Is my Rs 35,000 monthly mutual fund portfolio balanced for high-risk, 15+ year wealth creation?

I have been investing in mutual funds for a year and have now finalised my portfolio to continue for the next 15+ years. My risk appetite is high, and my monthly investment allocation is Rs 35,000 as follows: PPFAS Rs 9,000 (25.7%), Nifty50 Rs 5,000 (14.3%), HDFC Midcap Rs 7,500 (21.4%), Bandhan Smallcap Rs 6,000 (17.1%), Gold ETF Rs 1,500 (4.3%), and Debt – ABSL Liquid Fund Rs 6,000 (17.1%, earmarked as an emergency fund targeting ₹2 lakh).

Does this allocation strike the right balance between growth and risk? Should I increase exposure to large caps or diversify further across categories? After 1 year of investing in MFs, I have selected these funds and this amount to continue for next 15+ years.

Advice by Rajani Tandale, Senior Vice President, Mutual Fund at 1 Finance

From what you’ve shared:

· Time horizon: Long (15+ years) → you have the capacity to take risk and ride through volatility.

· Risk appetite: High.

· Track record: You already have a one-year investment history and are now finalising your “go forward” portfolio.

· Emergency fund: You are targeting ₹2 lakh in a debt/liquid fund (ABSL Liquid).

· Monthly deployment: 35,000, of which 29,000 is into equities/gold and 6,000 is earmarked for the emergency fund.

The debt/liquid allocation is rightly kept separate as an emergency buffer and not for returns. However, I don’t yet have your holistic picture (age, profession/industry, family background, dependents, liabilities, home ownership, or other assets). A comprehensive financial plan needs those details. As a general guideline, try to maintain 6–12 months of expenses as emergency reserve across liquid/debt instruments and savings accounts.

Before we optimise mutual fund allocations, it’s critical to ensure your risk protection layer is in place:

· Health Insurance: Relying only on a corporate health policy is risky. If you change jobs or face a break in employment, you may lose cover. Having a personal health insurance policy (₹10–20 lakh base cover + top-up if needed) ensures continuity and protects you and your family against large medical expenses.

· Term Life Insurance: If you have dependents, loans, or liabilities, a pure term plan is non-negotiable. Cover should ideally equal 12–15× annual income + outstanding liabilities. This ensures your family’s financial security is intact in case of unforeseen events.

Only after these pillars are in place should you scale equity allocations for long-term wealth. Without them, even the best portfolio could collapse under a health emergency or income disruption.

Portfolio observations

· Your equity allocation (29,000) is tilted significantly toward mid- and small-cap funds. Solely relying on these categories may not be ideal because valuations in this segment are currently stretched - several mid/small-cap funds have restricted lump-sum investments due to overheating.

· A flexi-cap fund makes more sense for long-term wealth creation. The fund manager has the flexibility to shift between large, mid, and small caps based on relative attractiveness.

· Your current choice, PPFAS Flexi Cap, has a conservative style with high cash levels (~23%), which can act as a drag in bull markets. For an investor with a high-risk appetite and long horizon, a fully invested strategy may suit better - e.g., HDFC Flexi Cap has historically stayed invested and has a strong track record.

· The Nifty 50 index fund is an excellent low-cost, long-term core holding.

· Gold ETF allocation adds diversification, but you may also consider

· Silver ETF for an additional hedge against equity downturns and inflationary cycles.

Bottom line: A strong portfolio without a holistic plan is like a fast car without a steering wheel. A qualified advisor aligns products to purpose, keeps you on course, and meaningfully increases the odds you’ll actually meet your milestones.