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Risky Prospects

A portfolio of funds that has a major portion invested in sector & mid- and small-cap funds is risky in nature….

I am investing Rs 4,000 each in Reliance Banking, HDFC Top 200, Franklin Pharma and DSPBR Micro Cap fund with a long term perspective build a corpus for early retirement. I have planned to invest for at least 10 to 12 years in these funds. Kindly suggest if this portfolio is good or needs changes?
- Venkat Raghu

Fund Scheme  Category  Rating  3-year return (%)  5-year return (%)
DSPBR Micro Cap Mid & Small Cap **** 17.18 NA
Franklin Pharma Equity: Pharma Not Rated 27.4 17.44
HDFC Top 200 Large & Mid Cap ***** 12.72 14.65
Reliance Banking Equity: Banking Not Rated 18.99 23.07
Return as on September 02, 2011, Rating as on August, 2011

With 75 per cent of your investment in sector funds and mid- and small-cap funds, the portfolio is risky. If you can take risks, you can continue investing in this portfolio, but do remember that sector funds are known to ride cycles depending on the economic and market conditions, which mean their fortunes, change with time. When investing for the long-term like 10-12 years, you should review the performance of the funds that you have invested in regularly to ascertain its progress towards early retirement that you have planned.



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