Cluttered Portfolio: Need Advise on Cleaning Up and Moving On

[caseyanne2]

Hi All

I've been investing in MFs for years, starting with small amounts. Every time I had additional money to invest, I opened a new account with a different platform, and started a new SIP. I also opened SIPs in my wife's name.

Today, my wife and I have around 25 different mutual funds, with 15 ongoing SIPs. These are all small amounts, from 2K to 8K. We have accounts on 4-5 different platforms like ICICI, Kuvera, etc.

I recently sat down and made an excel, and found that many of my ongoing SIPs are below their category average.

Going forward, I plan to consolidate, pick 5-6 funds (mix of large/ mid/ flexi caps), and only invest in those. I've still got the following questions, so looking for some suggestions.

• Existing Funds- should I KEEP or SELL existing holdings and move to the new 5-6 Funds I choose? I can wait till they are LTCG, and then sell. I don't mind a slight financial hit if it helps to simplify. Is there value in simplifying, or should I just hold the 25 and let them grow as dormant funds? I have a 8-10 year horizon, with no immediate large financial expenses planned.
• Should I only sell holdings that underperform/ match the index, and keep the existing holdings that comfortably beat the index? This will be around 8-9 of my 25 funds. Again, same philosophy of simplify vs diversify.
• I am thinking of 3 trading platforms- Coin, Kuvera and maybe Groww. The reason is that I want some investments in my wife's name, and some in mine. The plan is to picks funds A, B, C, D and E, and buy ABCDE in Groww in my wife's name, and buy ABCDE in Kuvera and Coin in my name. The logic is to spread out my investments, in case there is a short term problem with Kuvera or Groww, and I need to withdraw money. Is this a good idea, or should I only stick to two platforms, Groww (wife's name) and Kuvera (my name)?
• Is there any value in getting a fee-only financial advisor to help with the clean-up and to recommend funds? I can DIY, but I don't mind paying 20-25K if it will make a difference. My DIY plan is to look at top funds on Moneycontrol/ Groww/ Value Research Online, and pick 5-6.
• Any difference in platforms between Kuvera, Groww and Coin? I have a lot of holdings in ICICI Direct for legacy reasons, but will stick to direct funds from now.

Assumptions: I have debt investments (PF), 6 months expenses (FD), and have a moderate-risk philosophy (6 on 10, if 1 is FD, 4 is index fund and 10 is small cap funds). I don't mind paying tax on any redemptions, but the redemptions themselves need to make sense.

Any help or suggestions would be welcomed. Thanks in advance!

 

[zashmaster]

@caseyanne2 These are good set of questions. It would have been nice if the situation is not what it is. But you are definitely on the right track to make it better. I presume that you have picked the 4-5 funds that you plan to use from now on.

• Since you mention many of the amounts are small, it may be just be better to start weeding out, mercilessly, from the bottom. Whatever is long term, sell it and move the proceeds in one go to one or more of the selected funds.
• If you want to simplify, you would have to do this anyway.
• All these platforms are just like an electronics superstore. You can buy many stuff from many brands. Once you take it home, you deal with the manufacturer for any support. You can just use the same platform for both of you. (And btw, if the income is yours, you get little benefit in investing in your wife's name.)
• (Disclaimer: I am a flat fee advisor myself.) Most of the value from a fee-only planner is in the planning; their portfolio would mostly be simple. But it is possible that their help could help you to keep the number of funds small.
• There are differences between Coin - forces you into demat form, and others. It is mostly a matter of personal preference. There are also platforms like mfcentral and mfu which are more by the industry itself.

 

[caseyanne2]

@zashmaster Thank you! This is really helpful. I'm thinking of weeding out slowly, to optimize on tax.

My wife has her own income , but has left the decisions to me. The plan is that our portfolios mirror each other.

 

[robhandy]

@caseyanne2 You say that you don't mind paying tax on redemptions, so you already know what to do. Start axing those funds. Get as much LTCG redemptions as you can before 31 march. Do the rest after that. No point in waiting IMO if your portfolio is that scattered and it's triggering your OCD.

 

[caseyanne2]

@robhandy Got it, thanks! I'm also thinking of parking the dormant investments for some time, and selling them as and when I have big ticket investments.