Mutual Funds

Your Fund Portfolio

Dhuraivel Gunasekaran | Updated on January 05, 2020 Published on January 05, 2020

I have been investing ₹4,000 each in Aditya Birla Sun Life Frontline Equity Fund and ICICI Prudential Value Discovery Fund since 2017; Franklin India Focused Equity Fund since 2018; and SBI Small Cap Fund and Mirae Asset Emerging Bluechip Fund for six months. I want to continue investing for another five to seven years. Kindly review my portfolio and advise if I can continue with the above SIPs.

Manjunatha

All the five schemes in your SIP portfolio have managed to deliver higher risk-adjusted returns than their respective benchmarks and categories, over the long term.

We have attempted to calculate the composition of your investment in these five schemes. The result shows that, of your overall investments in these schemes, 67 per cent, 13 per cent and 10 per cent of assets are in large-cap, mid-cap and small-cap stocks, respectively (based on AMFI’s MCAP classification). The remaining 10 per cent is kept as cash equivalents.

Further, your investment has been spread among 176 stocks; the top holdings are: HDFC Bank (6.1 per cent), ICICI Bank (5.5 per cent), Infosys (4.8 per cent), SBI (4.3 per cent) and NTPC (3.3 per cent).

At the sector level, higher allocation has been made in banking (20 per cent), followed by software (9.3 per cent), pharmaceuticals (7.5 per cent), finance (6.6 per cent) and petroleum products (6 per cent).

Well-diversified portfolio

You have a well-diversified portfolio in your SIP kitty, as each scheme belongs to different equity MF categories.

Aditya Birla SL Frontline Equity belongs to the large-cap category, and has delivered category-beating returns over the long run.

The performance as measured by three-year rolling returns calculated from the last seven years’ NAV history shows that the scheme delivered a compounded annualised return of 14.3 per cent, while the category delivered 12 per cent. The scheme has been rated four-star by BusinessLine Portfolio Star Track Mutual Fund Rating.

Funds that are rated five-star and four-star are considered good mutual funds to invest in. You can continue to hold the scheme.

ICICI Prudential Value Discovery Fund follows a value-investing approach with a large-cap mandate , a good choice, especially in equity market downturns. The fund has not put up a good show in the past few years. Value- investing needs to be given time to bear fruit.

Over the long term, the fund has outperformed its peers and benchmark. You can continue your SIP in this fund. The fund has been rated four-star by BusinessLine Portfolio Star Track Mutual Fund Rating.

Franklin India Focused Equity Fund invests in a maximum of 30 stocks within the multi-cap strategy. It is a suitable bet for the long term. However, in the short term, you need to be prepared for some volatility given its concentrated exposures, allocation to riskier smaller stocks and contrarian bets. The fund has been rated five-star by BusinessLine Portfolio Star Track Mutual Fund Rating.

SBI Small Cap Fund is the top performer in the small-cap category and has delivered consistent returns over the long term. The three-year rolling returns show that the scheme delivered a CAGR of 25 per cent while the category delivered 17 per cent. It has been rated five-star by BusinessLine Portfolio Star Track Mutual Fund Rating. Continue your SIP in this fund.

Falling under the large- and mid-cap category, Mirae Asset Emerging Bluechip Fund invests a minimum of 35 per cent each in large- and mid-cap stocks. Before the re-categorisation was announced in mid-2018, the fund was positioned as a mid-cap fund. The scheme has been the top-performing fund since its launch. It has been rated five-star by BusinessLine Portfolio Star Track Mutual Fund Rating. You can continue with the SIP in this fund.

The current market-cap allocation of your investments, as stated in the beginning, suits investors with medium-to-high risk profile.

If you are an investor with a high-risk profile, the allocation to mid-caps and small-caps may not be sufficient. You can start an SIP in Kotak Emerging Equity Fund, which is one of the top-performing funds in the mid-cap category. It allocates 65 per cent and 17 per cent of its corpus to mid- and small-cap stocks, respectively. It has been rated four-star by BusinessLine Portfolio Star Track Mutual Fund Rating.

Send your queries to mf@thehindu.co.in

Published on January 05, 2020
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