to come in for some

major retracement also to take place

overall but which has not happened so

which is also changing the mindset of

the investor a bit who are not paying as

close attention to risk as they should

be so for me funds which are more in

terms of reducing risk ensuring that

they are conservative in nature for me

those funds I prefer them and within

that list I mean my preferences are for

the lipon India multicap fund the HDFC

multicap fund and the ICI multicap fund

Okay so specifically on these factors

got it uh Vish do you want to add to

that you've listed Mahindra manual life

multicap fund and npon India multicap

fund why do you like these

two so very clearly I think one of the

things that arnab did mention is the

importance of risk management layered on

top of the returns that are being

demonstrated and uh therefore if you

look at both of these funds they

actually have very good risk adjust

returns demonstrated through both High

shars ratios as well as higher

information ratios that both of them are

demonstrating and clearly if you look at

their

performance um it's interesting to

segregate the triling fiveyear data from

also the rolling performance of how

they've done over periods of time and

both of these funds seem to have done

their job pretty well uh independent of

what obviously has happened in the last

couple of years because of the strong

rally in

general that's a fair point it's time to

take a few of the queries that have come

to us I'm going to ask my producer to

pull that up on the screen the number

that you can send your questions to and

let's run through a few gentlemen if we

can the first question is from Shri Kant

and he's 30 years old he's planning to

start a sip or an sip at 50,000 Rupees

per month for purchasing a house uh that

he anticipates will cost 1.5 CR in 5 to

8 years he also requires funds for his

daughter's education and M he will

retire he says by 40 to 45 that's quite

the quite the target what are some of

the funds that he can invest in M you

want to weigh in he's got quite the

ambitious targets one buying a house two

educating his daughter and spending for

her marriage and also retiring

early yes I think it's a handful so um

so I think one and and it's a very short

period of time right so um so it is it

is not going to be a very easy challenge

to achieve and therefore I I think the

way to think about it is really to sort

of U first of all rationalize

expectations a little bit uh in terms of

what is possible and what is not uh I

think keeping his uh time frame in mind

um you know uh he technically has about

15 years to go before his retirement

let's say 10 to 15 years so it may be a

good idea for him to look at a

combination of a domestic and an

international Index Fund uh as a sort of

starting point for him to think about

and then layer it with a um you know

with a flexi Cap Fund on top of it so

that that combination of three funds can

potentially do the job that it has it's

very important though that he needs to

uh start you know uh reducing the risk

gradually as he gets to the point where

he wants to buy his house you don't want

to uh you know keep staying in equity

till you know 5 6 seven years uh going

forward and then find that in the eighth

year when you want to buy the house you

probably don't have enough because it's

been a deep Market correction that has

happened at that point point uh quickly

jumping into the second question sa

Krishna is investing 15,000 rupees per

month with a 10% annual step up he

intends to invest for at least 35 years

and his plan is to retire at the age of

60 he's got a few schemes I'm going to

read them off you know arav I've shared

it with you I'm going to Rattle it off

very quickly the nepon India small Cap

Fund the Quant small cap fund HDFC

midcap opportunities fund the motilal

oswal small Cap Fund nepon India large

Cap Fund IC credential Nifty next50

index fund and the parag parik parik

flexi Cap Fund quite a few and he split

the investments into all of these should

he continue with this is there anything

that you would say about his

portfolio so given the size of the

investment that he's making the number

of funds are a bit too high and that is

obviously because you have two midcap

and two small cap funds I mean for the

moment

I mean these two funds within the same

category can be merged so the small Cap

Fund can be the npon India one the

midcap fund which can which is retained

can be the HDFC one and the other are

fine in terms of the spread out only

thing that he has to take care of is

that as he steps up the amount to ensure

that it doesn't get particularly

investment heavy in one particular

sector or fund so that there is an

overall balance which is maintained but

the idea is that you have the funds

right keep increasing the amounts in the

same ones yeah that's a fair point

thanks so much Arna for getting us those

details uh on that note that brings us

to the end of this particular edition of

the mutual fund show Vishal as well as

arav thank you so much for taking the

time for answering all the questions

that you did I'd encourage you to write

to us on that number we'll spend more

time on Monday taking some of your

questions that's all the time I said on

this show uh but there's more line up on

the other side so do stay tuned this is

NDTV profit

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