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FSM In Media: How To Get A Balanced Mutual Fund Portfolio?
September 1, 2015

This chat transcript was published in on Tuesday, September 01, 2015.

Author : Dr. Renu Pothen

How to have a balanced mutual fund portfolio?

guest: i has invested 1,00,000/- lump-sum in Reliance small cap fund for span of 15 years. whats your opinion, Good or Bad Decision ??
Dr Renu Pothen:Reliance Small Cap Fund is normally recommended for aggressive investors on account of the volatile nature of this fund. If your risk profile is aggressive, then this is a good investment option.
guest: My current 5 SIPs are: 1. Rs.1500 - DSP BlackRock Dynamic Asset Allocation Fund - Reg 2. Rs.2000 - DSP BlackRock Tax Saver Fund - G 3. Rs.2000 - L&T India Prudence Fund - G 4. Rs.2000 - Mirae Asset India Opportunities Fund - G 5. Rs.2000 - Principal Emerging Bluechip Fund - G Should I replace anyone with - Franklin india prima fund - Birla sublife equity fund - Icici prudential value discovery fund

Dr Renu Pothen: If your SIP into these funds has not completed 3 years then you can continue with this portfolio. As for the alternatives, if you want a mid cap fund then you can consider Canara Robeco Emerging Equities instead of Franklin India Prima.As for the multi cap space, you can either increase the exposure into Mirae Asset India Opportunities Fund or consider Kotak Select Focus Fund. You can take an exposure into ICICI Prudential Value Discovery Fund.

guest:Hello Renu, currently my portfolio is full of high risk small cap investment. I know the performance is not too good at the moment and moreover the tenure is also very less at the moment. But, I wanted to understand if retaining the fund in small cap would be advisable in the long run as I have no plans to disturb the fund for atleast 10 years.
Dr Renu Pothen: We normally suggest small cap funds for aggressive investors who have a time horizon of more than 5 years. Hence if you have a longer time horizon, then you need not worry about the short term volatility that this category is going through.However,you need to make sure that your portfolio consist of not just small cap funds but other categories of funds as well.
guest: Which one is safer in current volatile market if it continue for longer period -Balanced Fund or Large Cap Fund -Which Funds from these will you recommend for SIP for longer duration

Dr Renu Pothen:Large Cap Funds will be less volatile during the different market cycles.However; balanced funds will give investors an exposure into equity and debt as well. But in the case of balanced fund, the market cap can be biased towards the large cap or the mid cap space. This can subject the fund to volatility. In the current scenario, you can take an exposure into a large cap fund and a balanced fund as well depending on your risk appetite.

pkkarthick84: Presently i am investing Rs. 2000/month in ICICI Prudential Banking & Financial Services Fund. Shall i continue this fund. Please suggest this fund for next 2 years
Dr Renu Pothen: You can continue with this investment. Your time horizon should be more than 2 years for this investment.
guest: Hi I am holding Axis Long Term Equity Fund(G), Birla SL Frontline Equity-G, Birla SL Top 100-G, Franklin Build India-G, Frankilin India High Growth Companies Fund-G, HDFC Balanced Fund-G, ICICI Prudential Banking & Financial Services Fund-G and ICICI Prudential Exports & Other Services Fund-G 1500 each SIP for a period of 5 years. Pls suggest whether my portfolio is correct and should I continue. I am doing it for past 1 year. and I am 30 years old. Need your suggestion please.
Dr Renu Pothen: You can continue with the existing investments. If you are an aggressive investor, you can take a small exposure into mid cap funds as well. However, please remember to review this portfolio on a regular basis.
guest: I invest in ELSS tax saving mutual funds but I noticed that most of them have their major investments in banking sector, which I think is a bit risky. Can you please tell why do they rely on banking sector and should I continue with them or change my portfolio to cover other sectors as well ?
Dr Renu Pothen: Investment into the banking sector is not exclusive to ELSS.Most of the diversified funds have a good exposure into this sector. If you are looking at mutual funds for tax benefits, then you can continue with ELSS.
guest: is the good time for mutual fund ?
Dr Renu Pothen: You can enter the mutual funds via the SIP route. This means that you really need not time the markets for entry.
guest: In the present market scenario, how long should a mutual fund investor stay invested through SIP mode of investment, to get a good return?
Dr Renu Pothen: In any market cycle, you should stay invested in equity mutual fund for more than 5 years.

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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