I want to invest in HDFC Top 200, Sundaram S.M.I.L.E and Canara Robeco Equity Tax Saver for the next 3-4 years. 50 per cent of it should be in tax savers. Have I made the right selection?
The funds that you have chosen are good ones, but if you want half of your money in tax saving then you have restricted yourself to only Canara Robeco, as it is the only tax saving fund that you have mentioned. To get a tax saver advantage, you have to invest in a fund which is designated for it.
Apart from that, the profile of the other two funds which you have mentioned, HDFC Top 200 and Sundaram S.M.I.L.E are very different. The latter is a good fund, but invests in small- and mid-sized companies only. If the markets dip, this fund proves to be very disappointing. It managed to grow between the period of March to October. If the markets are climbing then the fund would ‘smile’ at you. You should ensure that in funds like these, not more than 20-30 per cent of your money is invested. As these three funds are good, invest half of your money in Canara Robeco Tax Saver Fund, 40 per cent in HDFC Top 200 and the rest in Sundaram S.M.I.L.E.