Mutual Funds

Your Fund Portfolio

K. Venkatasubramanian | Updated on January 26, 2014

I am 33 and have been investing ₹ 1,000 every month through the SIP mode in each of the following funds over the past 18-24 months: Birla Sun Life Dividend Yield Plus, HDFC Top 200, ICICI Prudential Dynamic and Union KBC Asset Allocation.

My wife and I are expecting our first child in March/April 2014 and want to plan for his/her education. I can invest ₹3,000 per month. I plan to build a corpus of ₹20 lakh in17 years. Please also suggest funds and any changes that may be required.

-Rama Rao

Your choice of schemes reflects no specific strategy and may not fit your requirements.

You do not require an asset allocation fund as you can create a diversified portfolio yourself. This can be done by investing in equity mutual funds, debt products (FDs, RDs, PPF or NSC), gold and if possible, real estate.

Allocation to each of the above asset classes can be done in accordance with your risk appetite, goals and investment horizon, which can be modified as you grow older. Of course, not all asset allocation funds are bad, but such schemes must be backed by a strong record before you take the plunge.

As for your portfolio, exit Union KBC Asset Allocation. Stop further SIPs in HDFC Top 200 and keep a tab on its performance as it has been lagging peers the past couple of years.

Further investments in Birla Sun Life Dividend Yield Plus too can be stopped, as this mid-cap oriented fund has underperformed in recent times. Retain ICICI Pru Dynamic and invest ₹2,000 in it. The balance ₹2,000 can be parked in Axis Equity.

Coming to the second part of your query on saving for your child, if you invest ₹3,000 every month for the next 17 years and the returns are 12 per cent annually, you will be able to accumulate ₹20 lakh comfortably.

Given that the timeline is fairly long, you can take some risk in your portfolio. The other option would be to take a reasonably safe route, given that return expectations are not too ambitious.

Invest ₹2,000 in Birla Sun Life Frontline Equity and ₹1,000 in HDFC Children’s Gift Fund – Investment Plan. If you can take more risks, you can replace the gift fund with IDFC Premier Equity, a quality mid-cap fund.

Another approach would be to invest in two large-cap funds. This would mean investing ₹1,500 each in Birla Sun Life Frontline Equity and ICICI Pru Top 100.

Review the performance of the schemes in your portfolio once every year and take corrective action, if necessary.

I am 26 and plan to invest ₹3,000 per month through SIPs in mutual funds. I can take high risk on my investments and my time horizon is 10-20 years. Later on, I will increase my investment amount. I have selected five funds and want to choose two from the list, where I intend to invest ₹1,000 and ₹2,000, respectively. These are:

ICICI Pru Focused Bluechip, Reliance Equity Opportunities, Birla Sun Life Frontline Equity, IDFC Premier Equity and Quantum Long Term Equity. Please also suggest other schemes that may be suitable for me.


All the five funds you have chosen have proven track record and have delivered strong returns over the years. You have stated that you can take high risk on your investments. Also, given your long time horizon, you can look at a mid-cap oriented portfolio.

You can consider investing ₹2,000 in IDFC Premier Equity, a quality mid-cap fund. The balance ₹1,000 can be parked in Reliance Equity Opportunities, a proven multi-cap performer.

Over time, as your surplus increases and as you grow older, include large-cap funds in your portfolio. Also, look to invest in other avenues such as debt, gold and real estate.

I am 22 and want to invest ₹2,000 every month through the SIP route. My horizon is 15 years, over which I wish to accumulate ₹17 lakh. Please suggest schemes.

- Jyotirmoy Das

It would be quite challenging to accumulate ₹17 lakh in 15 years with a monthly investment of ₹2,000. To reach this target, you would need to invest ₹3,500 every month for 15 years, assuming annual returns of 12 per cent. However, this should not deter you from making a start. Take the plunge by investing ₹1,000 each in Quantum Long Term Equity and ICICI Pru Focused Bluechip. As your surplus increases, you can either increase allocations to these funds in the future after following their performance or buy more schemes.

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Published on January 26, 2014

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