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00:00Welcome, you're watching the Mutual Fund Show. I'm Tamannah Enamdar. Now, this is your one-stop
00:11destination for all things to do with your mutual fund investments. And what we're talking about
00:17today is, I'm sure a question that has definitely crossed your mind. Now, remember, when it comes
00:23to mutual funds, the conversation is usually about when to invest, how much to invest,
00:29and the advice that you'll hear possibly will be one that says, don't look at stopping your SIPs.
00:36But there could be times when you do need to, in fact, stop your SIPs or your systematic
00:42investment plan. So that is what we're going to talk about today. When do you stop your SIPs?
00:48We know when to start them, which is anytime. But when should you rethink on your SIPs,
00:55pause them? Is it because you've reached your financial goals? Should you look at how the
01:00markets are valued or have run up at that point? Or maybe the fund that you put your money in
01:05is just not performing as expected. So we'll talk more about that today. And I'm joined by Anant
01:11Ladda, Founder, Invest Aaj For Kal and Shruthi Mahajan, Managing Partner and CEO at Complete
01:17Circle Wealth Solutions. Welcome to both of you. And thank you so much for joining us today on the
01:22Mutual Fund show. Anant, let me start with you. I thought this is an interesting question to take
01:27up because, you know, the conversation is always about starting your SIPs. But there could be a
01:32time when you need to stop your SIPs as well. Obviously, you won't continue an investment into
01:37perpetuity. When is that point? Hi, firstly, thank you so much for having me on the show.
01:43Always a pleasure talking to you. I personally feel there are three incidences where you need
01:47to stop your SIPs. Firstly, if something has structurally changed in your fund, for example,
01:53fund manager has changed or your fund has underperformed for a long period of time,
01:58for example, it has underperformed for five years and you feel that you have a better option
02:04than there has been change in the fund manager or in the style of management, then is the best time
02:10to stop your SIP. Second, when you think that you have reached your goals, for example, you did SIP
02:16for your home, you have reached to your goals, you have reached to your corpus. Now it is time to
02:21stop your SIPs, get your money back and enjoy your goal. And final important time is when you think
02:28that structurally I should be more placed towards some other cap, for example, right now you are
02:33doing SIP and small cap, but you feel that small caps have given superb return in past, but now
02:38they are overvalued. Probably I am getting more value in mid cap or large cap space, or maybe
02:44my risk profile has changed, earlier I was aggressive, now I am due to my conditions or
02:51my situation and now I am a moderate or a defensive investor and I need to change the aggressiveness
02:57of my portfolio, maybe because of my risk profile change or maybe because of market scenario change,
03:02then is the best time to change your funds. These are probably the three best situations
03:07to change your SIPs, pause your SIPs or stop your SIPs. Okay, so that's very clear,
03:13you need immediate liquidity and remember that is what you have your SIPs going on for,
03:20if there is a crisis definitely do use it, if you have achieved your goal. Now the last one
03:25is a little tricky, Shitesh let me come to you on this. Achieving your goal, what if you have
03:30achieved your goal at a time when you feel that your investments will only grow higher.
03:36Hi Tamanna, hi Anant, pleasure to be with both of you on this show and I think Tamanna,
03:45point is that whenever you plan your investment without any goal then that will not last for long,
03:53it's like you are just waiting for a dry man coming back, whenever there is a destination
03:58which you achieve as a goal, you will end up continuing your investment for long. So I think
04:03it's very important every time first of all we are talking about when to stop SIP or when you
04:07start a SIP, you should align that SIP with a goal and then let's say you have a goal of buying a
04:13home and your target money is 1 CR and let's say the markets have been really good and that's what
04:20happened last 15 years, getting 15% in the morning is what we have seen in many of the funds has
04:26come and you are able to achieve rule of 15 which is 15,000 SIP, 15,000 SIP with 15% and 15 years
04:33and you have got 1 CR and the value of house which you want to buy is around 1 CR, you can
04:38take that money and you can stop that SIP which is aligned with your 15 years goal, that's the
04:43time when you stop the SIP and then you move on for the next goal whatever you want to do and
04:48allocate that fund depending on what type of goal you have. Now why we ask someone to stop the SIP
04:54or let's say someone should stop the SIP is because you don't know what type of goal you are
04:59targeting after this goal because if there's a goal which is less than 5 years then you should
05:05look at some kind of balance advantage fund around 5 years large capish fund between 5 to 7 years
05:10look at large and mid-cap and flexi and focus and multi-cap fund more than 7 years and 10 years you
05:16look at mid-cap and large and mid-cap, 10 years small cap so depending on next goal you should
05:21align your next SIP in that fund so that it should not create fun you know lesser returns
05:30if you have a long-term goal to you know you will not be in a position to achieve your goal
05:35because you have taken an aggressive call in small and mid-cap fund but your goal is 3 years
05:39so this is something which is a very important task when you stop your SIP and start something
05:45new. Okay so you know let me come to one of those portions if your SIPs are if your fund is
05:54underperforming for 6 to 7 months and this is a question I ask often Shruthi I'll come to you for
06:00a follow-up just yesterday on the show I asked one how long should you give a fund and the answer
06:05was say at least about 3 years you're saying 6 to 7 quarters so say a year and a half nearly
06:12two years when do you decide that your money can be spent or utilized in a better way and
06:18what should be the parameter just beyond the times the time frame that we're talking about
06:24let's say if you have as I said 6 to 7 quarters is an underperformance in the fund and if you
06:28see in the same category let's say there's a category which is the same category let's say
06:32we are talking about multi-cap funds or a feisty cap fund in the same category the difference is
06:37huge now so it can be a possibility that let's say one fund manager's child is value the other
06:43one is growth and growth is working out then obviously you know that value will underperform
06:46as growth is doing very well but if in a growth strategy only and in the same category only the
06:53underperformance is more than 6 to 7 quarters then there's a time to actually see that whether
06:58you want to continue with that fund or you know because once there's an underperformance which is
07:03for a couple of years you know then covering that underperformance without taking some
07:10you know some tricky calls or I say there's some aggressive calls it's not possible we have seen
07:16that you know with many of the fund houses unless and until you you are a value strategy fund like
07:21HDFC when Prashant was there they used to have all value you know more towards PSU side and
07:27many of the years those funds have not done well but when PSU started running it started doing
07:31well but that's a difference of approval between growth and value here I'm saying you are in a
07:35growth fund you are in a let's say flexicap fund and there is underperforming from last seven to
07:40eight quarters and that is something is playing out against you that was this is the time for
07:45us to think whether you want to continue with this fund or you want to move on with other fund
07:51okay Anant what is you know your take on this underperformance as a factor to stop your SIPs
07:59and if you are doing that then should you look at reallocating or firstly I feel that you should
08:06look at the category and then decide the time horizon of underperformance at which you are
08:09looking at for example if the large cap fund which is underperforming for probably one and
08:14half two years it's time to switch and probably move out to a more stable fund or index fund
08:19if there is a mid-cap fund which is underperforming for around four years then it is probably a time
08:25to switch because if you are investing in a mid-cap fund you at least need to give three
08:29to four years to your fund manager if you are looking at small cap fund because alpha generation
08:33in small cap is huge you at least need to give average SIP days of 17 1800 days to your fund
08:41manager and then decide on to moving the fund especially if the fund manager and his philosophy
08:45is stable now if you talk about styles of investing growth I feel as perfectly mentioned by
08:51Shetich three to four years is good enough time even two to three years is good enough time but if
08:57you are going with value theme you know by default that in past if you look at 10 years data probably
09:03in three to four years value is outperforming and balance year they are underperforming so you need
09:09to give at least four to five years if you are going with a value style because that is how cycle
09:14works in value style we have always seen underperformance of three four years and then
09:18significant outperformance in the coming few years so if you will be moving out from a value
09:23strategy post investing for three years you will probably be moving out at the most perfect time
09:29okay so value strategy is what you should look at we'll take some queries as well from our viewers
09:35to you know get real life examples of what you should do with your SIPs and when you should
09:41move out of your SIPs Shetich what about a sort of a tactical play as well I mean for investors that
09:48are a little more savvy who are keen to look at sectoral themes because that is one place where
09:54you need to be a little more aware isn't it is it time to for example if I were to ask you if you
09:59have SIPs and infra funds infra funds haven't been doing that well or PSU funds have not been doing
10:04that well is it time to move out should you have factors like that in mind as well I do not demand
10:13is good but right now it's only you see only only and only sectoral and thematic funds paying out
10:19I'm little worried and scared and you know she wasn't seen by many people my message to everyone
10:24there is that you know as you said that tactical play should be 10 percent 12 percent in the
10:30portfolio not an entire portfolio because you are seeing defense funds giving it 1800 percent return
10:35or manufacturing or let's say PSU funds giving very good return and you're parking your funds
10:39there I think a diversified portfolio is a must but yes I agree with you somebody with a little
10:45better allocation a little better risk profile in terms of taking risk they can go to 15 percent
10:52allocation towards your sectoral or thematic right but there are many sectors which can be
10:57really good for clients at this level also but yes tactical allocation should be there
11:02and at the same time you should be aligning your short-term goals on the tactical allocation side
11:06because sector will play out and then it's time for you to move on and add to a diversified portfolio
11:14okay let's start taking some of your queries remember if you want to write in to us
11:18the numbers on your screen our first query is from Rohit age 33 says I'm ready to invest one
11:24crore rupees for the 25 year time horizon should I do a short term SIP that's 10 lakh rupees per
11:31month or a lump sum in the current market what could be the right mix of fund categories to
11:36invest in I don't need this money for rainy day funds fantastic you know congratulations to you
11:42Rohit at 33 you have a one crore corpus to invest with a 25 year time horizon should this let me
11:49come to you first first part of the question should he do a SIP a short-term SIP with 10
11:54lakhs per month or should he do a lump sum my my sense is that he should look at weighing
12:0215 to 16 weeks STP because the problem with us is if he would have been doing this
12:09continuing this SIP for long I would have suggested that as he has a long tenure on his side which is
12:1425 years I think 15 to 16 weeks which is in excess of three three and a half month STP
12:20a weekly STP make much more sense and he can maybe do a five six lakh weekly STP that's what he can
12:27target that and maybe stress the STP a little bit and then make a portfolio of diversified
12:33four five group mutual funds and continue with the continue with his wealth creation goal
12:40so let's take for example if he if he do a combination of index fund or smart beta index
12:47fund and multi-cap and small cap and mid-cap fund either one then if if the portfolio can
12:5514% he can easily make around 25-26 crore and let's say if the portfolio will grow at around
13:0115% then he can make 33 crore but let's say if the portfolio grow at 12% also which is the nominal
13:06GDP growth what we are expecting in next 8-10 years still he can get 17 crore and I think
13:12that's a fairly decent amount of money which he will have but he has to take into account inflation
13:19you know the thumb rule for inflation or formula for inflation is also same it's 72 by r
13:24and you can take inflation at 8% I always take full inflation into account and your value of
13:29money is becoming half every nine years so I'm good that as you said you have one CR at the age
13:35of 33 but at the same time please do a SIP also on a monthly basis on whatever cash flows you can
13:42spare which should be 15-20% of your earnings and allow your money to grow multiple because
13:47whatever amount you think that it's very good 17-18 or let's say 30 crore also by the time 25
13:54years will go by and you'll see that that amount as per inflation is not the right amount so you
13:59know you have to create a social net for yourself and keep saving okay what are the kind of funds
14:09Anant let me come to you with that question and you start with the second part what are the kind
14:13of funds you should put money in if you're starting a fresh say 10 lakh rupees a month
14:18or even a one crore corpus see if we look at present market valuation and since the investor
14:24is having money to invest in lump sum or maybe as it is also suggested in 17 to 18 weeks or
14:31maybe 10 lakh SIP presently I would go for comparatively defensive large cap flexi cap
14:37maybe index funds and multi-cap fund category to start off I know small cap is a brilliant category
14:44it has given over 30% CAGR in last few years but I would use that as a tactical strategy for example
14:50if I see any dip in the market for example if I'm seeing a dip of 10% in large cap and around 15-20%
14:58in small cap and cap probably that will be the time when I would be shifting my money from large
15:02cap to small cap presently looking at present valuations and present scenarios last year also
15:08there is a very interesting data that in small cap as a category we only saw 89 negative days
15:14when a small cap index was negative this is by far the lowest number of negative days we have seen
15:20in small cap index and whenever there are low number of negative days in a particular year
15:24probably in next few years market is comparatively more jittery or comparatively more volatile
15:30so looking at complete scenario complete madness and complete valuation I feel
15:35we have to look at small cap category as a fund because we have 25 year of time horizon but I'll
15:41use that as a technical strategy whenever I see some significant amount of opportunity in the
15:47market and presently I'll go with comparatively defensive funds. And what about the kind of
15:52structure to deploy the money Anand? A lump sum or you would say SIP? I feel SIP of 20 months
16:03can be useful with the mindset that whenever the investor is getting 10% dip he should put in
16:09around 10% of his corpus as a lump sum immediately very simple rule 10% dip additional 10% you will
16:15put at a corpus for example two months later we see a 10% dip he'll immediately pump in 10 lakh
16:21extra for that month or as Siddharth rightly mentioned he can go for 18 to 19 weeks of STP
16:27that also works fine. Okay so a lot of options there for you all right next query coming in
16:32from Sonia aged 52 says I want to invest a lump sum amount of 25 to 30,000 per year for the next
16:42five years suggest some good funds I can invest in so not too much detail there coming in from
16:47Sonia on what is the purpose of the funds or the time horizon but let's let's work with what we
16:52have for a 25 to 30,000 rupee amount Anand I'll start with you a lump sum makes sense?
16:59I think 2500 rupees SIP might be a better option but even if you want to do lump sum we can
17:04probably decide a particular month particular day and follow it throughout the next few years
17:10if time horizon if is also five years I feel a large cap or index fund as a category might make
17:16more sense maybe at max flexi cap category we can look at. Okay and of course there's a five-year
17:23horizon Shruthi do you want to come in on Sonia's query? I think I'm totally you know in sync with
17:31what Anand has said too short as a time so five years is too short as a time and moreover the
17:36peak of the market I think it's good to go defensive maybe some momentum play on the index
17:43side that's what smart data funds they can look at and go to flexi cap fund is what I will suggest
17:49because our age is also 52. Age is also 52 that's correct let's take a look at a few more queries
17:56Dipanshu has written in age 30 says I want to invest two lakh rupees in mutual funds and ETFs
18:02with a time duration of three years please suggest some options now this is an interesting query
18:09because it also you know gives us an opportunity to talk about which one is a better option for
18:14Dipanshu and Shruthi let me start with you first two lakhs in mutual funds and ETFs he says but if
18:21it was an or question MFs or ETFs what would you go with? My sense is that we should or he should
18:30look at balanced advantage fund category you know that's a better play for three years time if he's
18:35he has only three years on his side because it's too short as a time for a pure equity fund and he
18:40should allow fund manager to do his job maybe right now we are at a cusp of almost
18:47peak of interest rate cycle and once you have US rate cut coming new India will follow the same
18:53he can put so many right now in a guild fund long dated guild fund maybe 50 percent and once the
18:59interest rate will play out he can move out and then he can put if some correction is there in
19:04balanced advantage of balance equity hybrid funds that's what I suggest three years is too
19:09less for any direct equity investment whether it's ETF or whether it's mutual fund. Okay
19:19what about you Anand what would be your advice to Dipanshu wants to invest two lakh rupees in
19:24mutual funds and ETFs with a time duration of three years what are the options you could suggest
19:29for him completely in line with Shritej maybe balanced advantage fund or asset allocator fund
19:35which even has some allocation in gold as a asset class probably these two categories are
19:42are the categories that he should look at also if that goal is very critical because he has
19:48specifically mentioned three year time horizon probably he can even place his money in debt
19:52because if that goal is critical and we see some jerks in market for any reason for that sake
19:59then even balance advantage and asset allocator as a category might take a hit so he should look
20:04at the seriousness of his goal if his goal is of top priority which he cannot miss probably keeping
20:10it in debt is also an option otherwise asset allocator or balance advantage fund as a category
20:14makes sense here you know just a follow-up from there Anand he's 30 and has three years
20:23one would expect you would maybe advise someone like this to be a little more aggressive in terms
20:28of equity but your advice is a bit cautious is it because you feel that investors need to brace
20:34for the fact that they might not see the kind of returns they've seen in the last three years
20:38in equity mutual funds see kind of yes more than that I feel time horizon we have is three years
20:46probably we should never compare risk profile with the age probably he might have some liability or
20:52some important goal which is there which might be very serious and of top priority for him
21:00so I don't know the complete view and complete mindset of the punctuality that is why I couldn't
21:05ask him a follow-up question otherwise I would have asked why only three years probably he can
21:09give us five years or seven years then we might have given him a better aggressive option for that
21:15sake and yes presently market is valued putting lump sum here with a three-year time horizon
21:21journey won't be that easy is what I feel
21:25no so okay I get that point we don't know why he's given a three-year horizon and is there
21:32some kind of a necessity which is why you want to protect the capital as well and it's a shorter
21:37time horizon but Shrutish if I were to ask you that and you know that really is the query right
21:41now for investors who have seen a great run-up in their equity mutual fund returns do you think that
21:48there is need of a bit of reality check about whether it will continue in that way if you
21:52stretch the time horizon more in the past and look at 10-year returns they definitely don't
21:58look as exciting as three-year returns so I'm sure what you know you and Anant are gauging
22:05with regard to that he might have some short-term goal but you know I've been meeting a lot of
22:09youngsters of late and they're talking about next three years with regard to that they can
22:15double the money the way they have doubled in last three years so you know this thing this is
22:19something which which need to be measured down and very rightly presented by Anant on this aspect I
22:25think what we have to look at is and this is for everyone who's watching us if your nominal GDP is
22:3112% any company who runs with a big infrastructure not a lot of employees is generating 17-18%
22:38earning growth with expanding profitability margin how we can expect returns from that
22:42company on online stock to give 25-30-40% every year so this is this is something you know
22:50taken into account that you the right expectation from any mutual fund portfolios should be around
22:5713-14% in the morning and believe me at 70% food inflation handsomely you are creating inflation
23:04and creating a wealth for yourself at 13-14% also it's going to be a very good run-up for you if
23:09you focus on the time and the manner I keep on telling on most of the shows that future value
23:15if you actually see how it gets calculated is equal to present value bracket 1 plus r
23:20lowest raised to party so we keep on focusing on return what should one should focus on the time
23:25part if you have time on your side then you see how this compounding actually works then doesn't
23:30matter you are a 13-14% you are sorted you have that wealth creation element on your side you
23:36have that wealth for you which you can enjoy so I think what has happened in the past and I'm glad
23:43many people in the country they have made money but at the same time one need to expect
23:48and listing expectation from markets from here onwards should be 13-14% in the morning
23:53anything which you're getting as a plus should be a bonus to you okay all right Hitesh joins in
24:00and Hitesh's next query is coming in he's age 37 he asks what will be the perfect mix between
24:07large win and small cap if I want to invest 40,000 rupees every month for the next 10 years
24:12I'm looking for a 15% annual return so this seems reasonable for the next 10 years a 15% annual
24:19return or is Hitesh being a little optimistic what should be the mix if he wants to achieve
24:25this goal with a corpus of 40,000 rupees every month he's young I think 50-30-20 is one
24:32one should look at so my problem is that when I say 50-30-20 it should be not the fund
24:38size that you have 20% small cap 30% mid cap and 50% large cap there are many softwares
24:43where you can actually calculate in a large cap also or on the overall portfolio level also
24:48how much is large cap how much is mid cap and how much small cap whenever we say 50-30-20 it's on
24:52the portfolio level at the portfolio level and you can do that like large and mid cap come what
24:57may 35-35% has to be small mid and large in multi-cap come what may 25% has to be in three
25:04categories so you have to calculate on the entire portfolio level that this allocation and this is
25:10very much possible having said that it's always good that whenever he has his you know increase
25:20in salary or increase in business income coming his way he should keep on stepping up so don't
25:24constrain yourself that 40,000 is something which I want to do for next 10 years whenever you have
25:29some money on sideline which you can as a step up on your SIP side just do that because that will
25:34actually create a lot of delta on overall return which you are actually looking at right now.
25:41Okay thank you so much Shruthi and Anand for joining in today and for answering all our
25:47questions quite an interesting show we talked about when to stop your SIPs and of course
25:51how you should look at your investments going forward we've answered a lot of your queries
25:55as well and if you want your queries answered please write in to us the number is on your
25:59screen but that's all the time we have today on the mutual fund show stay tuned a lot more
26:03coming up on the other side on NDTV profit.
26:17you