Mutual Funds

Your Fund Portfolio

Parvatha Vardhini C | Updated on April 05, 2020

My wife (32) and I (35) invest ₹36,000 per month in SIPs. Following is the portfolio. All are direct-growth options. I invest ₹7,000 per month in Axis Bluechip, ₹3,000 each in Franklin India Bluechip, Invesco India Contra and Kotak Standard Multicap, and ₹2,000 each in Franklin India Pension Plan, Axis Banking & PSU Debt and HDFC Hybrid Equity. My wife invests ₹3,000 in Axis Bluechip, ₹2,000 each in Axis Tax Saver, ICICI Prudential Equity & Debt, Mirae Large Cap and Kotak Corporate Bond, and ₹1,000 each in Franklin India Equity, ICICI Bluechip and Tata Equity PE. I want to invest ₹1,000 each in Axis Small Cap and HDFC Small Cap additionally. We are planning to start a family soon. Our financial goals are wealth generation over 15-20 years and a good retirement corpus. Kindly advise.


You are investing 73 per cent of your portfolio in pure equity funds (Axis Bluechip, Franklin Bluechip, Invesco Contra and Kotak Standard Multicap) and predominantly in large-cap funds, 9 per cent in aggressive hybrid funds (HDFC Hybrid Equity), and 18 per cent in debt/solution-oriented funds that invest predominantly in debt (Axis Banking & PSU Debt and Franklin India Pension Plan). This allocation suits a moderate risk appetite.

Three funds that you are investing in (Axis Bluechip, Kotak Standard Multicap, Axis Banking & PSU Debt) are rated five-star by BusinessLine Portfolio Star Track MF Ratings, while one (HDFC Hybrid Equity) is rated three-star. You can continue to invest in these funds. Invesco Contra and Franklin Pension Plan are unrated, considering that they are thematic.

However, they, too, have a good track record and, hence, you can continue your SIPs. Remember that Franklin Pension Plan has a lock-in of five years which implies every SIP will be locked in for the same period.

There is also an exit load of 3 per cent if redeemed before the age of 58 years.

Franklin Bluechip alone is rated one-star. The fund has been an underdog in the large-cap category over one-, three- and five-year periods both in terms of point-to-point returns as well as SIP returns. You can stop SIPs in this fund and redirect the sums to Axis Bluechip itself. Else, you can consider BNP Paribas Large Cap, Canara Robeco Bluechip Equity or Mirae Asset Large Cap.

Considering that you are only 35 and are investing towards long-term goals, your desire to add small-cap funds is understandable. The markets have corrected sharply recently and valuations of small-cap stocks have lost some froth.

Small-cap funds suit long-term investors with an appetite for high risk. You can invest ₹2,000 entirely in one small-cap fund. You can choose SBI Small Cap.

Moving to your wife’s portfolio, about 70 per cent of her funds are going into equity schemes (predominantly into large-cap funds), and the remaining is equally divided between aggressive hybrid (ICICI Pru Equity & Debt) and debt (Kotak Corporate Bond) categories. This 70:30 allocation is somewhat similar to yours and suggests a moderate risk appetite. All the funds that she invests in are rated 3-5 stars by BusinessLine’s proprietary ratings.

She can continue her SIPs.

You both are investing in direct plans and also have a long list of funds. Do keep track of your investments and their performances at regular intervals through the monthly Consolidated Account Statement (CAS) received from the depositories should help you in this regard.

If record-keeping and keeping track of investments becomes cumbersome, you can consolidate holdings in multiple funds belonging to the same category into one fund. For instance, your wife invests ₹6,000 across three large-cap funds. This can be consolidated into one fund.

As your family grows and your income levels also go up, you can set up SIPs for separate goals such as children’s higher education or part-funding a home-buy.

Published on April 05, 2020

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