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Long term equity investments

Continue investing regularly in equity funds to build a meaningful corpus...

I invested in six funds 13 months ago. These include Axis Focused 25- G, HDFC Balanced Fund- G, SBI Emerging Business Fund- G, UTI-Opportunities Fund- G, Reliance Regular Savings Balanced- G and Mirae Asset India Opportunities Regular Fund - G.

Some say these are too many funds, some say re-work the portfolio now that a year is over and some say fund investments should not be touched for at least 5 to 10 years. What should I do?
-Sidharth Pinto

We don't see a reason for you to exit any of these funds. Equity investments are meant for long term. If you want to build a meaningful corpus you should continue investing regularly in these funds.

Your portfolio is adequately diversified. Currently, 88 per cent of your portfolio is in equity while the rest is in debt and cash. The exposure to large-cap stocks is 56 per cent while 28 per cent is in mid-caps and 14 per cent in small-caps. In all, you are invested in 164 stocks. The top three sectors- Financials, Technology and Energy together account for 47 per cent of your assets.

All funds that you have invested in are well rated funds except Axis Focused 25, which is a new fund. This fund has done well in one year of its existence. It delivered returns at 17 per cent against the category average of 11 per cent. The two hybrid funds- HDFC Balanced and Reliance Regular Savings Balanced have not done well recently but hold a good long-term track record.

Investing through SIP gives you the benefit of rupee cost averaging. If the market goes down after you invest, you will get more units at lesser price and hence benefit when market goes up. Of course, it is advisable to review the portfolio annually but make changes only if you see a fund going down in Value Research ratings.

Apart from this, you have chosen six funds from different fund houses and diversified the risk across AMCs too, which is a good thing to do. You have six experts managing your portfolio for a weighted average fee of 1.24 per cent, assuming you have invested same amount in each fund.



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