Mutual Funds

Your Fund Portfolio

Dhuraivel Gunasekaran | Updated on June 21, 2020

I am 30 years old and self-employed. Following are my monthly investments: ₹5,000 each in Axis Long Term Equity and Axis Bluechip; ₹3,000 each in Kotak Standard Multicap, SBI Equity Hybrid, SBI Magnum Medium Duration and Mirae Asset Large Cap; 2,000 in HDFC Small Cap; and ₹1,000 in HDFC Mid-Cap Opportunities. The investments are for a long term with a time horizon of 10-15 years. Apart from this, I also invest in stocks and the PPF. I am looking at adding 15 per cent every year to my MF portfolio. Can you advise on my portfolio?


It is good that you have started investing at a young age. You have a diversified portfolio, as each scheme belongs to a different MF category.

However, it requires some rejig. Given that you are young and also have a time horizon of 10-15 years, it would be better to have a more balanced asset allocation, spread across large-, mid- and small-cap stocks.

You currently invest ₹25,000 totally through SIPs, spread across eight schemes.

While calculating the composition of your investments in these eight schemes, around 76 per cent is allocated to equity assets, while 15 per cent is parked in debt papers.

Of the equity assets, 71 per cent, 20 per cent and 9 per cent of the assets are in large-, mid- and small-cap stocks, respectively (based on the Association of Mutual Funds in India’s (AMFI) classification).

You have eight mutual fund schemes in your SIP portfolio. This may add complexity while tracking their performance and lead to unnecessary portfolio overlaps as two schemes from a category can own the same set of stocks.

For instance, Mirae Asset Large Cap, Axis Bluechip and Axis Long Term Equity follow almost the same investment strategy of investing in large-cap funds. Axis Long Term Equity is one of the top- and consistently performing schemes under the ELSS (equity-linked savings scheme) category. It also provides you tax benefit u/s 80C. You can continue with that scheme.

Both Mirae Asset Large Cap and Axis Bluechip hold around 55 per cent of their assets (as of May 2020) in the same set of stocks. Though both are rated five-star by BusinessLine Portfolio Star Track MF Ratings, you can stop the SIP in Axis Bluechip and reroute that ₹5,000 to two schemes as mentioned later below.

The current market-cap allocation of your investments suits an investor with a moderate risk profile. Since you are young and have a long-term horizon, the allocation to mid-caps and small-caps can be higher.

Currently, you have HDFC Mid-Cap Opportunities and HDFC Small Cap in your portfolio, representing the mid- and small-cap segments. Both are rated three-star by BusinessLine Portfolio Star Track MF Ratings. The performances of these schemes have not been up to the mark over the past few years. You can stop the SIPs in both the schemes and hold the units.

Instead, you can reroute the ₹3,000 you are investing currently in the mid- and small-cap funds, and add ₹3,000 of Axis Bluechip, to a new SIP of ₹6,000 per month in Invesco India Mid Cap, which is one of the top-performing funds in the mid-cap category. It allocates 74 per cent and 14 per cent of its corpus to mid- and small-cap stocks, respectively.

It has been rated four-star by BusinessLine Portfolio Star Track MF Ratings.

The remaining ₹2,000 of Axis Bluechip can be rerouted to Kotak Standard Multicap.

You can continue your SIP in SBI Equity Hybrid and SBI Magnum Medium Duration as both are better-performing schemes in their respective categories. You can step up your SIPs across the revised portfolio of funds that we have suggested.

Periodical review of portfolio is advisable at least once in six months.

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Published on June 21, 2020

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