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    Can I continue with these mutual funds for the next five years?

    Synopsis

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

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    I am Investing in following mutual funds:

    Kotak Select Focus Fund: Rs 2,500
    SBI Bluechip Fund: Rs 2,000
    Mirae Asset Emerging Bluechip Fund: Rs 2,000
    L&T Midcap Fund: Rs 1,500
    SBI Small Cap Fund: Rs 1,500
    DSP Smallcap Fund: Rs 1,500
    ABSL Retirement Fund - the 30's plan: Rs 2,000
    HDFC Equity Fund: Rs 1,000
    Kindly let me know whether my selection of funds is right. I am a moderate investor. Can I continue with these funds for the next five years? Or should I drop any?

    -संदीप कुमार

    A moderate equity investor is asked to invest mostly in multi cap mutual funds. If he wants to diversify or reduce the overall risk in the portfolio, he is also asked to invest a small part of his portfolio in large cap mutual funds. You are currently investing in a multi cap mutual funds (Kotak Select Focus is renamed Kotak Standard Multicap Fund), large cap fund, large & mid cap fund, mid cap fund, two small cap funds, a retirement fund (you can treat it as a multi cap scheme, and multi cap scheme in the order you have stated.

    As you can see, large & mid cap, mid cap, small cap schemes are not suitable for a moderate risk-taker. They are meant for aggressive investors with a very large risk appetite and stomach for volatility. You may reassess your risk profile and if it is indeed moderate, you should stop investing in these schemes. You can invest the money in Kotak Standard Multicap Fund.

    Also, you have too many schemes in your portfolio. You do not need so many schemes, especially when you are investing a modest amount. Most regular investors need only two to four schemes, including tax saving schemes, in their portfolio. Too many schemes often results in overdiversificationn and duplication of portfolios. It dilutes the focus and drag down the overall returns from your portfolio.
    L&T Midcap Fund-Growth ★★★★
    Things You should consider
    • Annualized Return
      for 3 year: -2.03%
    • Suggested Investment
      Horizon: >3 years
    • Time taken to double
      money: 3.6 Years
    Things You should consider
    • Annualized Return
      for 3 year: 3.05%
    • Suggested Investment
      Horizon: >3 years
    • Time taken to double
      money: 2.7 Years


    (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

    FININVEST Mutual funds34 days ago
    Mr Sandeep hw u discovered that u r a moderate investor . every time when a investor decides ro invest the foremost question is WHY and not WHAT.WHY U WANT TO INVEST and then the answer will be what schemes wud be appropriate for me looking at the time horizon of ur investment objective (WHY) .u hav overtly diversified ur investments .if u r comfortable then hold for atleast 7 - 10 years or rejig ur portfolio soon if it is in positive
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