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    Should I change mutual funds in my portfolio?

    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 the following SIPs:
    DSP Small Cap Fund: Rs 2,500
    SBI Bluechip Fund: Rs 2,000
    L&T Emerging Business Fund: Rs 2,000
    I want to invest more. Can you suggest more funds? Is there any need to rebalance these SIPs? My risk profile is moderate, and my investment horizon is five to seven years.

    -Manish Kapasia

    You are currently investing in two small cap funds and a large cap scheme. This is not a mutual fund portfolio meant for a moderate risk taker. Most of your investments are in small cap funds. They are meant for aggressive investors who are ready to take more risk and can withstand lot of volatility. Also, they should have a longer investment horizon of seven to 10 years.

    We typically ask moderate investors to invest mostly in multi cap funds. They can also take a small exposure to large cap funds if they want to reduce the overall risk in the portfolio.

    You should adopt a goal-based investing. Identify your goals, put a number to them, provide for annual inflation to reach a realistic target. Then put together an investment plan to achieve those targets. Always choose mutual funds based on your risk profile.
    Things You should consider
    • Annualized Return
      for 3 year: -5.85%
    • Suggested Investment
      Horizon: >3 years
    • Time taken to double
      money: 1.7 Years
    SBI Bluechip Fund-Growth ★★★★★
    Things You should consider
    • Annualized Return
      for 3 year: 0.94%
    • Suggested Investment
      Horizon: >3 years
    • Time taken to double
      money: 4.11 Years

    You do not have to invest in new mutual fund schemes to invest more. You can always invest more in your existing scheme. Do not spread your investments across many schemes when you are investing a small amount. Such a strategy would not help you to achieve meaningful diversification. In fact, it often results in diluting your returns and portfolio.
    (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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