Your Fund Portfolio

I am 35 and currently investing in the following funds every month with a long-term perspective; SBI Magnum Global and Birla MNC – ₹3,000 each; Tata Balanced – ₹4,000 ; and BNP Paribas Long-Term Equity – ₹5,000. I am thinking of investing another ₹3,000 in Canara Robeco Emerging Equity. Please give your opinion on my choices. Should I go with the regular plan or direct?

Sudhir Soni

Although you have spread your choices across different fund houses, the portfolio lacks a well thought-out plan. You have two mid-cap funds (Magnum Global, and Canara Robeco Emerging Equities), a theme fund (Birla MNC) and one each of tax-planning (BNP Long-term Equity) and equity-oriented balanced fund (Tata Balanced).

When you are investing for the long term, it is always better to have a core portfolio of one or two stable large-cap-oriented funds with a good track record and then a satellite portfolio of other funds to give a leg-up to the returns. In all, for the ₹18,000 a month that you are willing to invest, rejig your portfolio as follows:

For your core portfolio, invest ₹5,000 in Franklin India Prima Plus, a fund that takes exposure predominantly to large-cap stocks and sports an impressive performance record. Invest ₹3,500 each in Mirae Asset Emerging Bluechip and Canara Robeco Emerging Equities, two top performers in the mid-cap category. These are superior performers to Magnum Global. If you are particular about having a tax-saving fund in your portfolio, you can retain BNP Long-Term Equity and put ₹3,000 in the same. But note that each SIP instalment in a tax-saving fund is locked in for three years.

Where you want to put the last lot of ₹3,000 depends on your risk appetite. Birla MNC has been among the best-performing fund in the last one, three and five-year periods, no doubt. But valuations in this space have inched up sharply, with the fund sporting a portfolio PE of about 57 times now. Considering that you are a long-term investor, if you have a high risk appetite and the wherewithal to withstand any prolonged corrections in such MNC stocks, you can continue your SIPs here.

Otherwise, considering that you already have two mid-cap funds in your portfolio, if you want to peg down your risk, you can invest ₹3,000 in Tata Balanced.

As regards direct plans, you can save 50-75 basis points on charges if you invest directly in different funds without intermediaries, such as brokers/distributors. Many fund houses allow you to invest online through their websites. But remember that when you want in invest in multiple funds, the legwork can be cumbersome. Each time you want to invest in a different fund house, you may have to submit an application along with all supporting documents.

I am 27 and working in a PSU. I want to invest ₹10,000 a month in equity schemes through SIPs. I can take high risk. I am already investing ₹2,000 in Axis Equity Fund, ₹3,000 in Axis Long-term Equity Fund and ₹2,000 in Franklin India High Growth Companies. Please advise.

Sandeep Patel

You have done well to invest in a top-performing ELSS fund, such as Axis Long-Term Equity. Continue your investment of ₹3,000 in this fund. Although Franklin High Growth is also a good performer, you can switch to Franklin Smaller Companies and invest ₹3,000 there, since you have a high risk appetite. This fund’s returns are consistently superior to that of Franklin High Growth. Since you already have a tax-saving fund from Axis, you can stop SIPs in Axis Equity. Invest ₹4,000 in Mirae Asset India Opportunities instead. It is also a large-cap-oriented fund with a better returns record than Axis Equity.

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