I am new to mutual fund investing. On 1st March this year, I invested Rs. 10.3 lakh, splitting them equally between Birla Dividend Yield plus and Sundaram Growth. My choices were based on the funds' past performance and current NAV. Were these investments wise?
Shibu (Abu Dhabi)
There's nothing wrong with your choices. Of the two, Sundaram Growth has been in existence for longer (since 1997), and investors' experience with the fund has been fruitful. It has a consistent track record of good returns since it is launched. Given its diversified nature, protecting returns is as important as generating them and that seems to be the philosophy for this fund.
Birla Dividend Yield Plus, however, was launched in February 2003 and is thus a fairly new entrant in a diversified fund category. The fund intends to invest in companies having high dividend yields with mid-caps forming substantial part of its portfolio. Though it has performed really well over the past one year, this period has not been one where it was particularly difficult to do well.
Overall, your portfolio is well-diversified. An analysis done on the Value Research Online Portfolio Tracker (https://www.valueresearchonline.com/port/) shows that no single pick has more than 7 per cent holding of the total assets and the portfolio is not too concentrated in any particular sector either. Both the funds are also well diversified in terms of sectoral composition. So, a loss in may well get compensated by the other.
There are other funds in this category which you can have a look at, in case you want a switch or increase your portfolio. Some of the options could be Franklin India Prima Plus and Reliance Growth Fund from amongst the top performing funds in this category. But do remember that past performance is not a guarantee of future performance.