Your Fund Portfolio

I am 51 and work for a bank. I have been investing ₹5,000 every month in each of the following for the last one year: ICICI Pru Focused Bluechip, ICICI Pru Dynamic and Franklin India Smaller Companies. I have stopped investing in HDFC Top 200. Now I wish to invest an additional ₹5,000 and can take high risks. Kindly suggest suitable funds for investment and also comment on my overall portfolio.

Swamulu Kandimalla

While you have been relatively late in starting your fund investments, there is still enough time to generate reasonable inflation-beating returns if you stick on till you turn 60. You have stated that you can take high risks but your age and likely retirement in another nine years mean that tempering risk appetite may be necessary.

But in case you do have sufficient investments in fixed instruments and are also likely to get substantial retirement benefits apart from a regular pension, you can consider taking more risks.

Since HDFC Top 200 has lagged top peers in recent times, your move to stop further investments in it is understandable.

Now, split ₹20,000 (including the additional ₹5,000) as follows: invest ₹4,000 each in ICICI Pru Focused Bluechip and Franklin India Smaller Companies. Since you already have a large-cap fund from the same house, you can stop investing in ICICI Pru Dynamic. Also, this scheme is a tad defensive. You can invest ₹4,000 in Mirae Asset India Opportunities, a multi-cap scheme with a proven record. For the balance ₹8,000, you can consider investing ₹4,000 in HDFC Midcap Opportunities, while another ₹4,000 can be parked in UTI Equity, a quality large-cap name.

Thus, your portfolio would have two large-caps, one multi-cap and a couple of mid-cap schemes, giving it sufficient balance, while also being a tad aggressive.

Review the schemes in your portfolio once every year and take corrective action, if necessary, and rebalance.

It would be advisable to have a target corpus in mind and book profits or sell units when the goal is reached ahead of time.

I have been investing a total of ₹9,000 every month for the past two years for building a retirement corpus and have a 20-year time frame. The schemes are Quantum Long Term Equity and IDFC Premier Equity. Both the schemes have not been performing that well, of late. Should I change the schemes and opt for other funds?

Ranjit

Both Quantum Long Term Equity and IDFC Premier Equity have good long-term track records. But as you have rightly pointed out, both the schemes have underperformed top peers. For IDFC Premier Equity, the other concern is that its longstanding fund manager has recently quit.

It would be advisable, therefore, to stop further investments in these two schemes. Invest, instead, in UTI Equity and ICICI Pru Value Discovery. The former is a large-cap scheme and the latter a proven mid-cap.

Since you are saving for a long-term goal such as retirement, invest in other assets such as debt (PPF, NSC), gold and real estate to create a balanced portfolio.

I am 25 and wish to invest in mutual funds. I can park ₹5,000 every month. Please suggest schemes for five-six years.

Girish Kumar

Since you are just starting off on fund investments, you should consider large-cap or balanced schemes. But you must have a time horizon of 7-10 years at least so that you beat standard indices and inflation convincingly. But if you need the money within a five-six-year time frame, invest ₹2,500 each in Franklin India Bluechip and Tata Balanced. A conservative portfolio is suggested as you are a beginner and have a relatively shorter investment horizon.

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