Put Thought Into Your Portfolio | Value Research Think about the goals you want your investments to achieve, avoid haphazard investments…
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Put Thought Into Your Portfolio

Think about the goals you want your investments to achieve, avoid haphazard investments…

I am investing Rs 7,000 a month through SIPs in different mutual funds. I can invest additional Rs 3,000 a month. Kindly suggest new funds to add to my existing selection. I am also planning to start SIP 1000 in Reliance Gold Savings Fund
Lakshmi Prasad

Schemes  Category  Rating  3-yrs ret (%)  5-yrs ret (%)
HDFC Top 200 Large & Mid Cap ***** 15.63 17.22
ICICI Prudential Infrastructure Equity: Infrastructure **** 1.31 14.84
Reliance Regular Savings - Balanced Hybrid: Equity-oriented ***** 15.36 15.73
BSL Frontline Equity Plan Large & Mid Cap ***** 11.46 16.96
Magnum Contra Multi Cap *** 4.41 11.68
Magnum Tax Gain Tax Planning *** 3.63 10.31
Returns as on March 14, 2011 Ratings as on February 28, 2011

At 40, you are demonstrating the right temperament by investing regularly in mutual funds through SIPs. You have made a good start by selecting some good funds to build your fund portfolio. However, there seems to be some issue with a few funds that you have selected, where the thought seems to be missing in selecting them.

For instance, both the SBI funds are not the best performing funds in their category. You will be better in selecting Quantum Long Term Equity, a good performing multi cap fund instead of Magnum Contra. Likewise, you will be better with Fidelity Tax Advantage or HDFC Taxsaver instead.

There is a lesson for you from your current investments; you need to have a well-diversified and allocated portfolio of funds. We suggest, you go with a core and satellite approach, which will give your mutual fund portfolio the necessary stability and growth for long-term wealth creation. You should look at investing 70-80% in the core funds such as large, large- and mid-cap funds and even tax planning fund. With the satellite comprising sector, thematic funds and mid- and small cap funds. This way the core will take care of stability and the satellite helps your portfolio earn the necessary push to improve the performance of the overall portfolio. Increase your allocation to HDFC Top 200, BSL Frontline Equity and add a large cap fund such as DSPBR Top 100 Equity or IDFC Imperial Equity Plan A.

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