Stability Plus Growth

Adopt the core & satellite approach to investing to have a stable, growth-oriented portfolio…


I am 42 and am investing Rs 10,500 in five mutual funds for the next ten years. I want to increase my investment by Rs 4,000 which other fund should I start investing in?
- Ajay Gupta

Schemes  Category  Rating  3-yrs ret (%)  5-yrs ret (%)
Franklin India Bluechip Large Cap ***** 11.42 11.63
HDFC Equity Multi Cap ***** 17 15.09
IDFC Premier Equity Mid & Small Cap ***** 14.3 18.54
HDFC Top 200 Large & Mid Cap ***** 14.44 15
Kotak Gold  Gold Fund Not Rated NA NA
Returns as on May 9, 2011 Ratings as on April 30, 2011

You have selected good funds that have a proven track record and performance history to find way in most portfolios. In fact the portfolio that you falls can be dove-tailed into the core and satellite approach. This approach will provide the necessary stability and growth for long-term wealth creation. Ideally, you should look at investing 70-80 per cent in core funds and the remaining in satellite funds. You have 2 funds as core holdings comprising large-cap and large- and mid-cap funds, with the satellite component with multi-cap fund and mid- and small-cap fund, along with the gold fund.

What you need is to increase your allocation to Franklin India Bluechip and HDFC Top 200 with the additional Rs 4,000 that you have to spare every month. This will help your portfolio with the ability to absorb shocks as well as have the potential to earn higher returns over various market cycles. Remember, to continue investing and track the performance of your investments at least once a year for any change in the fund holdings.



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