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Diversifying Your Portfolio

Add a mid-cap fund to your predominantly large-cap portfolio to give it the required diversification…

I invested in Reliance Growth and HDFC Top 200 funds since last year through SIPs of Rs 5,000 each. I want to invest an additional Rs 10,000 every month in a mutual fund for the next five years. Should I continue in these two funds or look for other funds?Mahesh Wdhawani

Scheme  Category  Rating  Ret* 3-yrs
HDFC Top 200 Equity: Large & Mid ***** 17.72
Reliance Growth Equity: Mid & Small *** 11
*Annualised Return as on August 02, 2011, Return as on July, 2011

You have selected two good funds and should continue investing in these. Curently, you have around 62 per cent of your portfolio in large caps. That’s because despite Reliance Growth being a mid- and small-cap fund, it’s latest portfolio shows a slant towards large caps. We suggest you invest the additional Rs 10,000 in two funds. One of them can be a large-cap fund such as Franklin India Bluechip or DSPBR Top 100 Equity. The other can be a multi-cap fund such as Quantum Long Term Equity, DSPBR Equity or Morgan Stanley A.C.E
. These funds will compliment your exising holdings and will present you with a well diversified portfolio.

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