I am 27 year old and have started SIP investments of Rs 2,000 per month in seven mutual funds since last month. Is this the correct portfolio? Do i need to add or delete any funds?
- Vinit
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While you have selected seven good funds, it is not the way to start investing with overlaps in fund categories. Diversification is not achieved by numbers; you need diversification in style as well as category of funds with the right investment allocation that will achieve long-term wealth creation. You have age on your side and we are recommending an aggressive portfolio of six funds for you. These are funds that offer diversification in style and investments. Allocate 25 per cent of your investments to HDFC Equity and Fidelity Equity; 15 per cent in DSPBR Micro Cap and IDFC Premier Equity Plan and the balance 20 per cent equally in BSL Dynamic Bond and AIG World Gold.
This portfolio should help you in the long run with wealth creation. Do make sure to track the performance of these funds at least once a year and make any changes to them if necessary.
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This article was originally published on April 27, 2011.
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