All equity funds | Value Research Investments in equity should be held for at least 10 years for optimum gains...
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All equity funds

Investments in equity should be held for at least 10 years for optimum gains...

I am investing Rs 23,000 monthly through SIP in the growth option of equity funds. My portfolio consists of: ICICI Pru Focused BlueChip Equity Fund- Rs 5,000, DSPBR Top 100 Equity Fund- Rs 5,000, IDFC Premier Equity Fund- A- Rs 5,000, HDFC Balanced Fund- Rs 5,000 and Quantum Gold Saving Fund- Rs 3,000. Is my portfolio fine or should I add or remove any funds? If I have to make an additional investment of Rs 10,000 per month, which new or existing fund should I choose?
-Nimesh

You have chosen good equity funds -- well-diversified funds with track-record of superior performance. These funds also enjoy top rating from Value Research. However, we are not so sure about your allocation to the gold fund. Gold as a commodity did very well over the past 8-9 years so did any investment in a gold fund. But we are unsure of its long term value as the tide has turned for gold in recent times.

Hence, we would recommend that you move your investments from the gold fund into either an equity fund or a balanced fund. You can invest more in either of your existing holdings too.

Currently your portfolio has 56 per cent allocation to giant and large cap stocks which provide strong foundation and stability to a portfolio. They may not give double-digit returns like small-caps sometimes achieve, but they're also less likely to see the big downturns occasionally experienced by smaller companies.

Mid and small cap stocks have 28 and 11 per cent allocation in your portfolio, respectively. These stocks can outperform their large cap peers in bull phases of the market.

However, since all your investments are in equity funds, your investment horizon should be at least 10 years to see optimum gains. If you are close to the goal, consider transferring investments to safer debt instruments.




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