My portfolio is made up of HDFC Top 200, HDFC Balanced, DSP BlackRock Top 100, Reliance Equity Opportunities, Birla Sun Life Frontline Equity and IDBI Top 100. Should I continue with these funds or do I need to make any changes?
-Mukesh
You've chosen reasonably good funds, and they're good enough in terms of the count as well. A portfolio of 5-6 equity funds would provide adequate diversification and would be easy to manage. However, you shouldn't be having a fund like IDBI Top 100, which is relatively new and has a constrained portfolio. This fund will invest in only large-cap stocks, but it doesn't have a proven track record as yet. If you want a large-cap fund, there are superior options in its category. If you're a conservative investor, then a couple of balanced funds would be ideal for you. Balanced funds enjoy the tax treatment of equity funds, but don't fall as much in a bear phase. But if you're fine with some amount of volatility, then continue with your investments.
This article was originally published on April 24, 2014.
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