Comment on my choice

[hamir]

I am 32 and have 4 lac invested in MF thru SIP over last 3-4 years. My current selection of SIP is like below. Would like to understand if I can make it any better or continue down same path. Suggestions from experts are welcome.

HDFC TOP 200 -- 2500
DSP BR top 100 -- 5000
Birla SLF equity--5000
HDFC PRUDENCE-- 2000
DSP BR equity -- 1000
SBI Magnum contra--1000
ICICI prudential infrastructure--1000
Reliance diversified power -- 1000

Yes..I do have goals but let's assume that I want to built a corpus for myself after 15 years.

 

[simple_trader]

I think a couple of things can be reviewed.

- you have many funds, these can be reduced to 3-4 funds.

- You have some sectoral funds, this can be moved to equity diversified fund.

- If you need fund after 15 years, I think you can start STP (systematic transfer plan) from equity to debt fund after 10 years, allow transfer to happen for remaining 5 years. So that you do not lose money if there is any big correction after 14th or 15th years.

- I have seen fund to have big performance difference when fund manager changes. You need to keep a close eye on if there is any change.

 

[nikhilfake]

I think a couple of things can be reviewed.

- you have many funds, these can be reduced to 3-4 funds.

- You have some sectoral funds, this can be moved to equity diversified fund.

- If you need fund after 15 years, I think you can start STP (systematic transfer plan) from equity to debt fund after 10 years, allow transfer to happen for remaining 5 years. So that you do not lose money if there is any big correction after 14th or 15th years.

- I have seen fund to have big performance difference when fund manager changes. You need to keep a close eye on if there is any change.

Totally agree with the above. You need to tell when is the requirement for the money.

1. If the requirement is far off , say 5 or more years, I'll ask you to invest in a mid cap fund with 2000 since you have mostly large caps.
2. remove ICICI infra and Rel Power and replace with a mid cap, since that would be diversified and would fit in high risk high return category.
3. Out of 4 large cap funds, remove SBI and one other, and add it to the two left. If you buy 4 large cap funds, you are basically buying the index.

 

[nikrod]

Totally agree with the above. You need to tell when is the requirement for the money.

1. If the requirement is far off , say 5 or more years, I'll ask you to invest in a mid cap fund with 2000 since you have mostly large caps.
2. remove ICICI infra and Rel Power and replace with a mid cap, since that would be diversified and would fit in high risk high return category.
3. Out of 4 large cap funds, remove SBI and one other, and add it to the two left. If you buy 4 large cap funds, you are basically buying the index.

I agree with simple_trader and nikhilfake.

Reduce number of funds to 4-5 and shun the sector funds. Also balance the Mid Cap - Large Cap funds in portfolio. You can also remove HDFC Prudence if you have enough debt exposure in form of FD's, insurance or PPF / NSC. HDFC Prudence is a balanced fund and invests around 65% in equity & rest in debt.

 

[hamir]

Thanks members ...I got some good suggestions.

Which two large caps I should choose out of four that I have?

Also .. is Birla mid cap-growth good replacement for my sectoral funds?

I have HDFC prudence as it has a proven track record and it's returns are equal or more then diversified funds..am I correct here?

 

[nikrod]

Thanks members ...I got some good suggestions.

Which two large caps I should choose out of four that I have?

Also .. is Birla mid cap-growth good replacement for my sectoral funds?

I have HDFC prudence as it has a proven track record and it's returns are equal or more then diversified funds..am I correct here?

The Equity portion of HDFC Prudens invests primarily in Mid Cap stocks. This fund is also aggresive in mandate.

Selecting two large cap funds is your choice. Make sure you also diversify accross fund houses i.e. choose funds from different fund houses.

In my opinion if you are keeping HDFC Prudence in portfolio, you need not add any more mid cap funds.