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    Are we investing in the right mutual funds?

    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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    My current mutual fund portfolio is:
    Kotak Standard Multicap Fund: Rs 2,000

    I am also investing Rs 1,000 in each of these schemes:
    Reliance Small Cap Fund
    Tata Equity PE Fund
    L&T Midcap Fund
    Mirae Asset Large Cap Fund
    Mirae Asset Emerging Bluechip Fund
    Axis Multicap Fund

    My goal is wealth creation, and I want to invest for 10 years. I am a moderate risk-taker.

    My wife is also investing in ICICI Prudential Bluechip Fund (Rs 2,000) and HDFC Small Cap Fund (Rs 1,000).

    How is our portfolio? How the funds are?
    -Rahul Banerjee


    You are investing Rs 8,000 in seven equity mutual fund schemes. You are investing in too many schemes. You don't need more than two schemes in your mutual fund portfolio since you are currently investing a modest amount.

    Also, your mutual fund portfolio is not in line with your stated risk profile. If you are a moderate risk taker, you are supposed to invest mostly in multi cap schemes. You may also add a large cap scheme if you want to diversify and reduce the overall risk in your fund portfolio.

    Things You should consider
    • Annualized Return
      for 3 year: 2.33%
    • Suggested Investment
      Horizon: >3 years
    • Time taken to double
      money: 3.8 Years
    Things You should consider
    • Annualized Return
      for 3 year: -0.14%
    • Suggested Investment
      Horizon: >3 years
    • Time taken to double
      money: 3.5 Years
    You certainly cannot invest in mid cap and small cap schemes as they are meant for aggressive investors who can afford to take more risk and have the ability to withstand volatility. Even large & mid cap schemes are riskier as they are mandated to invest around 33 per cent of the corpus in mid cap stocks.

    Remember, top-ranked funds do not make a good mutual fund portfolio. Your mutual fund portfolio should be in line with your goals, investment horizon, and risk profile. Otherwise, you would try to tinker with it and lose an opportunity to create desired wealth.

    If you are new to mutual funds, you must consult a mutual fund advisor. An advisor would offer you personalised advice and can guide you better in your initial years of investment journey. You should try to gain enough knowledge and experience about investing in mutual funds before starting to invest on your own.

    (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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    2 Comments on this Story

    Selva Raj437 days ago
    Sir
    I have planing to invest 20000 for following funds
    Multicap fund 6000
    ELSS fund 4000
    Small cap fund 4000
    Debt fund 6000
    I want to invest 30 years
    Please give me right fund to above category
    Pranjit Prasad Sahoo451 days ago
    Sir,I m moderate risk taker & I investing in the following funds so let me know is my portfolio is in right direction?
    1.Motilal oswal 25 fund Rs3000/= per month
    2,Mirae asset blue chip fund direct growth Rs 1500/=
    3,Canara Robeco Emerging equity funds Rs 1500/=
    4.Sbi blue chip fund Rs 3500/=
    5.HDFC equity fund Rs 3000/=
    6.IDFC TAX saver fund 4000/=
    6 L&T india value fund Rs 2000/=
    7 SBI MAGNUM TAX saving fund Rs2500/=
    8 Axix tax saving fund Rs2000/=
    All above SIPS investing in month basis & my goal will be to create wealth for children education & wants to invest more than 10 years
    So please let me know is I m investing in right way.
    The Economic Times