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Diversify To Succeed

To build a sound investment portfolio, you need to diversify across style as well as numbers…

I am 37 and investing in HDFC Top 200, Canara Robeco Infrastructure, Canara Robeco Emerging Equity for my retirement and can invest for another 15 years. Does this make a good portfolio? Suggest changes if necessary.
- C V Nagaraj

You have selected funds across categories that do not offer adequate diversification. Moreover, Canara Robeco Infrastructure, an infrastructure fund is a thematic fund, wherein the infrastructure theme is not playing out as desired and Canara Robeco Emerging Equity, a mid- and small-cap fund is not the best performing fund in its category.

With a 15-year investment time frame, you will be better of investing a portfolio that has 70 per cent equity exposure and is well diversified in both style and number of funds. We suggest a portfolio of five funds with equal allocation to all the funds with the Rs 10,000 that you are investing to build a good retirement corpus. Do track the performance of the funds that you invest in to check its progress towards your desired financial goal.

Suggested Portfolio
Schemes  Category  Rating  3-yrs ret(%)  5-yrs ret (%)
BNP Paribas Bond Reg Debt: Income ***** NA NA
Fidelity Equity Large & Mid Cap **** 10.16 13.52
HDFC Top 200 Large & Mid Cap ***** 13.30 16.31
ICICI Prudential Dynamic Large & Mid Cap **** 10.23 13.53
Reliance Equity Opportunities Multi Cap **** 14.61 13.13
Returns as on May 16, 2011 Ratings as on April 30, 2011

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