VR Logo

Way Too Much

A portfolio comprising 10 funds does not offer the right kind of diversification that is required…

I have SIP investments in BSL Midcap Plan-A, HDFC Top 200, HDFC Equity, Magnum Equity, Magnum Taxgain, Reliance Diversified Power Sector Retail and Reliance Small Cap. I also have lump sum investments in Reliance Vision, ICICI Discovery and UTI Wealth Builder. Please advice if this portfolio is correct or if needs modification? — Suneel Khatri

Scheme  Category  Rating  Type of investment
BSL Mid Cap Mid & Small Cap *** SIP
HDFC Equity Multi Cap ***** SIP
HDFC Top 200 Large & Mid Cap ***** SIP
ICICI Pru Discovery Mid & Small Cap **** Lumpsum
Magnum Equity Large & Mid Cap *** SIP
Magnum Taxgain Tax Planning *** SIP
Reliance DivPowSec Others Not Rated SIP
Reliance Small Cap Mid & Small Cap Not Rated SIP
Reliance Vision Large & Mid Cap *** Lumpsum
UTI Wealth Builder Large & Mid Cap Not Rated Lumpsum
Rating as on July, 2011

You have a huge portfolio of 10 funds, which is way too much. Moreover, you have two schemes funds from HDFC Mutual Fund, two from SBI Mutual Fund and three from Reliance Mutual Fund.
Since we do not know the exact amounts into each fund it is difficult to make an accurate judgement. Ideally, you should look at investing 70-80 per cent in core funds and the remaining in satellite funds. The core holdings must be ‘Equity: Large Cap’ or ‘Equity: Large & Mid Cap’ funds. The rest can be the mid-cap holdings and sector funds. Why have you invested in Reliance Diversified Power Sector Retail? Do you believe in the theme? If not, stop your systematic investment plan (SIP) in that fund. Exit Reliance Small Cap.
Invest regularly through SIPs instead of lump sum investments.

Post Your Query