Need Advice on Personal finances
Is this over diversification? Age:22 Nifty50 ETF: 20% Sensex ETF: 20% Nasdaq: 20% Nifty Next 50: 20% Nifty 50 EQL W: 10% Small Cap Fund: 10% Emergency fund, gold and bonds are separate, please suggest a better approach.
Nifty 50 and sensex etf can be clubbed they grow in similar rate and have similar comoanies.you can check past data and take call.
Sensex, Nifty 50 eql and Nifty 50 not sure it's diversified. They all have sma e companies
I would go with this
Nifty index or etf
Nasdaq
Nifty next 50
Small cap
1. N50 and Sensex :: there will mostly be a portfolio overlap of 60%. Logically they should not exist together in one portfolio, until one has a strong reason for the same. We won't suggest it.
2. Same for N50 Eql Wt: has a portfolio overlap.
3. Because of point #1 and #2, it is like investing in the same set of stocks via three ways / category / fund. Doesn't give any advantage or does not increase any returns or does not reduce any risk.
4. Not sure about how the allocation %age across each category have been arrived at. Does not seem to be working out for any logical finance strategies or even no alignment to any psychology.
5. Investing N50 + NN50 :: market cap wise, you will end up investing in almost 90% of the market companies in India.
6. Nasdaq -- not sure how this invesentment is made. If is via a fund/ETF from an Indian AMC, mostly you are overpaying and you just don't know it today. Let fund manager of a flexicap fund do it. It's cheaper that way.
7. %allocation in these categories needs a serious check.
8. Whatever you had done/ trying to do --> can be achieved mostly with only 1 actively managed flexicap fund. This will help reduce your time spent in managing a lot of funds, better risk management, proper hedging, and cash management.
Makes sense? As needed, we can discuss more on this and in much depth and details.
