The banking, financial services and insurance sector hasn't run-up as much as the other sectors, according to Nikhil Kothari, director of Etica Wealth Management Pvt. "Diversified funds have 20–25% money in BFSI funds," he said.
"From the viewpoint of a fund house, the market has expanded significantly. Previously, only banking companies were present. But now, mutual fund companies and insurance companies have also emerged. Therefore, those sectors are not experiencing a reduction in interest rates," he said in terms of rate cuts.
"From a portfolio perspective, the clients should have both types of funds—a fund with a reasonable AUM and another one with a legacy fund, for a more diverse portfolio," said Kothari, while explaining the rationale of a flexi-cap fund.
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Query 1: I have invested Rs 3 lakh in Parag Parekh Flexi Cap Fund and am planning to invest Rs 50,000 via SIP in the same fund. How long will it take for me to garner a corpus of Rs 1 crore?
Name: Suraj Kumar | Age: 30 years
Nikhil Kothari: This is a very good fund. You should continue investing in it. You can expect to reach your milestone in 7.5 to 9 years.
Query 2: I want to invest Rs 25 lakh in mutual funds. Can you recommend a few schemes?
Name: Ganesh Gomu | Age: 57 years
Nikhil Kothari: As you are close to retirement, you have to divide the money into four different buckets. The first bucket will be your equity-saving fund. The second set, you need to invest in a hybrid fund. The next set in a flexi-cap fund and the rest in a multi-cap fund.
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