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Adding Character

Add character to your portfolio by adopting the core & satellite approach where a majority is invested in large caps…

I have 4 SIPs of Rs 5,000 each in HDFC Equity, UTI Dividend Yield, IDFC Premier Equity and Kotak Gold. I want to add Rs 15,000 in mutual funds every month; please suggest funds to invest in?
- Vikram Agarwal

Fund Scheme  Category  Rating  3-yrs ret (%)  5-yrs ret (%)
HDFC Equity Multi Cap ***** 32 12.6
UTI Dividend Yield Large & Mid Cap ***** 29.11 15.14
IDFC Premier Equity Mid & Small Cap ***** 37.67 22.62
Kotak Gold Gold Not Rated NA NA
Return as on November 01, 2011, Ranking as on October, 2011

You are investing in good funds and should continue investing in these. However, to get character to your portfolio you should adopt the core and satellite approach to build a diversified portfolio with up to 90 per cent allocation to core funds made of large-cap funds such as DSPBR Top 100 Equity or ICICI Prudential Focused Bluechip Equity besides UTI Dividend yield in which you are already investing. Likewise, you can increase the allocation to the existing mid- and small-cap fund and the multi cap fund in your portfolio to form the satellite component. The increase in investments also gives you the opportunity to restrict your investments in gold to 5-10 per cent of your investments which is recommended. Invest regularly and review the performance of the funds that you invest in to achieve your long-term financial goals.

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