Mutual Funds

Your Fund Portfolio

Parvatha Vardhini C | Updated on May 12, 2019 Published on May 12, 2019

I am 62 years old and retired. In September 2017, I had invested ₹1 lakh each in nine funds (in regular, growth plans): Aditya Birla Sun Life Frontline Equity, Invesco India Contra, Mirae Asset Hybrid Equity, DSP Equity Opportunities, Franklin India Smaller Companies, Kotak Equity Opportunities, Motilal Oswal Multicap 35, Principal Hybrid Equity and Reliance Equity Hybrid. Of these, just three have shown growth; the remaining six are in the red. Kindly evaluate my portfolio and advise a rejig.

Bala Ganesh

We are advising on your mutual fund portfolio assuming you have enough investments in safe debt instruments such as Senior Citizen Savings Scheme, Vaya Vandana Yojana and bank deposits, and are also comfortably placed for your regular monthly expenses.

Else, investments in mutual funds are not recommended for senior citizens, as it runs the risk of capital loss.

Since you invested less than two years ago, it is too early to judge the performance of your holdings.

Besides, while 2017 did see a bull run, the broader markets have been marked by volatility since then. Hence, this could have taken a toll on the performance of your portfolio.

You have invested 40 per cent of your portfolio in lower-risk aggressive hybrid (Mirae, Principal and Reliance Hybrid Equity) and pure large-cap (Aditya Birla Sun Life Frontline Equity) funds, and 60 per cent in moderate- to high-risk, large- and mid-cap (DSP Equity Opportunities, Kotak Equity Opportunities), multi-cap (Motilal Oswal Multicap 35), contra (Invesco India Contra) and small-cap (Franklin Smaller Companies) funds.

Although Mirae Hybrid Equity and Moltilal Oswal Multicap funds are relatively new, the other funds have a reasonably good track record over the long term.

Being a retiree, you need to judge if this 60 per cent allocation towards moderate- to high-risk categories suits your risk appetite.

If yes, you can continue to hold your investments and take a call later in case of prolonged under-performance to the benchmark and peers.

Else, you need to tweak your allocations more towards debt/hybrid schemes or index funds to bring down the risk quotient.

I’m a 30-year-old PSU employee with a wife and a new-born son. My ongoing SIP investments are thus: ₹2,000 in SBI Bluechip, ₹1,000 each in SBI Large & Midcap, Canara Robeco Emerging Equities and Aditya Birla Sun Life Equity Hybrid ’95, and ₹500 in UTI Mid Cap. I want to increase my investments by ₹2,500. My aim is long-term wealth creation, and I can take above-average risk in investing for at least 10 years. Please evaluate my present holdings and let me know the tweaks required.

Vysakh K

Since you are young and have a growing family, long-term investments in mutual funds will help you save towards goals such as children’s higher education, buying a house and your retirement.

Although a 10-year time-frame is comfortable for mutual fund investing, it is not clear whether you have any specific goal to be met 10 years down the line.

If not, you can continue saving in mutual funds for more than 10 years for goals such as the ones mentioned earlier. You can increase your SIPs as your investible surplus increases.

Coming to your investments, for the ₹8,000 you want to invest including the additional ₹2,500 a month, three funds will suffice. Invest ₹3,000 in SBI Bluechip, a good large-cap fund.

The remaining ₹5,000 can be equally split between Canara Robeco Emerging Equities and Kotak Standard Multicap.

You can stop your investments in SBI Large & Midcap since you already own another SBI fund. Also, both SBI Large & Midcap and Canara Robeco Emerging Equities belong to the same large- and mid-cap category of funds, and the latter has been a better performer over the long term.

Since you have stated that you can take above-average risk, you can stop investments in the equity hybrid fund and redirect it to Kotak Standard Multicap, a fund with a solid track record.

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Published on May 12, 2019
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