I have been investing ₹3,000 in Axis Triple Advantage and ₹2,000 in Axis Focused 25 for the last 18 months. My plan is to invest for at least 20 years. Please advise whether I should continue with these plans or switch to a different plan.

Wecheteu Khape

Axis Triple Advantage is an asset allocation fund that invests across equities, debt and gold. Asset allocation funds are not the best way to diversify your portfolio, it’s more sensible to invest separately in each asset class. Most asset allocation funds don’t have a track record of more than four years either, which makes it harder to judge the accuracy of these strategies. Axis Triple Advantage has also not performed well compared with peers. Stop SIPs here.

Axis Focused 25 too does not have a long-term track record, having been launched only in June 2012. Besides, the fund’s performance lags peers. Switch from Axis Focused 25 to Axis Equity and invest ₹3,000 there. Invest the other ₹2,000 in Franklin India Flexi Cap. These are quality large-cap and multi-cap funds, respectively.

I am 43. I have been investing ₹17,000 a month in the following for the last three years: ₹5,000 in IDFC Premier Equity Fund and ICICI Pru Focused Bluechip, ₹3,000 in Franklin India Bluechip and ₹2,000 a month in HDFC Prudence and HDFC Top 200. I want to continue this for the long term. I want to increase my investment by ₹5,000. Am I on the right track?

Vinod

You have done well in investing a good sum through SIPs spread over the years, with a long-term horizon. While you have a good mix of funds across market caps and fund houses, some changes are being suggested. Franklin India Bluechip and IDFC Premier Equity have solid long-term track records, but have lagged peers in the past couple of years. Stop your SIPs here.

Split the total of ₹22,000 thus – invest ₹5,000 each in ICICI Pru Focused Bluechip and BNP Paribas Equity, which are quality large-cap funds. Park ₹3,000 each in HDFC Top 200, a large and mid-cap fund, Mirae Asset India Opportunities (multi-cap) and Franklin India Smaller Companies, (small- and mid-cap fund). Put the remaining ₹3,000 in HDFC Balanced fund, as it is less risky than HDFC Prudence.

I am 28. So far, I have only one SIP running, for ₹1,000 in SBI Magnum Multiplier Plus. I plan to increase my SIP by ₹5,000. Should I invest ₹1,500 each in SBI Small- & Mid-cap and Birla Sunlife Top 100 or Franklin India Prima Plus, and ₹2,000 in Franklin India High Growth Companies? Will investing in large-caps give more returns than a multi-cap fund?

E Daniel Simpsson Martin

You have done well by starting out early on your savings, and increasing your monthly investments as well. You have ample time to allow the benefits on equity to accrue.

Addressing your last query first, a large-cap fund is safer than a multi-cap fund, but can generate lower returns. This is because large-cap funds restrict investments in the ‘high-risk high-return’ mid- and small-cap stocks to 15-20 per cent of their portfolios. Multi-cap funds alter their market capitalisations depending on market conditions and can ride on mid and small-caps in rallies to generate higher returns.

Coming to your investments, you can stop SIPs in SBI Magnum Multiplier. It has picked up well in the past few years and has a low-risk portfolio.

But its track record is uneven. Since you seem to be able to take more risk, going by your age and fund suggestions, split the ₹6,000 (your existing SIP of ₹1,000 plus the fresh ₹5,000) as follows:

Put ₹3,000 in UTI Equity, a large-cap fund, ₹2,000 in Franklin India High Growth Companies, a multi-cap fund, and ₹1,000 in BNP Paribas Mid-cap fund, a relatively safer mid-cap fund. This will give you a well-rounded portfolio. Keep track of your investments and take corrective action if needed. Balance out your portfolio by investing in PPF and fixed deposits as well.

Related Topics
comment COMMENT NOW