Mutual Fund Portfolio Help

#1
Hi Everyone,

I am looking to invest 5 lakhs in mutual funds with a time frame of 3-5 yrs
and need help in building a portfolio

The portfolio should be a mix of high risk and medium risk funds

It should also contain a mix of large caps, small and medium caps and thematic funds.

Can somebody please help me build this portfolio?

Also should i go for a lumpsum investment or for SIP?
 
#2
ok I have managed to put together a portfolio by going through valueresearchonline and moneycontrol

Large Cap

HDFC Top 200
Magnum Contra-G



Mid Cap

Sundaram BNP Paribas Select Midcap Reg-G

Reliance Growth-G


Are these choices good?

Please somebody help me
 

nikrod

Active Member
#4
Your choice of funds is good. you can also choose DSPBR Equity instead of Reliance Growth. Though I don't have any issues with Reliance Growth, I think it's huge asset base (6000+ crores) is a negative for it's nature which is to invest large portion in Mid caps & small portion in large caps. Smaller mid-large cap funds would be better off than Reliance Growth.
 

nikrod

Active Member
#6
If you follow your asset allocation strategy in disciplined manner & rebalance the portfolio annually, the profit booking would be sort of a automatic exercise.

For example if your asset allocation is 60% Equity & 40% Debt & initial portfolio size 1 lakh. Initially your portfolio contains 60,000 in equity & 40,000 in debt. Now suppose after a year equity delivers 40% returns while debt delivers 8%. Now the portfolio stands at Equity (84,000 – 66%) & Debt (43,200 – 34%). The rebalancing strategy involves getting percentage of equity & debt as decided initially i.e 60%-40%. After rebalancing Equity part would stand at 76,320 & debt would stand at 50,880. This effectively meant that you booked profit of 7,680 in equity by selling it.

Decide on asset allocation of your entire portfolio & follow it religiously. The profit booking & buying at dips will be taken care of automatically.

One more practice to follow is if any of your goal is coming nearer, move more & more investments in debt part for that goal.
 
#7
thanks nikrod

what do u think of tranferring profits from equity diversified mfs to a balanced fund like HDFC Prudence at regular intervals?

Are there any more good balanced funds?
 

nikrod

Active Member
#8
thanks nikrod

what do u think of tranferring profits from equity diversified mfs to a balanced fund like HDFC Prudence at regular intervals?

Are there any more good balanced funds?

Balanced funds would do for portfolio rebalancing. Some of the good balanced funds are DSPBR balanced, Reliance Regular Savings Balanced & Birla Sun Life 95.

DSPBR balanced & BSL 95 are safe players while HDFC Prudence & reliance RSF Balanced are aggressive funds.
 
#10
If you follow your asset allocation strategy in disciplined manner & rebalance the portfolio annually, the profit booking would be sort of a automatic exercise.

For example if your asset allocation is 60% Equity & 40% Debt & initial portfolio size 1 lakh. Initially your portfolio contains 60,000 in equity & 40,000 in debt. Now suppose after a year equity delivers 40% returns while debt delivers 8%. Now the portfolio stands at Equity (84,000 66%) & Debt (43,200 34%). The rebalancing strategy involves getting percentage of equity & debt as decided initially i.e 60%-40%. After rebalancing Equity part would stand at 76,320 & debt would stand at 50,880. This effectively meant that you booked profit of 7,680 in equity by selling it.

Decide on asset allocation of your entire portfolio & follow it religiously. The profit booking & buying at dips will be taken care of automatically.

One more practice to follow is if any of your goal is coming nearer, move more & more investments in debt part for that goal.
Excellent rebalancing strategy nikrod! Which debt funds do you suggest?

Regards,
Rakesh
 

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