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Lack Of Focus

Without focus, your fund portfolio can get aggressive & become highly prone to risks…

I am investing Rs 2,000 each in Reliance Diversified Power Sector, Reliance Growth, HDFC Equity and HDFC Growth since July 2010. Recently I have added DSPBR World Gold Fund. I have additional Rs 4,000 a month to invest; which new fund can I invest in?
- Rajesh Sheth

Schemes  Category  Rating  3-yrs ret (%)  5-yrs ret (%)
DSPBR World Gold International Not Rated 5.91 NA
HDFC Equity Multi Cap ***** 20.46 20.92
HDFC Growth Multi Cap **** 13.57 20.69
Reliance Diversified Power Sector Retail Equity: Others Not Rated 5.48 24.43
Reliance Growth Mid & Small Cap **** 10.73 18.79
Returns as on June 10, 2011 Ratings as on May 31, 2011

Your portfolio of five funds lacks focus. You have invested in two multi cap funds, a mid- and small-cap fund, a thematic fund and a world gold fund. Without doubt, the fund selection is aggressive and makes your portfolio prone to risks, especially with the absence of core funds. Have a clear time frame with which you are investing to follow an investment objective like the core and satellite approach. Your current portfolio is more skewed to a satellite holding. You should consider the additional sum that you have to be invested in a large-cap fund to form the core holding; look for a fund such as Franklin India Bluechip or DSPBR Top 100 Equity. Both the funds are highly rated and have a proven track record and performance history to form good core holdings. Continue investing regularly in your current holdings and evaluate its performance from time to time.

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