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Should I drop any mutual funds from my portfolio?

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

ET Online|
Nov 07, 2019, 03.31 PM IST
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I have started monthly SIPs of Rs 45,000 in the following funds in September. Is the portfolio well diversified? Are there too many funds? If so, which schemes should I drop? My investment horizon is around 18 years and risk profile is moderate.

Axis Bluechip Fund: Rs 5,000
Axis Midcap Fund: Rs 3,000
Mirae Asset Emerging Bluechip Fund: Rs 4,500
Kotak Standard Multicap Fund: Rs 4,500
SBI Small Cap Fund: Rs 2,000
Invesco India Growth Opportunities Fund: Rs 6,500
Kotak India EQ Contra Fund: Rs 6,500
Mirae Asset Large Cap Fund: Rs 6,500
Axis Focused 25 Fund: Rs 6,500
-- Deepak Ram

Mutual fund advisors typically ask long-term investors with a moderate risk profile to invest mostly in multi cap mutual funds. If the investor wants to diversify and lower the overall risk in the portfolio, he can also invest in large cap schemes. The proportion of large cap mutual funds would depend on the profile of the investor and his return expectations from the portfolio.

You are currently investing in two large cap schemes, two large & mid cap schemes, a mid cap scheme, multi cap scheme, small cap scheme, value-oriented, and focused multi cap scheme. As you can see, you have only two multi cap schemes and two large cap schemes in your portfolio that are in line with your risk profile. Large & mid cap schemes, mid cap schemes, and small cap schemes are not suitable for a moderate investor. If you wish, you can use the value-oriented scheme (Kotak India EQ Contra Fund) as a tool for diversification.

If you are new to mutual funds and do not understand much about investing in mutual funds, you should seek the help of a mutual fund advisor. Also, try to adopt a goal-based approach to achieve your various financial goals in life. The strategy will also help you to be a successful investor.
(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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