Your fund portfolio

Through the SIP route, I have been investing ₹5,000 each in ICICI Prudential Top 100 and Aditya Birla SL Equity, and ₹2,000 each in L&T Midcap and SBI Blue Chip, for one-and-a-half years. I plan to invest for a minimum of five years. Should I continue investing in these funds?

Also, I want to start investing for my two-year-old daughter’s higher education. Which specific fund should I consider? Is it possible to have an MF portfolio in a minor’s name?

Yadukrishnan

Most of the funds you have chosen have had fairly good performance track records over the years.

However, you can exit ICICI Prudential Top 100. This fund is now called ICICI Prudential Large & Mid Cap after the market regulator SEBI’s new rules on naming schemes and sticking to defined mandates.

ICICI Prudential Large & Mid Cap will be a multi-cap fund. Its earlier track record has not been top-notch.

You can consider switching to Kotak Standard Multicap (earlier Kotak Select Focus), which has delivered top-quartile returns over the past five years.

You can continue investing in the other funds in your portfolio – Aditya Birla SL Equity, L&T Midcap and SBI Blue Chip.

Your portfolio would work more optimally if you save for specific goals, rather than just for a random time-frame — in your case, five years. Though this time-frame is reasonable, risks can be better aligned if the goal, time-frame and risk appetite are known.

It is good to note that you would like to save for your daughter’s education so early. You can open a mutual fund account in her name and invest separately.

You can consider ICICI Prudential Bluechip (earlier ICICI Prudential Focused Bluechip), Motilal Oswal Multicap 35 (earlier Motilal Oswal MOst Focused Multicap 35) and HDFC Children’s Gift. These funds fall under the large-cap, multi-cap and balanced categories, respectively.

Start with one of these funds, based on your risk appetite, and add other schemes as your surplus increases.

Have a target corpus in mind and save accordingly. A year or so before your goal, or if your target is achieved early, exit the funds and move the proceeds to safe debt avenues.

I currently invest in two funds — ICICI Prudential Bluechip and Mirae Asset Emerging Bluechip. I had earlier asked for an addition of one more SIP and you had suggested Aditya Birla Sun Life Pure Value (mid-cap).

Is it necessary to have a large-cap fund in my portfolio? I wish to construct a portfolio with two multi-caps and two mid-caps for 10-15 years. What do I do with ICICI Bluechip fund?

Sumant Kumar Das

To clarify, Aditya Birla Sun Life Pure Value is not a mid-cap fund. It is a multi-cap scheme with a focus on value-based investing. It has a solid track record, and would be a suitable addition for a long-term goal.

Large-cap funds lend stability to any portfolio. Over the long term, they tend to reasonably beat their benchmark.

If you construct a portfolio with mid- and multi-cap funds alone, the risk profile of your holdings would increase substantially. Large-caps tend to be less volatile than mid-caps.

You can therefore continue investing in ICICI Prudential Bluechip, Mirae Asset Emerging Bluechip and can start SIPs in Aditya Birla Sun Life Pure Value. If you want another mid-cap fund, you can opt for L&T Midcap, a scheme that has delivered spectacular returns over the past five years.

Review the schemes in your portfolio once a year and take corrective action, if necessary.

Send your queries to mf@thehindu.co.in.

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