How many mutual funds do you invest in?

[sumit_yadav]

I started investing in 2012 and over time, I have made investments in 29 mutual funds. Currently, I am only investing in 5 Mutual Funds via SIPs across different categories. I want to consolidate my current investments. What approach should I take?

1. SWP (Systematic Withdrawal Plan)
2. Redeem all at once
3. STP (Systematic Transfer Plan)

 

[BVCBVC is verified member.]

I started investing in 2012 and over time, I have made investments in 29 mutual funds. Currently, I am only investing in 5 Mutual Funds via SIPs across different categories. I want to consolidate my current investments. What approach should I take?

1. SWP (Systematic Withdrawal Plan)
2. Redeem all at once
3. STP (Systematic Transfer Plan)

1. SWP ideally suitable for people who are planning to retire or retired. (if you have large corpus and if you want to enjoy the life you can do this)
2. Redeem it if you need funds or worried about recession (Park it in Debt funds or Bonds)
3. Same as 2 (If you want to protect the corpus and worried about volatility)

 

[sumit_yadav]

1. SWP ideally suitable for people who are planning to retire or retired. (if you have large corpus and if you want to enjoy the life you can do this)
2. Redeem it if you need funds or worried about recession (Park it in Debt funds or Bonds)
3. Same as 2 (If you want to protect the corpus and worried about volatility)

It sounds like if I want to continue to stay invested, I don't have the option to get rid of the junk that I have collected in these years. The funds have become difficult to manage/ track.

 

[devine_mortal]

1. SWP ideally suitable for people who are planning to retire or retired. (if you have large corpus and if you want to enjoy the life you can do this)
2. Redeem it if you need funds or worried about recession (Park it in Debt funds or Bonds)
3. Same as 2 (If you want to protect the corpus and worried about volatility)

For 1 and 2, you'll have to pay capital gains tax. For 3, if the switch is between the funds of same house and category, i.e. equity to equity, then no tax otherwise it'll be taxable.

 

[sumit_yadav]

For 1 and 2, you'll have to pay capital gains tax. For 3, if the switch is between the funds of same house and category, i.e. equity to equity, then no tax otherwise it'll be taxable.

STP is always in the same fund house and technically they sell and buy the MF units.

 

[sri_cc]

1. SWP ideally suitable for people who are planning to retire or retired. (if you have large corpus and if you want to enjoy the life you can do this)
2. Redeem it if you need funds or worried about recession (Park it in Debt funds or Bonds)
3. Same as 2 (If you want to protect the corpus and worried about volatility)

great points, one more thing I would consider is, taxes and make redemptions more efficient considering them
upto 1.25L, there are no LTCG taxes, you can make use of this

 

[sri_cc]

It sounds like if I want to continue to stay invested, I don't have the option to get rid of the junk that I have collected in these years. The funds have become difficult to manage/ track.

if you want to stay in equity itself, you can transfer the money from all the junk funds to your main 5 funds
basically, redeem all other funds and then invest the same into these 5 funds
you might need to pay taxes according to your situation
consider this a good lesson, even I was in the same boat when I started, about 15 funds, but right now I only have 3
all the best

 

[sumit_yadav]

if you want to stay in equity itself, you can transfer the money from all the junk funds to your main 5 funds
basically, redeem all other funds and then invest the same into these 5 funds
you might need to pay taxes according to your situation
consider this a good lesson, even I was in the same boat when I started, about 15 funds, but right now I only have 3
all the best

Thanks! Taxes (LTCG) is the penalty for making such mistakes. Life Lesson!