Ask Mint Money | It is better to deploy lump sums systematically over a period
Ask Mint Money | It is better to deploy lump sums systematically over a period
I am 32 years old and looking for equity mutual funds (MFs) that can give me good returns. I have ₹ 1 lakh in cash and want to make use of this fund. I can also invest ₹ 15,000 per month. How should I build my portfolio?
—Pradip Kumar
Regarding your portfolio, you can allocate 50% of your funds to large-cap funds such as Franklin India Bluechip and ICICI Prudential Focused Bluechip. The remainder of the portfolio can be split between broadly diversified funds such as HDFC Top 200 and DSP BlackRock Equity and small/mid-cap funds such as IDFC Premier Equity fund. Such a portfolio will give you a broad coverage of the market with best-of-breed funds from different fund houses.
I have been investing ₹ 2,000 in SBI Magnum Contra since last year through an SIP. Recently, I started SIPs in HDFC Top 200 ( ₹ 2,000), ICICI Focused Blue Chip ( ₹ 2,000) and HDFC Mid-cap Opportunities ( ₹ 2,000). Is my portfolio on track or should I stop SBI Contra SIP and invest in another fund? I want to invest another ₹ 2,000 per month. My time frame is at least 10 years.
—Sunil Bhelawe
Your portfolio is pretty good as it is, but the fact that there is a fund that could get replaced and another fund that needs to be added gives us an opportunity to make it better. Currently, you are investing 75% of your portfolio in large-cap-oriented funds and 25% in the mid/small-cap sector. Given that the investment horizon of your portfolio is at least 10 years, you could afford to take in a little bit more risk in your portfolio. You can do this in the form of adding a good multi-cap fund such as Quantum Long Term Equity Fund. To replace SBI Magnum fund, you can choose another fund in the same category such as UTI Equity or ICICI Prudential Dynamic.
When you make these adjustments, it will result in a portfolio that is 60% in large-cap-oriented funds, 20% in a multi-cap and 20% in a mid- and small-cap-oriented fund. With a sound choice of schemes, this portfolio can be held for the long term.
Srikanth Meenakshi is founder and director, FundsIndia.com.
Queries and views at mintmoney@livemint.com
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