Investing For The Long-term

In January 2011 I started 4 SIPs for Rs 5,000 a month for the next 10 yrs. Please comment on this portfolio and suggest on more fund o invest Rs 5,000 monthly SIP
- Prashant Magdum

Schemes    Category    Rating    3-yrs ret (%)    5-yrs ret (%) Franklin India Bluechip   Large Cap   *****   12.4   14.32 HDFC Top 200   Large & Mid Cap   *****   16.09   17.4 IDFC Premier Equity   Mid & Small Cap   ****   15.96   20.61 HDFC Equity   Multi Cap   *****   18.36   17.09 Returns as on March 25, 2011 Ratings as on February 28, 2011

You have made a god selection of funds across categories that offer you the much desired diversity in style and number of funds. By adopting in a core and satellite approach, you can benefit from the power of compounding that SIP investments offer over the long-term and also gain from the diversity and balance that the portfolio gets from such an approach. This way you will get both the stability and growth for long-term wealth creation. Ideally, you should look at investing 70-80 per cent in core funds such as large- and large- and mid-cap funds and the remaining in satellite funds.

Currently you have a 50-50 allocation; you should consider investing the balance Rs 5,000 that you plan to invest in another large-cap fund such as DSPBR Top 100 Equity. And do make it a point to review and evaluate the performance of your fund holdings at least once a year to check its progress and make any changes to the holdings if necessary.

This article was originally published on March 28, 2011.