Replace funds rather than adding more to an equity-heavy portfolio1 min read . Updated: 08 Apr 2020, 10:15 PM IST
I would rather replace a couple of funds that are in your portfolio than add to the overall set and increase the number of funds
My wife and I invest ₹36,000 each month via systematic investment plans (SIPs). We have opted for direct plans. My wife has SIPs of ₹3,000 in Axis Blue chip Fund; ₹2,000 each in Axis Tax Saver Fund, ICICI Equity & Debt Fund, Kotak Corporate Bond Fund and Mirae Large-cap Fund; and ₹1,000 each in Franklin India Equity Fund, ICICI Bluechip Fund and Tata PE fund. I have an SIP of ₹7,000 in Axis Bluechip Fund; ₹3,000 each in Franklin India Bluechip Fund, Invesco Contra Fund and Kotak Standard Multi-cap Fund; and ₹2,000 each in Axis Banking and PSU Fund, Franklin India Pension Plan and HDFC Hybrid Equity Fund. I am planning to invest ₹1,000 each in Axis Small Cap Fund and HDFC Small Cap Fund. We are planning to start a family soon. Our investment tenure is 15-20 years. Our goals are wealth generation and retirement. Are we on the right track?
For a 15-20-year time frame, which is adequately long term, your portfolios are appropriately aggressive with almost all-equity allocations. However, there are a total of 16 schemes in your portfolios at present and you are planning to add two more mutual funds. The funds that you are looking to add are good and will add a small-cap allocation to your portfolios, which is currently missing.
However, I would rather replace a couple of funds that are in your portfolio than add to the overall set and increase the number of funds.
Given that you already have a debt fund in each portfolio, as well as a couple of diversified funds, I do not see the need for adding hybrid funds in either of the portfolios. You can replace those funds and add the ₹2,000 allocations to the small-cap funds you are planning to add, taking the small-cap fund allocations to ₹3,000 each.
Srikanth Meenakshi is co-founder, PrimeInvestor.in. Send in your queries and views at firstname.lastname@example.org