There are at least 1,000 mutual fund (MF) schemes to choose from. Picking the right one or the one that suits your style is tough. That’s where Mint50 comes in. We have chosen 50 schemes across equity- and debt-oriented categories that we feel you should choose from.
However, you must not invest in all of them. Pick and choose around seven to 12 schemes from Mint50 to build a portfolio that suits your goals.
Don’t worry if schemes, you are already invested in, are not a part of Mint50. Not all schemes that are outside Mint50 are bad. Just because your existing scheme is not a part of Mint50 does not mean you must sell it. While poorly managed schemes are aplenty in the market, there are many that are decent, but not a part of Mint50 because we think these are better alternatives. Mint50 is not a guide to existing investments. Refer to it if you choose to invest afresh.
After ascertaining how much you want to put in equity and how much in debt funds, take a core and satellite approach. The “core” schemes are the rock solid, long-term performers that come with a good track record. You can consider staying invested in them for a long time. Depending on your risk profile, this should form a significant chunk of your portfolio.
The “satellite” portion can be used to add the returns kicker or a flavour to your portfolio, such as thematic, infrastructure funds or those that have a promising track record but are relatively new. If you are planning to invest afresh, start by putting money in large-cap funds and later diversify into mid-cap funds.
One last thing: Morningstar India pitches active and passive funds in the same category. So, it is possible that passive funds, such as Benchmark Nifty BeES and Franklin India Index Fund, have a lower Morningstar rating. In rising markets, exchange-traded funds (ETFs) and index funds typically underperform actively managed funds and, hence, a lower star rating. But since a passive fund’s mandate is never to outperform the index, but to mimic it, a lower rating doesn’t matter.