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    Are these mutual funds suitable for low risk-taker?

    Synopsis

    If you have any mutual fund queries, message on ET Mutual Funds on Facebook. We will get it answered by our panel of experts.

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    I have a low risk-taking ability. I am investing Rs 7,000 per month through SIPs:
    Rs 2,000 in SBI Focused Equity Fund
    Rs 1,000 in SBI Multicap Fund
    Rs 2,000 in Axis Bluechip Fund
    Rs 1,000 in Aditya Birla Sun Life Tax Relief 96 Fund
    Rs 1,000 in Axis Long Term Equity Fund
    All schemes are in direct and growth plans. I am investing for the long term. Is this a good portfolio?
    - Sreejith Sree


    Low risk-takers or conservative equity investors are typically asked to invest in aggressive hybrid schemes (they 65-80% inequity and 20-35% in debt) or large cap schemes (they invest 80% of the corpus in large stocks). You have the option of investing in active or passive funds when it comes to investing in large cap schemes.

    You are currently investing in a focused multi cap scheme, diversified multi cap scheme, large cap scheme, and two ELSS or tax-saving schemes. Focused schemes invest in less than 30 stocks – that means they have a concentrated portfolio. That makes them riskier than diversified funds. If the fund manager gets his calls right, he will deliver superior returns. However, the opposite can also happen. Multi cap schemes have a little more risk than large cap schemes and they are meant for moderate risk takers. If you are okay with the extra risk, you may continue with the schemes.

    Things You should consider
    • Annualized Return
      for 3 year: 2.21%
    • Suggested Investment
      Horizon: >3 years
    • Time taken to double
      money: 3.8 Years
    Things You should consider
    • Annualized Return
      for 3 year: 6.3%
    • Suggested Investment
      Horizon: >3 years
    • Time taken to double
      money: 3.7 Years
    However, you should keep track of the changes that are likely in your multi cap schemes. Sebi has recently changed the investment mandate of multi cap schemes. The norms mandates these schemes to invest at least 25% of the portfolio in large cap, mid cap, and small cap schemes all the time. This will make these schemes riskier – they will invest around 50% in mid cap and small cap stocks. Mutual funds have time until January to announce their decision. So, keep track of the communications from your funds.

    You do not need so many schemes in your portfolio. You just need two schemes: One aggressive hybrid scheme or large cap scheme and one tax saving schemes. Do not try to include too many schemes in the name of diversification. The portfolio of your scheme offers you enough diversification.
    (If you have any mutual fund queries, message us on ET Mutual Funds on Facebook. We will get it answered by our panel of experts.)
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    1 Comment on this Story

    Arun Bhurke23 days ago
    I am retired person and I want to invest in mutual funds. Which mutual funds are suitable for me?
    The Economic Times