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Choose Flexible Funds

For a long investment timeframe, buy funds that can invest across market caps & sectors…

I am a central government employee. I have been investing Rs 1,000 via SIPs in HDFC Top 200 and Franklin India Prima Plus since November 2009, and in ICICI Prudential Focused Bluechip since November 2011. Should I add a small- and mid-cap fund to my portfolio, or a balanced fund? I also want to know if I should invest in the NPS for my retirement.

If you're a passive investor investing for the long run, you should have funds that don’t require you to intervene a lot. You should invest in funds that are flexible enough to invest across market caps and sectors. From that standpoint, you should replace funds like HDFC Top 200 and ICICI Prudential Focused Bluechip with funds like HDFC Equity or UTI Equity. You don’t need to invest in balanced funds for a long timeframe.

Coming to your second query, the New Pension System (NPS) is an ideal vehicle to invest for your retirement. It is not expensive and will put you in a good position in 15-20 years. You should start investing in it.

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