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Core & Satellite

When you are investing to build a corpus, the core & satellite approach can work well for you. See how


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I am 31 and am investing Rs 1,000 every month through SIPs in Reliance Regular Savings Equity, HDFC Top 200 and Reliance Equity Opportunities. I also have Rs 2,000 SIP in Reliance Growth. I further plan to invest additional Rs 2,000 every month to build Rs 20 lakh savings in 15 years and Rs 20 lakh after 25 years for my child's marriage. Please guide me on my choice of funds.
-Bhavin Karvat

Current Portfolio
Scheme Name  Category  Rating  SIP (Rs)
HDFC Top 200 EQ-Large & Mid Cap ***** 1,000
Reliance Equity Opportunities EQ-Mid & Small Cap **** 1,000
Reliance Growth EQ-Mid & Small Cap *** 2,000
Reliance Reg Savings Equity EQ-Multicap **** 1,000
Data as on January 31, 2012

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You should get what you want by continuing with your systematic investment plans (SIPs) in various equity funds. Currently you are investing Rs 5,000/month and plan to invest an additional Rs 2,000/month.

Ideally, you should look at investing 70 per cent in core funds and the remaining in satellite funds. Your core funds must be from the 'Equity: Large cap' and 'Equity: Large & Mid Cap' categories. The satellite component can comprise of mid-cap, sector and multi-cap funds.

Frankly, you have too many schemes from Reliance Mutual Fund. You also have two funds that fall in the 'Equity: Mid & Small Cap' category. Consider a large-cap fund like Franklin India Bluechip. Fidelity Equity is another one you can consider from the 'Equity: Large & Mid Cap' category. You can stop your SIP in Reliance Growth.



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