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Should I invest more in small and midcap mutual funds

I want some advice regarding my investments. I am investing 50k per month equally distributed in 5 mutual funds - 1. ICICI Pru Focussed Bluchip, 2. SBI Large Cap, 3. ABSL Equity, 4. ABSL Small and Midcap, 5. L&T Midcap Fund. I am a Govt. employee and I do not have any immediate need of money in next few years. I have tried to pick funds with long term proven returns. Please help me with my investments. Also, we generally say that if we have long investment period, then only we should invest in small or midcap funds. Now, if I say that I am ok with my money locked for next 10 years, why I should be investing 100% in small or midcap fund to maximize returns. What is the possible downside?

Apr 30, 2018 by Rajat Batra,   |   Mutual Fund

Please note that my reply below should be treated as suggestion only and not financial advice. If you are looking for financial advice, you must connect to a financial advisor in your city.

I find that you have selected good funds from large cap, mid cap and diversified equity fund category which are suitable for meeting your long term investment requirement. I think, you should continue with these funds while reviewing your mutual fund portfolio performance once every year.

With Rs 50,000 monthly SIP for next 10 years, you can create a corpus of Rs 1.16 Crores against your investment of Rs 60 Lakhs (based on 12% annual return assumptions) over 10 years. Please check this tool https://www.advisorkhoj.com/tools-and-calculators...

With regards to your observation that mid cap funds can give you the best return in the long run, you are absolutely right! However, investing in mid cap funds also mean that you are also taking the 'highest' risk. Therefore, if you are okay with taking high risk, then you may add more midcap funds in your portfolio and reduce exposure to large cap equity funds.

To select top mid cap mutual funds, do refer this list https://www.advisorkhoj.com/mutual-funds-research...

Hope the above is helpful. Wishing you long term investing success :)

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