It’s not advisable to invest in multiple schemes of the same AMC2 min read . Updated: 25 Dec 2019, 10:36 AM IST
- Review your portfolio regularly to ensure that you are investing in funds that fit your profile and requirements
I have systematic investment plans (SIPs) in Mirae Asset Emerging Blue Chip Fund ( ₹4,000), Mirae Asset Tax Saver Fund ( ₹1,500), Axis Blue Chip Fund ( ₹1,500), Axis Midcap ( ₹1,000) and Franklin India Focused Equity fund ( ₹1,000). Are these funds good for an investment horizon of 25-30 years?
The funds that you are investing in are all very good, with a solid track-record and consistent performance. You are investing close to 50% of your portfolio in a large-and-mid-cap fund (Mirae Asset Emerging Blue Chip fund) and the rest in a variety of large- and mid-cap funds. You can continue with this portfolio, but whether or not they will be good for the next 25-30 years is a tough thing to say. The world of mutual funds will keep evolving both from the fund management perspective as well as from the market perspective. So it’s important that you review your portfolio regularly to ensure that you are investing in funds that fit your profile and requirements.
I would like to know if my current portfolio is okay or I need make some changes. I have SIPs in the following funds: HDFC Small Cap ( ₹8,000), Kotak Emerging Equity ( ₹4,000), Axis Midcap ( ₹4,500), Axis Bluechip ( ₹8,000), Axis Multicap ( ₹4,500) and Axis Focused 25 ( ₹4,000). I have a moderate risk appetite. I have been investing in these schemes since 11 January 2019 each month. My short-term goals are accumulating up to ₹7.5 lakh by June 2020 and up to ₹2 crore by 2030.
You have over half your SIPs in high-risk funds, which is not appropriate given that you have a moderate risk profile. You also have over half your SIPs in funds from the same asset management company and, therefore, there are overlaps in portfolio and style. Axis Bluechip and Axis Focused 25, for instance, have very similar portfolios. None of these funds can be used for your short-term goal; markets can correct in a short-term period and you face the risk of capital erosion. Make separate investments in debt funds and fixed deposits; these are the best fits for time frames of less than three years. For your long-term goal, you will find it hard to reach ₹2 crore even if we assume an aggressive return of 15%. A moderate-risk portfolio will give lower returns. Increase the SIP amounts whenever you can.
You can restructure your SIPs as follows: Invest ₹6,000 each in Axis Bluechip and Kotak Standard Multicap, ₹5,000 each in Kotak Emerging Equity and HDFC Smallcap, ₹3,000 in Invesco India Contra and ₹8,000 in ICICI Prudential Corporate Bond.
Srikanth Meenakshi is co-founder, PrimeInvestor.in. Send in your queries and views at email@example.com