VR Logo

Start Safe

A multi-cap fund is not the ideal first investment because it is riskier than a diversified fund…

I want to invest Rs 60,000 to Rs 1 lakh annually in mutual funds. Currently I am invested in HDFC Core & Satellite. Could you suggest a way to build my portfolio? I am also considering investing in HDFC Tax Saver, ICICI Prudential Discovery Fund and Magnum FMCG Fund. How much should I invest in an ELSS?-Vikas Parte

Fund Scheme  Category  Rating  3-yrs ret (%)  5- yrs ret (%)
HDFC Core & Satellite Multi Cap **** 18.69 14.24
HDFC Taxsaver Tax Planning **** 19.35 15.48
ICICI Prudential Discovery Mid & Small Cap **** 25.86 17.42
Magnum FMCG Equity: FMCG Not Rated 32.29 19.49
Return as on July 28, 2011, Rating as on June, 2011

When investing in ELSS or tax planning funds you can claim for deductions under Section 80C on investments with an upper limit of Rs 1 lakh each financial year. You can consider utilising the entire sum as it is well within the amount that you plan to invest.
If HDFC Core & Satellite was your first investment, it was not the best of funds to start investing. Being a multi cap fund it is risky compared to the broad diversified equity funds. The way to building a portfolio is to start with an investment goal and time horizon for investments. Starting with broad diversified funds such as a large-cap category or a large- and mid-cap category of funds is a good idea before getting into other categories of funds to achieve the necessary diversity that a portfolio should have.

Post Your Query