Bharat22 ETF heavily weighted towards cyclical stocks. Exit in phases on rallies2 min read . Updated: 13 May 2020, 10:24 PM IST
SIPs are a great way to invest as they help you to be disciplined in investments, ensuring that you do not skip investing, and allow you to invest smaller and manageable sums
I am saving for the long term (15-18 years) and have a moderate to aggressive risk profile. I invest in systematic investment plans (SIPs) of Axis Multicap fund ( ₹7,500), Mirae Asset Emerging Bluechip ( ₹10,000) and SBI Small Cap ( ₹2,500). I want to add another SIP of ₹5,000. Please suggest a multi-cap fund for the long term. Also, do I need to make any changes to my portfolio?
You have a high-risk portfolio, which is 100% into equity. With your time frame, you can afford to take the risk as long as you can ride market volatility. I would recommend one change—to replace Axis Multicap fund, a relatively young fund, with a more tried and true performer from the same fund house, Axis Focused 25 fund. You can consider Kotak Standard Multicap fund as another multi-cap fund.
My family had invested ₹10 lakh in Bharat 22 ETF’s initial public offer (IPO) two years ago. The present net asset value (NAV) is much below the issue price. Should we stay invested?
Bharat 22 ETF is heavily weighted towards cyclical stocks, which have borne the brunt of market correction. It’s time to wait and watch and see the depth of economic impact and corporate earnings. Some stocks in the index may be value plays, but they may see lasting pain. Others may not be fundamentally strong.
You can wait and exit in phases based on rallies, and invest in quality PSUs.
I have been investing in SBI Magnum Multicap fund. I keep adding my saving in a year or six months as a lump sum to the portfolio, which is three years old now. Is SIP a better option, and is there any disadvantage in investing a lump sum?
SIPs are a great way to invest as they help you to be disciplined in investments, ensuring that you do not skip investing, and allow you to invest smaller and manageable sums. The secondary benefit is that you are able to invest at different price points and avoid making timing errors. There’s no harm in making multiple lump sum investments . By investing at different times, you will still be averaging costs and reducing timing errors. If you are careful enough to ensure that you invest at different points, you do not need to have an SIP. Else, it would be easier to set one up.
Srikanth Meenakshi is co-founder, PrimeInvestor.in. Queries and views at firstname.lastname@example.org