VR Logo

How can I reduce the schemes in my portfolio?

Dhirendra Kumar gives broad guidelines to reduce the schemes in your portfolio

I have been investing in mutual funds for the past 12 years and my existing schemes are--SBI Bluechip, ICICI Pru Focused Bluechip Equity, L&T Equity Fund, Kotak Select Focus, ICICI Pru Dynamic Fund and ICICI Pru Exports and Other Services. How can I reduce the number of schemes to two?
- Naseer

All the funds chosen by you are good ones. I will give you broad guidelines to decide on which funds to retain. On an average, if there are 30 to 40 stocks in each fund, and if there is a duplication in every fund, the common shares comprising your underlying portfolio must be around 60. SBI Bluechip and ICICI Pru Focused Bluechip, both have around 40 to 45 stocks. A good part of the Dynamic Equity's portfolio would also be there in a bluechip fund. But because you are investing in 7 to 8 different funds, the overall portfolio would have around 200 to 250 shares with duplication. And all these funds are different, some are multi-cap and some are large-cap which is good because if one underperforms the other may do better. But this objective can be achieved in a more simplified way by investing in two multi-cap funds. L&T Equity and ICICI Dynamic are these kind of funds to some extent.

You should not invest in a fund which invests only in a particular sector or segment like export services or small-cap. In such cases, you are paying the full management fee to the fund manager but taking limited services. So, it is better to invest in a fund where you can utilise his services completely.

Post Your Query