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Best mutual fund SIP portfolios to invest in 2019

Are you looking for a mutual fund portfolio to achieve your long-term financial goals? Here are some ready-made portfolios

ET Online|
Updated: Oct 22, 2019, 11.50 AM IST
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Here is a monthly update on our recommended mutual fund SIP portfolios to invest. There are no changes in the portfolios in October. However, we are keeping one of the recommended scheme under close watch.

The performance of UTI Regular Savings Fund, a conservative hybrid fund, has deteriorated recently. We will monitor the performance of this scheme closely for a while, and keep you updated on the same. If you have investments in this scheme, you may continue with it till the next update from us. New investors can choose ICICI Prudential Regular Savings Funds in their portfolio.

These best mutual fund SIP portfolios are meant for investors looking to invest in a mix of mutual funds to achieve their various financial goals. If you are looking for a mutual fund portfolio to achieve your long-term financial goals, you are at the right place. Here are some mutual fund portfolios that you can choose based on your risk profile and SIP amount.

A little bit of history before that. ETMutualFunds.com launched its recommended mutual fund portfolios to invest through SIPs in October 2016. Since then, we have been closely monitoring the schemes in these portfolios and coming out with an update on them every month.

Our reason to launch these portfolios was simple. We have observed that many mutual fund investors find it extremely difficult to stitch together to a few schemes (or create a mutual fund portfolio, in technical parlance) that would help them to meet their various long-term financial goals. This is especially true for new investors.

Indeed, creating a mutual fund portfolio involves several complicated steps. To begin with, you should shortlist some schemes with a consistent long-term performance record. Next, you should pick the schemes that are in line with your risk profile and investment goals.

Then you would hit the next roadblock: how to fix the composition of the portfolio? The task is not finished yet. You should also need to monitor and review the performance of the portfolio regularly and take remedial steps if needed. Too much to handle?

Well, do not worry. That is why we are here for. ETMutualFunds.com's best mutual fund SIP portfolios are meant for three different individual risk profiles: conservative, moderate and aggressive. We have also considered three SIP baskets – between Rs 2,000-5,000, between Rs 5,000-10,000 and above Rs 10,000 – while creating these portfolios. Take a look at our recommended portfolios.

Recommended portfolio for conservative investors
SIP amount Scheme name Percentage (%)
Rs 2,000 to 5,000 Axis Bluechip Fund - G 50
ICICI Prudential Regular Savings - G 50
Rs 5,000 to 10,000 Axis Bluechip Fund - G 30
ICICI Prudential Bluechip Fund - G 20
UTI Regular Savings Fund - G 50
Above Rs 10,000 Axis Bluechip Fund - G 25
ICICI Prudential Bluechip Fund - G 15
Motilal Oswal Multicap 35 Fund - G 10
UTI Regular Savings Fund - G 50

Recommended portfolios for moderate investors
SIP amount Scheme name Percentage (%)
Rs 2,000 to 5,000 Axis Bluechip Fund- G 65
ICICI Prudential Regular Savings - G 35
Rs 5,000 to 10,000 Axis Bluechip Fund- G 40
Motilal Oswal Multicap 35 Fund - G 25
ICICI Prudential Regular Savings - G 35
Above Rs 10,000 ICICI Prudential Bluechip Fund - G 30

Axis Bluechip Fund- G 15
Motilal Oswal Multicap 35 Fund - G 20
UTI Regular Savings - G 35

Recommended portfolios for aggressive investors
SIP amount Scheme name Percentage (%)
Rs 2,000 to 5,000 SBI Magnum Multicap - G 50
ICICI Prudential Bluechip Fund - G 50
Rs 5,000 to 10,000 Motilal Oswal Multicap 35 Fund - G 30
Axis Bluechip Fund- G 20
ICICI Prudential Equity and Debt Fund - G 15
Mirae Asset Emerging Bluechip Fund- Regular Plan -G 35
Above Rs 10,000 ICICI Prudential Bluechip Fund - G 35
SBI Magnum Multicap - G 10
Mirae Asset Emerging Bluechip Fund- Regular Plan -G 30
ICICI Prudential Equity and Debt Fund - G 10
TATA Equity PE Fund - G 15
Note, we have assumed that the investor is investing with an investment horizon of at least five years.

Here is our methodology:
Methodology for equity funds:
ET.com Mutual Funds has employed the following parameters for shortlisting the equity mutual fund schemes.
1. Mean rolling returns: Rolled daily for the last three years.
2. Consistency in the last three years: Hurst Exponent, H is used for computing the consistency of a fund. The H exponent is a measure of randomness of NAV series of a fund. Funds with high H tend to exhibit low volatility compared to funds with low H.
i) When H = 0.5, the series of return is said to be a geometric Brownian time series. These type of time series is difficult to forecast.
ii) When H is less than 0.5, the series is said to be mean reverting.
iii) When H is greater than 0.5, the series is said to be persistent. The larger the value of H, the stronger is the trend of the series
3. Downside risk: We have considered only the negative returns given by the mutual fund scheme for this measure.
X =Returns below zero
Y = Sum of all squares of X
Z = Y/number of days taken for computing the ratio
Downside risk = Square root of Z
4. Outperformance: It is measured by Jensen's Alpha for the last three years. Jensen's Alpha shows the risk-adjusted return generated by a mutual fund scheme relative to the expected market return predicted by the Capital Asset Pricing Model (CAPM). Higher Alpha indicates that the portfolio performance has outstripped the returns predicted by the market.
Average returns generated by the MF Scheme =
[Risk Free Rate + Beta of the MF Scheme * {(Average return of the index - Risk Free Rate}
5. Asset size: For Equity funds, the threshold asset size is Rs 50 crore

Methodology for debt funds:
ET.com Mutual Funds has employed the following parameters for shortlisting the debt mutual fund schemes.
1. Mean rolling returns: Rolled daily for the last three years.
2. Consistency in the last three years: Hurst Exponent, H is used for computing the consistency of a fund. The H exponent is a measure of randomness of NAV series of a fund. Funds with high H tend to exhibit low volatility compared to funds with low H.
i) When H = 0.5, the series of return is said to be a geometric Brownian time series. These type of time series is difficult to forecast.
ii) When H is less than 0.5, the series is said to be mean reverting.
iii) When H is greater than 0.5, the series is said to be persistent. The larger the value of H, the stronger is the trend of the series
3. Downside risk: We have considered only the negative returns given by the mutual fund scheme for this measure.
X =Returns below zero
Y = Sum of all squares of X
Z = Y/number of days taken for computing the ratio
Downside risk = Square root of Z
4. Outperformance: Fund Return – Benchmark return. Rolling returns rolled daily is used for computing the return of the fund and the benchmark and subsequently the Active return of the fund.
Asset size: For Debt funds, the threshold asset size is Rs 50 crore

Methodology for hybrid funds:
ET.com Mutual Funds has employed the following parameters for shortlisting the hybrid mutual fund schemes.
1. Mean rolling returns: Rolled daily for the last three years.
2. Consistency in the last three years: Hurst Exponent, H is used for computing the consistency of a fund. The H exponent is a measure of randomness of NAV series of a fund. Funds with high H tend to exhibit low volatility compared to funds with low H.
i) When H = 0.5, the series of return is said to be a geometric Brownian time series. These type of time series is difficult to forecast.
ii) When H <0.5, the series is said to be mean reverting.
iii) When H>0.5, the series is said to be persistent. The larger the value of H, the stronger is the trend of the series
3. Downside risk: We have considered only the negative returns given by the mutual fund scheme for this measure.
X = Returns below zero
Y = Sum of all squares of X
Z = Y/number of days taken for computing the ratio
Downside risk = Square root of Z
4. Outperformance
i) Equity portion: It is measured by Jensen's Alpha for the last three years. Jensen's Alpha shows the risk-adjusted return generated by a mutual fund scheme relative to the expected market return predicted by the Capital Asset Pricing Model (CAPM). Higher Alpha indicates that the portfolio performance has outstripped the returns predicted by the market.
Average returns generated by the MF Scheme =
[Risk Free Rate + Beta of the MF Scheme * {(Average return of the index - Risk Free Rate}
ii) Debt portion: Fund Return – Benchmark return. Rolling returns rolled daily is used for computing the return of the fund and the benchmark and subsequently the Active return of the fund.
5. Asset size: For Hybrid funds, the threshold asset size is Rs 50 crore

Also Read

An SIP portfolio for long-term wealth creation

An SIP portfolio for a first-time investor

Geojit launches equity SIP portfolios

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