Your Fund Portfolio



I am 31 years old. I have invested lumpsums of ₹12,000 in Aditya Birla Sun Life Top 100, ₹19,000 in Franklin High Growth and ₹5,000 in Franklin Smaller Companies. I am also making SIP investments of ₹1,000 each in DSPBR Micro Cap and Aditya Birla Sun Life Frontline Equity. Now I want to invest a lumpsum of ₹10,000 and also want to start an SIP. Please guide me.

Anu Jag

The funds that you have chosen for lumpsum investments — Aditya Birla Sun Life (ABSL) Top 100, Franklin High Growth and Franklin Smaller Companies — have good track record of performance.

You have also ensured a good mix of funds that focus on stocks in different market capitalisation buckets. While Aditya Birla Sun Life Top 100 is large-cap oriented, Franklin Smaller Companies is small-cap oriented. Franklin High Growth is a multi-cap fund that has a mandate to invest across large-, mid- and small-cap stocks, taking greater exposures to whichever segment is the flavour of the season.

That said, it is not clear when you have invested in these funds, the size of your gains so far, and whether you need the corpus for any upcoming financial need in the near to medium term.

Since the market is touching new highs everyday and small- and mid-cap stocks are especially overheated, funds focused on these segments may take a sharp beating should the markets turn bearish.

If you don’t have the appetite for high risk, you can probably move your investments in Franklin Smaller Companies to Franklin Bluechip, a large-cap fund. Ditto with your ongoing SIPs in DSPBR Micro Cap, which can be switched to less risky funds from the same fund house such as DSPBR Opportunities or DSPBR Equity, which are multi-cap funds.

You could continue with your SIPs in ABSL Frontline Equity, which is a solid performer among large-cap oriented funds. Regarding the new SIP, you can probably divide the sum between DSPBR Opportunities /Equity and ABSL Frontline Equity itself rather than looking for another fund. For the reason that the market is at a peak, you can avoid new lumpsum investments in equity funds at this point in time. Although your fund choices are good, the way you have gone about your mutual fund investments can be streamlined. Instead of making ad hoc SIP/lumpsum investments, you can arrive at a corpus requirement for specific goals, such as buying a house or your retirement and invest regularly through SIPs to reach each goal.

My husband is 27 and is working for a private firm. He has an income of ₹25,000 per month. I am a housewife and we are expecting our first child. My query relates to the selection of mutual funds which will aid us in creating savings. We are willing to invest ₹10,000 per month. Please advise us regarding the same.

Rani

Mutual funds are definitely a good vehicle for savings. But they are subject to the risk of the ups and downs of the equity and debt markets. Hence, they will work well if you are looking to save for long-term goals, like your child’s higher education.

Since you are not employed and your husband earns ₹25000 per month, you need to rethink if you can save ₹10,000 month after month. Your routine expenses may increase after the new addition to your family. Moreover, you need to set aside sums for small emergency needs, medical or otherwise. If you can put in ₹10,000 every month, divide the sum equally among Quantum Long Term Equity, SBI Bluechip, Kotak Select Focus and Franklin Prima Plus. While the Quantum fund is a pure large-cap fund, SBI Bluechip has a large-cap slant with slight exposure to mid-cap stocks from time to time. The latter two are multi-cap funds.

This portfolio will suit a moderate risk appetite. If you feel that you cannot invest ₹10,000, you can reduce your investment proportionately in each of them. Alternately, you can choose one large-cap and one multi-cap fund.

Send your queries to mf@thehindu.co.in

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