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Consolidate Holdings

Consolidate your mutual fund portfolio and bring down your holdings to 5-6, instead of the current eight…

I have started monthly SIP investments for Rs 3,000 I HDFC Mid Cap Opportunities, ICICI Prudential Focused Bluechip Equity, IDFC Premier Equity, Quantum Long Term Equity, Reliance Equity Opportunities, UTI Opportunities and Magnum Emerging Business. I also have Rs 1,000 investment in Reliance Quant Plus. Is this a good portfolio to invest in for the next 15-20 years?
- Chirag Shah

Fund Scheme  Category  Rating  3-yrs ret(%)  5-yrs ret (%)
HDFC Mid Cap Opportunities Mid & Small Cap **** 32.84 NA
ICICI Prudential Focused Bluechip Equity Large Cap ***** 29.11 NA
IDFC Premier Equity Mid & Small Cap ***** 35.25 23.03
Magnum Emerging Business Mid & Small Cap **** 39.08 9.8
Quantum Long Term Equity Multi Cap ***** 30.63 12.84
Reliance Equity Opportunities Mid & Small Cap **** 33.84 11.63
Reliance Quant Plus Large Cap **** 22.22 NA
UTI Opportunities Large & Mid Cap ***** 30.33 14.28
Return as on November 4, 2011, Rating as on October, 2011

Your portfolio of eight funds is made of highly rated funds with a proven track record and performance history. However, you should consolidate your holdings and bring it down to 5-6 to avoid investments duplications. For instance, instead of two large-cap funds, you can hold one by exiting Reliance Quant fund and increase allocation to ICICI Prudential Focused Bluechip Equity. Likewise you should consider limiting mid- and small-cap fund holdings to at best two instead of four and increase your allocation in them as well the multi cap fund to retain portfolio diversification. Remember, mutual fund investments are dynamic and a fund that is highly rated and performing today need not do so forever, which is the reason why insist you regularly track the performance of funds that you invest in and assess its progress at least once a year.

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