Mutual Funds

Your Fund Portfolio

Parvatha Vardhini C | Updated on October 05, 2018 Published on September 30, 2018

I wish to invest in equity MFs — I want to hold 60 per cent in a low-risk portfolio and the rest in a medium/high-risk portfolio. However, I have stretched myself too thin in selection of funds. I have invested in the following: SBI Bluechip, HDFC Mid-Cap Opportunities, Franklin India Equity, Kotak Standard Multicap, Franklin India Smaller Companies, HDFC Small Cap, ABSL Tax Relief 96, Axis Long Term Equity, ICICI Pru Equity & Debt. All investments are in growth plans, barring Axis. How should I rebalance/consolidate to maintain my overall target allocation?


You have not mentioned the amounts that you are investing in each of the funds. Hence, it is not possible to check your current allocation in order to take corrective action.

However, among your holdings, ICICI Pru Equity & Debt — which invests up to 35 per cent of its corpus in debt and the remaining in equity — and SBI Bluechip — which invests in large-cap stocks — can be considered relatively low-risk funds.

Franklin India Equity and Kotak Standard Multicap invest across market capitalisations.

These funds can be considered riskier than aggressive hybrid and large-cap funds, but less risky than mid- and small-cap funds.

The two tax-saving funds — ABSL Tax Relief 96 and Axis Long Term Equity — can also be considered in the mid-risk category. HDFC Mid-Cap Opportunities, HDFC Small Cap and Franklin Smaller Companies are the riskiest of the lot.

All of them are reasonably good choices. There is no fixed rule to decide on the ideal number of funds to hold in a portfolio. It could depend on the total amount you want to invest as well as your ability to closely monitor a large portfolio.

Nevertheless, you can do with some pruning to maintain a more compact portfolio. For the 60 per cent you want to allocate to relatively low-risk funds, invest across ICICI Pru Equity & Debt, SBI Bluechip and Axis Bluechip.

The remaining can be spread across Kotak Standard Multicap, ABSL Tax Relief 96 and Franklin Smaller Companies.

It is not clear as to why you have chosen the dividend option for the Axis fund alone. Mutual funds are not obligated to pay dividends regularly.

I have started investing in the following funds (regular/direct plans, growth option), at various points in time, during the past two years through the SIP route: Mirae Asset India Equity - ₹2,000, Axis Long Term Equity - ₹5,000, Mirae Asset Emerging Bluechip - ₹5,000, HDFC Mid-Cap Opportunities - ₹3,000, DSP Equity Opportunities Fund - ₹4,000, Kotak Standard Multicap - ₹4,000, Principal Emerging Bluechip - ₹3,000, Invesco India Contra - ₹3,000, Reliance Small Cap - ₹3,000. All these are for two goals — one, my new-born’s higher education; two, wealth appreciation to create a sizeable corpus in 15-20 years. Kindly review my portfolio.

Sandeep Sesetti

You currently invest ₹32,000 every month through SIPs. Assuming you start now and your portfolio earns 12 per cent compounded annual return, you will have a corpus of ₹1.5-2.91 crore in 15-20 years. Considering that you have been investing for two years, your corpus may become bigger.

Also, your portfolio may fetch more than the estimated 12 per cent, pushing up your nest egg.

Make sure you diversify to add debt instruments from small savings schemes, bank/corporate FDs.

You hold a combination of large- and mid-cap funds (Mirae and Principal Emerging Bluechip, DSP Equity Opportunities), multi-cap (Mirae India Equity, Kotak Standard Multicap, Invesco India Contra ), mid- and small-cap (HDFC Mid-Cap Opportunities, Reliance Small Cap) and tax-saving (Axis Long Term Equity).

This portfolio is suitable for someone with a moderate-to-high risk appetite. Since you are investing for the long term, you can add pure large-cap funds to reduce the risk quotient.

You can also prune your existing holdings a bit to avoid duplication. Replace Principal Emerging Bluechip and Mirae India Equity with pure large-cap funds such as ICICI Pru Bluechip and SBI Bluechip.

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