members your suggestions...pls

[svmch]

Hello members,
iam new to MF investments.Just started SIP in following funds. MY TIME HORIZON OF INVESTMENT WOULD BE ATLEAST 5-10 YEARS.

large cap :
1.DSPBR TOP 200 (G)= Rs.2000
2.Hdfc top 200 (G)= Rs.1000

Multicap :
3.Reliance RSF equity : Rs.1500

??mid-small cap:
4.BSL dividend yield plus (G) =Rs.1500
5.ICICI discovery (G) = Rs.1000

my queries ....
A. I want to invest Rs.3000 (1500 + 1500 )through SIP in one or two MORE funds
B. my shortlisted funds are Reliance growth,sundaram selct midcap, sundaram S.M.I.L.E ,BSL frontline Equity plan A,HDFC PRUDENCE ,magnum contra,BSL midcap ( any two pls)
C.Iam confused whether to increase the SIP amount in my existing funds or to start a new SIP on any two of the shortlisted funds
D. ARE THERE ANY CHARGES FOR A SWITCH AFTER 1 YEAR WITHIN THE SAME FUNDHOUSE.
.pls help me to have allocation of 70:30 (large: mid )






c.

 

[yodlee99]

You already have 7K in SIP spread across as many as 5 funds and you want to add 3K more every month. Here is what I would I do. I would increase my exposure to my existing funds. Too many funds means too much time spent in tracking each one of them. How much to distribute ? You already have 2500Rs in mid&smallcap from BSL dividend, ICICI discovery and some more from the RSF multicap taking total mid&smallcap contribution to ~ 3000Rs. In order to follow your 70:30 in large:mid&small cap distribution, I would not increase my exposure to mid&small cap (unless you have a very strong reason to). Remember, if markets were to crash as it did in 2008, it would take mid&small caps with it all the way down.
I would, increase exposure to HDFC Top 200 and DSPBR top 100 in some way, maybe, make them both 3K. Invest for long and keep increasing your SIP every year mainly in diversified large cap mutual funds. Good luck

 

[nikrod]

You already have 7K in SIP spread across as many as 5 funds and you want to add 3K more every month. Here is what I would I do. I would increase my exposure to my existing funds. Too many funds means too much time spent in tracking each one of them. How much to distribute ? You already have 2500Rs in mid&smallcap from BSL dividend, ICICI discovery and some more from the RSF multicap taking total mid&smallcap contribution to ~ 3000Rs. In order to follow your 70:30 in large:mid&small cap distribution, I would not increase my exposure to mid&small cap (unless you have a very strong reason to). Remember, if markets were to crash as it did in 2008, it would take mid&small caps with it all the way down.
I would, increase exposure to HDFC Top 200 and DSPBR top 100 in some way, maybe, make them both 3K. Invest for long and keep increasing your SIP every year mainly in diversified large cap mutual funds. Good luck

Agree with yodlee99. you already have 5 good funds in portfolio. Stick with it and increase allocation to existing funds rather than adding new ones.

 

[smrtnvstr]

i agree with above...having too many funds in a portfolio your portfolio becomes like a big index fund where returns may not be very handsome.

 

[nikrod]

i agree with above...having too many funds in a portfolio your portfolio becomes like a big index fund where returns may not be very handsome.

Good point. though MF's provide benefits of diversification, portfolio concentration is also one of the keys that can reap rich returns. Researchers have stated that benefits of diversification are little when number of stocks in your portfolio crosses 20.

I would give an example of benefit of concentration. Let's assume two funds. Fund A contains 20 stocks & fund B 50 stocks with equal weight. So each stock in Fund A has 5% weight & in Fund B it is 2%. Now if one of the common stock turns out to be a ten-bagger (appreciates 10 times), Fund A's return would be 50% while it will be 20% for Fund B. The moral of the story is you should not have over concentrated or over diiversified portfolio. Keep it balanced.