I have been investing in SIPs of Reliance Banking Retail, HDFC Top 200, ICICI Prudential Discovery, Reliance Growth, Franklin India Bluechip and Reliance Pharma since 2010. Most of these investments have a negative return. I am 33 and have an investment time frame of 7-10 years. Please suggest the best way towards healthy and sustainable growth. — Saurav Chakrabarty
You are right, most of the funds you have invested in currently have a negative return. However, that is because the market has been extremely volatile and you are only looking at short-term returns. Take a longer perspective and you will see that the returns are impressive. You say that you have invested with a 7-10 year perspective. If that be the case, do not let such short-term movements upset you.
Having said that, let us talk about your portfolio. Even though you have invested in six funds, it is not an “ideal” portfolio. You have three schemes from the same fund house, two sector schemes and two funds which predominantly invest in mid- and small-caps. This gives your portfolio a risky tilt. Since we are not aware as to how much is being invested in each fund, we cannot get more specific.
Here are some suggestions.
Limit the exposure of both your sector funds (Reliance Pharma, Reliance Banking) to not more than 10 per cent of your portfolio.
Limit your exposure to mid- and small-cap funds (Reliance Growth, ICICI Prudential Discovery) to 20 per cent of your portfolio.
The balance 70 per cent of your portfolio can be cornered by Franklin India Bluechip and HDFC Top 200, which will form the core portfolio.