I have been investing in 9 funds – HDFC Equity (34%), HDFC Top 200 (15%), IDFC Premier Equity (10%), Reliance Diversified Power Sector (8%), Reliance Growth (7%), Birla Sun Life Frontline Equity (6%), Sundaram Select Midcap (8%), DSP BlackRock Equity (4%) and Birla Sun Life Midcap (4%). My allocation of large-caps is about 21 per cent, to diversified equity is 38 per cent, to mid-caps is 29 per cent and to specific sectors is 8 per cent. These are all lump sum investments made at different points in time after 2004. What should be my further strategy?
-Jitendra
While you have chosen good funds, they require constant monitoring, which may not be an easy thing to do when you’ve a portfolio of 9 funds. The underlined allocation of your portfolio to different market caps and sectors might be difficult to track, but you shouldn’t be worrying about that. The only thing you should be concerned about is controlling your portfolio. You should consider reducing your holdings. While you have a good collection, there is a possibility of overlap in your portfolio. For example, HDFC Equity and HDFC Top 200, which account for nearly 50 per cent of your portfolio, belong to same fund house and have a similar investment style. Both funds are good individually, but together they don’t add value to your portfolio. Hence, you should tweak your portfolio over time, and resist the temptation of buying more funds. Apart from that, invest regularly and make sure the funds you hold have the same variables for which you chose them.
This article was originally published on May 09, 2012.
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