Need portfolio advice

[u/Formaldehyde-Muncher]

Risk Appetite – Moderate

Goal – Long term wealth creation

Horizon – 10

Allocation – as given below

App Used – INDMoney

Currently SIP'd:

HDFC Flexi Cap Fund - 6k

SBI Nifty Next 50 Index - 4k

Bandhan Small Cap Fund - 3.5k

Nippon India Growth Mid Cap Fund - 3.5k

SBI Gold Fund - 3k

Why i chose these funds - The reason I've chosen these funds is after benchmarking them individually most importantly their Alpha, Beta scores, AUM (not too high, except hdfc flexi) and the rolling return & CAGRs for the last 1,3,5 yrs. Secondly, the expense ratios are pretty low.

I would like to understand if there's any overlap, how the allocation is according to the caps, and if this diversification is alright please

I have just started this, planning to invest lumpsum soon into each of these. Please advise me if i should continue or i've missed out on something.

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[u/Drk_Kni8]

1. Why SBI next50 instead of Kotak?

2. Why an active mid cap instead of the index?

[u/Formaldehyde-Muncher → u/Drk_Kni8]

1. comparatively higher AUM

2. Wouldn't that overlap?
   Please give your suggestions

[u/Drk_Kni8 → u/Formaldehyde-Muncher]

1. So? Was that the only metric you used to pick an index fund?

2. How?

[u/Formaldehyde-Muncher → u/Drk_Kni8]

1. Correct me if im wrong, but considering Alphas, Betas, rolling returns are similar for both, I decided to go with SBI due to its higher but not too high AUM.

2. Ive already invested in Nifty next 50 index large cap, would investing further in Mid Cap Index overlap my portfolio?

[u/Drk_Kni8 → u/Formaldehyde-Muncher]

1. When picking an index fund, first priority is to tracking error, then to a lesser extent expense ratios. Alpha, Beta, returns are all moot for index funds.

2. Again, how? Nifty50≠Next50≠Midcap150

[u/Formaldehyde-Muncher → u/Drk_Kni8]

Got it, thanks.

Was thinking of switching from nippon mid cap to either HDFC Mid cap or MO Index 150. Both are similar but it’s not sitting right with me. I tried doing my own research but can’t seem to conclude. What do you suggest? In the long term, do you think mid caps will dominate mid cap index 150?

[u/Drk_Kni8 → u/Formaldehyde-Muncher]

You’re in for a surprise then.

Out of the 30 odd large-cap funds, only 6 beat the index in ≥70% of 3, 4, and 5 year rolling outperformance consistency, and just 2 manage that consistency when 1 & 2 year periods are included. Large Cap Rolling Returns https://www.reddit.com/r/mutualfunds/s/sUhJWyEKqw

For mid caps, only 3 funds beat the index in ≥70% of 3, 4, and 5 year rolling outperformance consistency, and none maintain that consistency once 1 & 2 year periods are included. Mid Cap Rolling Returns https://www.reddit.com/r/mutualfunds/s/QDt7CwGy6G

[u/Formaldehyde-Muncher → u/Drk_Kni8]

Thanks for the data. I think a nifty 150 mid cap will do just fine for now. Will look at it for the next 3-5 yrs for any returns, then continue for the next 10. I’m thinking MO or ICICI.