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FSM In Media - How to have a balanced mutual fund portfolio?
June 12, 2013

This chat transcript was published in on Tuesday, 11 June 2013

Author : Dr Renu Pothen

How to have a balanced mutual fund portfolio?

guest: Greetings!!!, I am planning to invest as follows for Rs 11000 monthly SIP:- 1. ICICI Pru Focused Bluechip Fund(G) - Rs 3500 2. UTI Opportunities Fund (G) - Rs 1000 3. Birla SL India GenNext Fund(G) - Rs 3000 4. UTI MNC Fund (G) Rs 1000 5. SBI Emerging Businesses Fund(G) - Rs 2500 6. Birla SL MNC Fund(G) - Rs 1000 I am doing good here or am I diversifying too much here, Please suggest, Thanks
Dr Renu Pothen: As for your portfolio my suggestion is that you can take an exposure into one of the MNC funds rather than going in for 2 funds from the same category.The other funds in the portfolio looks fine.
guest: What is the strategy we should apply while choosing a MF, should we keep revising our portfolios peridiocally according to CRISIL ratings or returns?, please suggest .... Thanks
Dr Renu Pothen: Firstly funds should be selected on the basis of your risk profile. Some of the factors that has to be considered while selecting a fund are Pedigree of the fund house, Track record of the fund manager, Performance of the fund during different market cycles and Expense ratio of the fund. You should periodically review your portfolio.
verisoft1775: Would like 2 know about 2 M/F in my portfolio 1. Reliance Gold Savings Fund(G)SIP(5000/-) 4m: 20/06/2011. 2. UTI Opportunities Fund Growth Plan(G) SIP(3000/-)4m:22/06/2012 shall I continue or discontinue with these funds
Dr Renu Pothen: You can continue with the existing funds.
guest: I have been investing in following funds via sip for creating wealth in the long term (horizon 20 to 25 yrs) a)L&T equity fund b)DSPBR Top 100 c)IDFC premier equity plan A d)Quantum Long term equity e)FT india blue chip fund f)SBI emerging business fund and L&T Global Real assests fund. Is my funds are on track or do i need to add a balanced fund to my portfolio
Dr Renu Pothen: You have three multi cap funds which can be reduced to two.You need not take an exposure into a balanced fund. However as you do not have investments into a debt fund, my suggestion is that you can take an exposure into the same. We are positive on short term funds and dynamic bond funds. Our recommended funds in this space are PineBridge India Short Term Fund/Templeton India Short Term Income Plan. In the dynamic space you can consider either IDFC Dynamic Bond Fund/Reliance Dynamic Bond Fund.
guest: Hi Doc, I want to start SIPs of 15,000 each in ICICI Pru Focused Bluechip, UTI Opportunities, SBI Emerging Businesses, Reliance Equity Opportunities and SBI FMCG funds for 10-15 years horizon. Is this a good selection? Thanks.
Dr Renu Pothen: The funds that you have selected are the best in their respective categories. However,You need to review this portfolio on a regular basis.
guest: Is it mandatory to have a balance fund in one portfolio despite the fact that the investor had been investing in top performing equity funds for the long term horizon to create wealth. My opinion is that if you are looking for long term stay invested in equity mf which has the potential of creating high returns in the long turn then the debt mf. Whats ur call on this?
Dr Renu Pothen: I have been of the opinion that if the investor can create a portfolio with a good mix of equity and debt funds then this should be able to outperform the balanced funds.
guest: Is mutual fund good for investing for retirement?
Dr Renu Pothen: Mutual funds are good for retirement. Here the investor needs to create a good portfolio for retirement which should be different from other portfolios. For instance if you are young and want to save for retirement then the maximum allocation should be invested in equities and later on with time you can increase the exposure into debt funds.
guest: Hello Dr. Renu, I want to know about two ELSS fund option for tax saving purpose and my investment horizon is 10 years. Is it good to invest in two funds from investment diversification point of view(keeping in mind that I am investing in 2 MF ELSS only).
Dr Renu Pothen: In the ELSS category you can consider Franklin India Taxshield and ICICI Prudential Tax Plan.For diversification you will have to get an allcoation into other categories of funds as well.
guest: Hello Dr Renu, I am Naresh,32 years Old . I planned to invest 30K per month via SIP for about 15 years and as of now I have selected the following 3 funds and started investing begining Feb 2012. (1)ICICI Pru Focused Bluechip Eqty (G) - 5K/Mon,(2) HDFC MidCap Oppor(G)-5K/Mon.(3)Reliance Small Cap Fund (G)5K/Mon,(4) Birla SL Frontline Equity -A (G) -1K Per Month (33 months over),(5) HDFC Top 200 Fund (G) -1K Per Month (34 months over) At this instance,
Dr Renu Pothen: You have 3 large cap funds which can be reduced to 2.
guest: Is hdfc balanced fund and HDFC top 200 good for retirement purpose?
Dr Renu Pothen: Both the funds are performing well in their respective categories. However for retirement you will need to take an exposure into more funds to achieve the goal.

Disclaimer:iFAST and/or its content and research team’s licensed representatives may own or have positions in the mutual funds of any of the Asset Management Company mentioned or referred to in the article, and may from time to time add or dispose of, or be materially interested in any such. This article is not to be construed as an offer or solicitation for the subscription, purchase or sale of any mutual fund. No investment decision should be taken without first viewing a mutual fund's offer document/scheme additional information/scheme information document. Any advice herein is made on a general basis and does not take into account the specific investment objectives of the specific person or group of persons. Investors should seek for professional investment, tax, and legal advice before making an investment or any other decision. Past performance and any forecast is not necessarily indicative of the future or likely performance of the mutual fund. The value of mutual funds and the income from them may fall as well as rise. Opinions expressed herein are subject to change without notice.


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