Too many funds in your portfolio will defeat the purpose of diversification2 min read . Updated: 24 Jun 2020, 09:45 PM IST
While the funds you have chosen are quality funds, a couple of them have been slipping or there are better alternatives around
I am 31 years old and recently married. I am investing ₹2,000 in each of these funds for my child’s education and marriage via systematic investment plans (SIPs): Aditya Birla Sun Life Frontline Equity and L&T India Value (both since March 2016); Nippon India Small Cap (since June 2018); Kotak Standard Multicap (since July 2018); and HDFC Mid-Cap Opportunities (since November 2018). Please assess my portfolio and give your recommendations.
—J. Ashok Kumar
While the funds you have chosen are quality funds, a couple of them have been slipping or there are better alternatives around. Stop SIP in ABSL Frontline Equity and HDFC Mid-Cap Opportunities. Hold all investments made so far. Start SIPs of ₹2,000 each in Mirae Asset Large Cap and ABSL Corporate Bond. This will give you a 20% debt allocation, which will balance your portfolio. Continue SIPs in your other funds as you have been. If you increase your SIP amount, add to the existing funds (provided they continue to be good at that point) and don’t add to the number. Too many funds make your portfolio difficult to manage and does not help diversification.
I was investing via SIPs of ₹1,500 per month in each of the following funds since August 2015: SBI Blue Chip, Franklin India Smaller Companies, Motilal Oswal Multicap 35, Canara Robeco Emerging Equities and UTI MNC (all growth options); as well as ICICI Prudential Exports and Services. I had stopped investing in February 2019 due to financial constraints but would like to start again. I have not redeemed my money from these funds. Please advise in which funds should I continue, which ones should I stop and which ones should I buy? I can invest ₹12,000 per month and can increase SIPs by ₹1,000 every year. My time horizon is 15 years and I require a corpus of around ₹1.5 crore by 2035.
It is a unclear whether your monthly investment is ₹12,000 or ₹9,000 ( ₹1,500 in six funds). In either case, increasing SIPs by ₹1,000 every year will likely leave you short of your target. If your SIP is ₹12,000 try increasing by ₹1,000 every half year. If it is ₹9,000, you will have to make an annual increment of ₹3,000.
On your funds, avoid further investments in Franklin India Smaller Companies, ICICI Prudential Exports and Services and SBI Blue Chip. While these have been good funds, performance of late has been lagging. You should restart SIPs in UTI MNC with the amount of ₹1,500, Motilal Oswal Multicap 35 with ₹2,000 and Canara Robeco Emerging Equities with ₹2,500. Also, start a new SIP of ₹3,000 in Kotak Standard Multicap and ₹2,500 in ABSL Corporate Bond.
Srikanth Meenakshi is co-founder, PrimeInvestor.in. Queries and views at email@example.com