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Home >Money >Personal Finance >Keep higher investment in domestic share market

Keep higher investment in domestic share market

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The allocation between domestic equity market and others should be reverse—that is, 60% going to the former and 40% to everything else

I have been investing in the following funds every month for the past three years: DSP Tax Saver direct plan ( 3,000); ICICI Prudential US Blue-chip equity direct plan ( 5,000); Canara Robeco Emerging Equity Fund direct ( 2,000); L&T India Value Fund direct ( 2,000); and Kotak Gold Fund ( 5,000). My horizon is 15 years. Is my portfolio well diversified? If not, what changes should I make?

I have been investing in the following funds every month for the past three years: DSP Tax Saver direct plan ( 3,000); ICICI Prudential US Blue-chip equity direct plan ( 5,000); Canara Robeco Emerging Equity Fund direct ( 2,000); L&T India Value Fund direct ( 2,000); and Kotak Gold Fund ( 5,000). My horizon is 15 years. Is my portfolio well diversified? If not, what changes should I make?

—Name withheld on request

—Name withheld on request

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You are investing 17,000 a month in a variety of funds across markets. While that is good, the allocations to individual segments can be fine-tuned. At present, you are investing 30% in a US large-cap fund, and another 30% in gold. This leaves only 40% to domestic equity market investments that are split across diversified funds and a mid-cap tilted fund.

The allocation between domestic equity market and others should be reverse—that is, 60% going to the former and 40% to everything else. There are two main reasons for this: Domestic equity market is likely to be the best long-term bet for returns, and their tax treatment is the most favourable. Towards this, I would remove 1,500 from each of gold and US market allocations and invest them in a domestic equity fund. Seeing that you are lacking a pure large-cap fund investing in India, adding an index fund to your portfolio would be a good idea. As you move forward, you may want to add some debt funds into the mix as well, but for now, this portfolio should be fine.

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