Creating IDEAL Portfolio

[idealprofile]

I wanted to create an ideal and generic equity funds portfolio where most of investors can use it.
Please help with suggestions for making a ideal portfolio.

1. HDFC Top 200
2. DSP Top 100
3. Birla Frontline Equity Plan A

4. Reliance Regular Saving Equity

5. IDFC Premier Equity Plan A
6. Sundaram Select Midcap

7. HDFC Prudence


Is it fine to have 7 funds in a portfolio. Whether size shud be increased or decreased? How is choice of funds selection. Can one or two funds removed, if so reasons........
What do you guys suggest?

 

[balachandran]

My SIP portfolio is -
(all growth options)
HDFC Top 200
SBI Magnum Contra
Sundaram Midcap
Reliance Regular Saving Equity

 

[nikrod]

I wanted to create an ideal and generic equity funds portfolio where most of investors can use it.
Please help with suggestions for making a ideal portfolio.

1. HDFC Top 200
2. DSP Top 100
3. Birla Frontline Equity Plan A

4. Reliance Regular Saving Equity

5. IDFC Premier Equity Plan A
6. Sundaram Select Midcap

7. HDFC Prudence


Is it fine to have 7 funds in a portfolio. Whether size shud be increased or decreased? How is choice of funds selection. Can one or two funds removed, if so reasons........
What do you guys suggest?

Having 7 funds in portfolio is alright. But not more. As per the fund selection goes first 3 funds in your selection are complimenting each other. You can get rid of any one & keep two funds.

 

[rajenderballa]

Birla Frontline Equity and DSP Top 100 both looks good only. Which one would be better among the two? Similar case with Sundaram Midcap and Birla Midcap Plan A under midcap sector (both looks good) which one to choose? Reasons ??

Appreciate your responses.

 

[nikrod]

Birla Frontline Equity and DSP Top 100 both looks good only. Which one would be better among the two? Similar case with Sundaram Midcap and Birla Midcap Plan A under midcap sector (both looks good) which one to choose? Reasons ??

Appreciate your responses.

Birla Frontline Equity is large cap fund which takes some mid cap exposure as well. Whereas DSPBR Top 100 takes lower mid-cap exposure and can be categorized as large cap fund. Personally I would choose HDFC top 200 (Manager: Prashant Jain) & DSPBR Top 100 (Manager: Apporva Shah). Both have good fund managers & quite impressive performance.

As per the mid cap funds, my personal choice would be ICFC Premier Equity. But opinion differs from investor to investor.

 

[idealprofile]

Thanks Nikrod, Your decision making choice is quite impressive, So the sequence goes like this... HDFC Top 200, DSP Top 100, Reliance Reg Savings Equity, HDFC Prudence and IDFC Premier Equity. Even my first choice in midcap would be IDFC Premier Equity.

But to add one more midcap (total goes for 6 funds) which fund can be voted for? Sundaram midcap or Birla midcap? or any other better choice.

Both are performing well in longterm and recently Birla midcap is awarded as best midcap by morning star where as Sundaram midcap has consistent in long term track record. If rated by fund manager or any other reasons which will be best bet.

 

[nikrod]

But to add one more midcap (total goes for 6 funds) which fund can be voted for? Sundaram midcap or Birla midcap? or any other better choice.

Both are performing well in longterm and recently Birla midcap is awarded as best midcap by morning star where as Sundaram midcap has consistent in long term track record. If rated by fund manager or any other reasons which will be best bet.

Both are good funds. So flip the coin & choose any one of them.

Remember the principle of MF investing put forward by researchers "The overall porfolio return is 90% affected by asset allocation strategy & only 10% is result of good fund selection!"

 

[blitz2280]

I see that you are analyzing your investments very carefully. But personally I feel that you are putting your effort in the wrong place.

I dont think mutual fund are good way to get into Equity market. Sometimes I feel bad that even intelligent investors in our country are still stuck in no profit schemes of mutual funds. Just compare the returns from your investments with sensex. You will find that they are doing much worse than sensex.

I think one should directly invest in share market. Because it is not difficult to beat the sensex. I have come across quite good study materials and investment strategies over the internet which can help a disciplined investor get a 40 percent average return consistently without to much risk or effort.

 

[nikrod]

I see that you are analyzing your investments very carefully. But personally I feel that you are putting your effort in the wrong place.

I dont think mutual fund are good way to get into Equity market. Sometimes I feel bad that even intelligent investors in our country are still stuck in no profit schemes of mutual funds. Just compare the returns from your investments with sensex. You will find that they are doing much worse than sensex.

I think one should directly invest in share market. Because it is not difficult to beat the sensex. I have come across quite good study materials and investment strategies over the internet which can help a disciplined investor get a 40 percent average return consistently without to much risk or effort.

Mutual funds are still the best way for a novice investor who does not have time or ability to analyze & track stock market.

I also do not agree with the fact that Indian mutual funds are not beating Sensex or their respective benchmark. Many good Indian MF's have beaten benchmark over past 5 to 15 years.

You say it is not difficult to beat the benchmark? Why then are many profession fund managers who have all the analysis available fail to beat the market? And 40% average return consistently without risk can only happen in dreams. With every reward there comes the risk.

Knowledgeable investors can go for direct equity investment. You need effort & time to analyze & follow your investments. If one has that direct equity investment will be advisable.

 

[blitz2280]

Mutual funds are still the best way for a novice investor who does not have time or ability to analyze & track stock market.

I also do not agree with the fact that Indian mutual funds are not beating Sensex or their respective benchmark. Many good Indian MF's have beaten benchmark over past 5 to 15 years.

You say it is not difficult to beat the benchmark? Why then are many profession fund managers who have all the analysis available fail to beat the market? And 40% average return consistently without risk can only happen in dreams. With every reward there comes the risk.

Knowledgeable investors can go for direct equity investment. You need effort & time to analyze & follow your investments. If one has that direct equity investment will be advisable.

Hi Nikrod,
Apologies if my opinion sounded brash. I just checked the numbers of some of these mutual funds. Some of them do better than sensex.

I used to invest in ELSS mutual fund earlier as anyways you get a 30 percent tax benefit. Simple way of picking mutual fund was to go to Moneycontrol and pick up the 3 top ranked mutual funds with 5 stars extra. The problem is what is performing great today, can go bad tomorrow. Unlike shares price, one does not keep an eye on the NAV. Anyways I have never got satisfactory returns (beating sensex), and got losses some times (sensex also fell, but this fell more).

I have been using a system of technical analysis for share investing. Stop losses are quite close at only 5-10%, so risk is small. Gains have been good as I have mentioned. And it is neither difficult nor time taking. I spend just about 10 minutes a day to decide whether/what to buy/sell tomorrow.

Why a large number of mutual fund dont beat sensex? My idea is they are very big. In crisis times they cannot sell off all their shares. That will finish of share market itself. We individuals can move quickly. Plus they have employee and dealers to pay salaries and commissions.