Should I rebalance my portfolio?

I am 35 years old, and have been investing through Systematic Investment Plan (SIPs) in four equity mutual funds for the past 5-6 years.

- Vivek Banka

Over time, my portfolio has become heavily tilted towards mid-and small-cap funds. Should I rebalance by moving some profits into large-cap or hybrid funds, or is it better to continue with my current SIP strategy? -Name withheld on requestIt is a very pertinent one and something that most investors fail to understand the ramifications of.

Over the past 5 years, which is also your time frame of investment, there have been two major cycles, i.e. 1) 2021-2024, wherein midand small caps performed spectacularly and 2) 2025 onwards, where midand small-caps performed very poorly.

Your question relates to a strategy decision: if our objective is to reduce volatility, we rebalance our market-cap allocation from time to time.

If our purpose is to maximize returns, then we let the corpus grow without any intervention.