75 per cent of my portfolio is invested in HDFC Equity, UTI Equity and IDFC Premier Equity. The other 25 per cent is invested in Reliance Growth, Reliance Diversified Power, Sundaram Select Midcap and DSP BlackRock Equity. I want to know what to do with this latter 25 per cent of my portfolio. Should I exit these 4 funds and invest the money in my other funds? Or should I add a new fund to my portfolio?
Both of the approaches put down by you make sense. However, 3 of the 4 funds that make up 25 per cent of your portfolio are good funds. These funds will see an improvement in performance when the markets turnaround. One thing that you can do is assume greater risk with this 25 per cent of your portfolio by investing the amount in a mid- & small-cap fund like DSP BlackRock Microcap or SBI Magnum Emerging Businesses. While these funds are riskier propositions, they can give you better returns in a rising market.