Mutual Funds

Review your portfolio periodically

K. VENKATASUBRAMANIAN | Updated on March 10, 2018

Sector funds are risky and require appropriate timing in entry and exits.

I am 42 years old and have been investing Rs 20,000 a month for the last one year in the following mutual funds: Rs 2,000 each in HDFC Equity, HDFC Midcap Opportunities, Fidelity Equity, DSPBR Balanced, Quantum Long-term Equity, ICICI Pru Discovery and Birla Sun Life Frontline Equity.

In HDFC Prudence, I invest Rs 4000, while Rs 1000 each is parked in Reliance Banking and Reliance Pharma funds. I wish to earn Rs 1crore in 12 years. Will these funds help me reach that goal?Dayanand

You can accumulate Rs 1 crore in 12 years if you invest Rs 20,000 every month, and it earns 18 per cent per annum during this period. The returns are achievable if you are willing to take slightly high risks. Step up your Systematic Investment Plans as and when your disposable income increases Given the timeframe of investment, you needn't hold too many balanced funds.So despite its good performance record, exit DSPBR Balanced. But you can retain HDFC Prudence as it has delivered returns that compare very favourably with top diversified equity funds.

Sector funds are risky and would require monitoring and appropriate timing in entry and exits. Please note Reliance Pharma and Reliance Banking have been exceptional performers, as the underlying themes have had a favourable run during the past 2-3 years.

Invest Rs 5,000 each in HDFC Top 200 and Quantum Long-term Equity, which would give you large and multi-cap exposure respectively. You can exit Fidelity Equity, a steady performer, as Quantum Long-term Equity follows a similar mandate, and has delivered superior returns. Similarly, exit Birla Sun Life Frontline Equity (although a good performer) as HDFC Top 200 would serve your purpose. You can retain HDFC Mid-cap Opportunities and ICICI Pru Discovery, where you can invest Rs 3,000 each. Review your portfolio periodically to leave out underperformers and rebalance.


My age is 30 years, and I have accumulated Rs 3,20,000 through Systematic Investment Plans in various mutual funds since the month of May 2009. My targets are buying a car in 2 years (Rs 3 lakh), and getting married in 1 year. I invest Rs 14,000 per month in mutual funds. In DSPBR Top 100 Fund, Mirae Asset India Opportunities Fund, HDFC Prudence Fund and Fidelity Equity Fund, I invest Rs 2000 each. I park Rs 1000 each in Templeton India Income Opportunities Fund, Franklin India Prima Plus Fund, Templeton India Equity Income Fund, Reliance Equity Opportunities Fund. Additionally, I invest Rs 1500 in Mirae Asset Emerging Bluechip Fund and Rs 500 in HDFC Growth Fund. Please advice and suggest changes if any to my existing portfolio. — Abhijit Sen

Investments in mutual funds are meant for longer terms of 5-7 years. You can use part of the mutual fund proceeds to buy a car and take a loan for the rest, provided your monthly cash flow allows it. Use the rest for your marriage.

Coming to your portfolio, rebalance it as follows, as there are too many funds with overlap in mandate: Invest Rs 3,000 each in DSPBR Top 100, Reliance Equity Opportunities and HDFC Prudence. Continue the Systematic Investment Plan in Mirae India Asset Opportunities. Given that there are sufficient multi-cap funds, park the balance Rs 3,000 in a large-cap fund such as Franklin India Bluechip.

Published on March 10, 2012

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