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Important to Diversify the Portfolio

Lower exposure to a mid- & small-cap fund and diversify the portfolio to perform better....

I invest in ING Dividend Yield through a daily SIP of Rs500. I plan to invest for the long term. Is my approach correct?
- V Srinivasa Rao

A systematic investment plan (SIP) is the ideal way to invest in an equity fund. While the most common method of investing is a monthly SIP, a daily SIP is designed in such a way that one avoids market volatility as much as possible. However, we are surprised at the steep amount that you invest in this fund. You say that your daily SIP is Rs500, which will amount to Rs10,000/month (assuming 4 weeks of 5 working days each).

ING Dividend Yield falls in the 'Equity: Mid & Small Cap' category. The fund has performed well and invests at least 65 per cent of its assets in high dividend yield stocks. We do hope you are investing in other funds and have a diversified portfolio that includes large-cap funds as well. If not, please lower your exposure to this fund.

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