How to restructure my mutual fund portfolio?
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Reliance Small Cap Fund: Rs 1,000
SBI Small Cap Fund: Rs 1,000
HDFC Short Term Debt Fund: Rs 2,000
Kotak Standard Multicap Fund: Rs 3,500
Axis Long Term Equity Fund: Rs 8,000
Aditya Birla Sun Life Tax Relief 96: Rs 3,000
Mirae Asset Large Cap Fund: Rs 2,500
I have a moderate risk appetite.
An equity investor with a moderate risk appetite is typically asked to invest mostly in multi cap schemes. If she wants to diversify and reduce the overall risk in the mutual fund portfolio, she may take a small exposure to large cap mutual funds or aggressive hybrid schemes. Similarly, if the investor wants to take some extra risk to earn more returns, she can consider a small exposure to mid cap schemes.
You are currently investing in two small cap schemes, two tax-saving schemes, a short duration fund, multi cap scheme, and a large cap scheme. Most of your investments are in tax-saving schemes. You may continue with them if your aim is to save taxes under Section 80C of the Income Tax Act. It is not clear why you are investing in a short duration debt scheme. Short duration debt schemes are meant to invest for a year or two and it doesn’t suit your stated goal of wealth creation. Similarly, small cap schemes are not suitable for moderate risk-takers. These schemes are highly risky and volatile. They are recommended to aggressive investors with a very high risk tolerance and ability to withstand extreme volatility.