debt investments, equity-heavy fund portfolio, SIP, systematic investment plans, Mirae Asset Large Cap Fund, ELSS, long-term portfolio,
Over the past six months, I have been investing ₹41,000 every month through systematic investment plans (SIPs) in the following funds: ₹4,000 each in Mirae Asset Large Cap Fund, Axis Blue Chip Fund, Mirae Asset Large and Mid-cap Fund, Motilal Oswal Multi Cap Fund and SBI Small Cap Fund; ₹3,000 each in Kotak Standard Multi-cap Fund, Axis Focused 25, L&T Mid-cap Fund, Kotak Emerging Mid CapFund, Axis Long Term Fund (ELSS) and Mirae Asset Tax Saver Fund (ELSS); ₹2,000 in Motilal Oswal Tax saver (ELSS); and ₹1,000 in Tata Digital Fund. My investment horizon is seven years and I have a good risk appetite. Have I selected the right funds for growing my corpus, or do I need to make changes to my portfolio?
You are investing roughly 20% of your investible corpus in two large-cap funds, 35% in diversified funds, 25% in small- and mid-cap funds, and the remaining in tax-saving funds (apart from a small allocation to a sector fund). The overall asset allocation is fine for an aggressive portfolio, although your time-frame of seven years is a bit of a concern. This is right at the edge of what can be considered a long-term portfolio, and you may want to think about adjusting your portfolio by bringing in some debt allocation to keep it balanced.
There are also too many funds for such a portfolio. You can easily bring down the portfolio from 13 funds to half as many and still have a sound set of investments. For example, you could have a good portfolio with one large-cap, two multi-caps, two small- and mid-cap funds, and two ELSS funds, and have all the diversification you need across fund houses, market segments and sectors.
Further, given your time-frame, do remember that as you near the end of your investment tenure, you would need to start de-risking your portfolio by shoring up your profits to more secure debt instruments.
Srikanth Meenakshi is co-founder, PrimeInvestor.in. Send in your queries and views at firstname.lastname@example.org