I am investing Rs 10,000 each in four mutual funds via SIPs, which are HDFC Equity, HDFC Prudence, UTI Opportunities and UTI Dividend Yield. Apart from this, I have no other investment in other asset classes like realty or gold. My investment horizon is of 10 years, and I have an investible surplus of Rs 30,000 per month. Where should I invest that?
-Rajiv
Two of your funds – UTI Opportunities and UTI Dividend Yield – don’t complement each other. HDFC Prudence is a good balanced that gives you growth as well as stability. And HDFC Equity is on the whole very similar to the equity allocation of HDFC Prudence. When you invest in mutual funds, diversification should be one of your prime goals. Here, you don’t get adequate diversification even though you’ve invested in different types of funds. We would suggest that for an investment horizon of 10 years, you can add two more well-performing funds to your portfolio. You can choose from DSP BlackRock Equity, Birla Sun Life Frontline Equity or ICICI Prudential Focused Bluechip.
This article was originally published on March 09, 2012.
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