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The perfect allocation

Broad rules of investing require that you should diversify and not be tilted towards one particular fund or investment style.

I invest in HDFC Equity, UTI Equity and IDFC Premier Equity fund. Due to the dismal performance of HDFC Equity, I want to invest in ICICI Prudential Dynamic fund too. Should I keep investing in HDFC Equity or move out completely? What should my allocation be?
-Jeetendra

There is no thumb rule for the precise allocation. The broad guidelines of investing in funds require that you should diversify, you should not be tilted towards one particular fund or investment style.

If you want to continue investing for many years, which any equity investment should be, the four funds you've chosen are good. HDFC Equity is not doing well but it can do well, it has a long history and it has not done well only in the recent past.

You should diversify across skills as well. The four funds you've chosen get you the finest fund management skills. One of them is out of favour right now, but don't get unnerved. Keep it simple, have an equal allocation and rebalance it annually.



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