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Plan And Focus

Plan your portfolio with a focus on achieving goals to make your investments perform better…

I have SIPs in HDFC Top 200, HDFC Equity, DSPBR Top 100, Sundaram Select Midcap, IDFC Premier Equity, DSPRB Micro Cap and Fidelity Equity. I have surplus Rs 5,000 to invest, should I invest in a sector fund or increase my investments in the existing funds?
Regina Borges

You have selected good funds to build your mutual fund portfolio. However, it lacks in planning and focus. For instance, having seven funds will not provide you with the much needed diversity as it would if you have the right category of funds. You have three mid- and small-cap funds in your portfolio and two large- and mid-cap funds resulting in overlaps. We suggest you build a portfolio that is based on a core and satellite approach. This approach will provide the necessary stability and growth for long-term wealth creation. Ideally, you should look at investing 70-80 per cent in core funds and the remaining in satellite funds.

You can have 3-4 funds as core holdings comprising large-cap and large- and mid-cap funds, with the satellite component with sector funds and multi-cap funds to achieve long-term wealth appreciation. This way, the investments have the ability to absorb shocks as well as have the potential to earn higher returns over various market cycles. As for investment in sector fund; do not look for an allocation above five per cent of your portfolio.

Scheme Name  Category  Rating  3-yr ret (%)  5-yr ret (%)
DSPBR Micro Cap Reg Mid & Small Cap **** 10.86  -
DSPBR Top 100 Equity Reg Large Cap ***** 8.09 13.52
Fidelity Equity Large & Mid Cap **** 9.86 12.98
HDFC Equity Multi Cap ***** 15.34 15.45
HDFC Top 200 Large & Mid Cap ***** 12.74 15.23
IDFC Premier Equity Mid & Small Cap ***** 13.25 18.86
Sundaram Select Midcap Reg Mid & Small Cap **** 9.98 11.11
Returns as on May 04, 2011,Rating as on 30th April 2011

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