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Can you Advice regarding mutual funds

I am really impressed with the in-depth analysis of mutual funds as available in your website & feel it is the perfect platform which I have been looking for. I am working in a PSU & I describe myself as an aggressive investor. I have been investing in mutual funds since 5 years & have added funds in my portfolio. I started investing with SIP of Rs. 15000 per month & gradually increased it to Rs. 24000 per month. My investment horizon( about 10+ years) is building a portfolio which would help me to buy a house & fund my child's education. I have invested in large caps, diversified funds, small & mid caps( which form the major chunk).The investment portfolio is giving me annualized returns of 27%. However, I feel there is scope of improvement as I want to stream line it now based on my goals & time horizon. Currently my SIPs are, HDFC Mid Cap - Rs. 5000 - Small Cap Fund, IDFC Equity - Rs. 5000 - Small/Mid Cap Fund, Mirae Blue Chip Emerging Fund - Rs. 6000 - Small/Mid Cap, Kotak Select Focus - Rs.2000 - Large Cap, SBI Blue Chip -Rs. 2000 - Large Cap Fund, Mirae Aseet Opportunities Fund - Rs. 1000 - Diversified Fund, ICICI Pru Discovery Fund - Rs. 3000 - Diversified Fund. Also, I have bought Sectorial Funds like Invesco Banking Fund, Invesco Contra Fund, HDFC Capital Builder which were bought as lump sum amount. I had IDBI diversified fund in my portfolio but have stopped it & I am withdrawing it. Please advise as what things/improvements are needed in my portfolio: a) To which fund lump sum amount is to be deposited, b) any SIP which needs to be stopped? I am looking forward for your advise & would like to associate with your company?

Mar 14, 2017 by Mridul Choudhury,   |   Mutual Fund

Thanks for the kind words about Advisorkhoj. Glad that you liked our website and found it useful.

1. Your fund selection is quite okay according to your risk profile, excepting selection of IDFC Premier Equity Fund. It would be a good idea to come out of this fund and invest / allocate this contribution between SBI Blue Chip and Mirae Asset Opportunities Fund.

2. You are doing the right thing by redeeming IDBI diversified equity fund.

3. With regards to your investment in sectoral or thematic funds, you have to be little careful as you need to monitor their performance and check how the sector or the theme is playing out. Once you make good gains, you should come out of these funds and increase exposure in diversified equity funds. This suggestion is being given as your investment are for achieving your long term goals like, children education and buying a property. You need to be cautious as even though sectoral/ thematic funds can give higher return than other categories, but chances are also that the theme/ sector may not play out for a long period and you might not get the desired corpus when you need the same urgently for meeting your goal expenses.

4. Please also note that for achieving long term goals, diversified equity funds are the best bet, as they invest across sectors/ companies and market caps. Therefore, for you future investments – both for SIP and Lump sum – you should go with diversified equity funds.

5. With 27% annualised return, your MF portfolio is doing quite well, therefore, you should continue with the same after making the change (of course, if you find our suggestion wise). However, you should always review your mutual fund portfolio at least once every year to check if they are aligned with your goals.

6. The another prudent idea could be to know the future value of each of your goals and the date on which you want to have these amounts. And then you should check if your current investments (SIPs and lump sum) are sufficient enough to reach that goal or you need to invest more.

Let me know how else we can help.

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