Please help in trimming my portfolio!

[life2007]

Hi

Over the period of last 3 years, I have accumulated more funds consciously and want to trim it to only 4 to 5 funds. All of them are Growth Option funds. The MFs I have at the moment are:

1) DSP Blackrock Equity
2) DSP Blackrock Tiger
3) HDFC Prudence
4) HDFC Top 200
5) HDFC MIP Long Term Growth
6) Reliance Regular Savings Equity
7) Reliance MIP Growth
8) SBI Max Tax Gain
9) SBI Magnum Contra
10)Sundaram Tax Saver
11)Birla Tax Relief 96.

From the above, I am planning to redeem the following and transfer the amount to the rest of MFs I am planning to hold.

Birla Tax Relief 96 = 20K (early next year after 3 locks period)
Magnum Contra = 18K
DSP Black Rock Tiger = 14K

I am also toying to redeem gradually after 3 years lock in period next year SBI Max Tax gain and hold only one ELSS that is Sundaram Tax saver.

So out of 11 funds, less 4 that would be 7 funds. Both HDFC MIP and Reliance MIP I have just started recently with the aim of investing in debt oriented than FDs. So ideally, I think I will not consider among the other funds. That leaves me 5 funds.

1) DSP Blackrock Equity
2) HDFC Prudence
3) HDFC Top 200
4) Reliance Regular Savings Equity
5) Sundaram Tax Saver

Ok do you think I am thinking on right lines please. I plan to do these redemptions completely by middle next year and stick to only these 5 funds + 2 Debt MIP funds.

What are your comments, views on this please.. I do not understand much on overlapping or deep analysis part, but I have chosen these funds based on suggestions, reading various articles and yes some instincts..

Thanks

Jeet

 

[yodlee99]

Jeet, glad to see that you are taking the necessary portfolio adjustments which is very essential.
If you are in 20's or 30's, you donot need a lot of debt funds, just 1 fund is enough. You can take a pure debt fund (like Canara Robeco income fund or Fortis Flexi debt fund) or MIPs like the 2 in ur list. Remember, the returns from MIPs are sporadic and variable.

Regd the final 5 funds, its good to have 2 multicap funds (DSPBR equity & Rel RSF equity) that are flexible to move from large to mid cap as per market analysis by the fund manager. Though, HDFC Top200 & Prudence has given consistent returns, they are both managed by the same fund manager and its better to replace one with Birla SL Frontline equity-plan A or Fidelity equity. On second thoughts, you can even replace a MIP with a mid&small cap fund.

 

[life2007]

Hi

Thank your for your suggestions. I have been seeing in the forum that you are helping out to many people like me.. and they are not generic messages either,
as your response are introspective and calculated. I appreciate your kind selfless gesture.

Ok I am now nearing 40s.. Never had chance to know about Funds or anything related to Investment earlier as I barely had money to survive leave alone investments. Things have started improving from 2008 and now I am trying to compensate as much as I can for the lost time.

I opted for 2 MIPs because, I am thinking of first investing some reasonable amount in both of them now and if there is a major crash or stock starts sliding down in future, I wanted to systematically transfer to corresponding equity funds ie. HDFC MIP to HDFC Top 200 or Prudence and Reliance MIP to Reliance Savings Equity. In case the markets goes up, no worries, I felt let the funds be there in MIPs atleast it will fare better than traditional FDs..after tax treatment.. this is what I am thinking. If I can see through 1 year in these funds, I can withdraw any required amount in case of urgency or an event. From what I read, it would be flat 10% LT capital gain tax implications.
Pls advise if something is wrong here.. Also, liquidity factor is there..

Yes HDFC Top 200 and Prudence managed by same fund manager. I should have thought of it earlier but since I wanted one pure Large Cap fund, I preferred Top 200 and Prudence ofcourse has been consistent performer. I will change this later on after the current sweeping redemptions plans. I have enough of them to do early next year and then I will change either of these as per your advise.

Yes, I am conscious of that MIPs are sporadic and variable, wanted that something 'spicy' in the receipe [15-20% equity] to beat inflation. I thought instead of pure debt funds, let me stick to MIPs and they are in growth option, not looking for regular income at the moment. I wanted to seperate into 2 categories.. so I alway have the option of midcap -small cap tilt in other equity and leave these MIPs alone. In case I do need regular income, I will start SWP after one year and this also I learned from this very forum only.

Just worried about Sundaram Tax Saver, at present it is only 3 star rating in valueresearch suggests that it is not performing well. Hope it picks up.. I am banking on only one ELSS and after sudden decline of Magnum Tax gain, this is following too.. Then I have to start all over again to transfer a huge chunk to another ELSS.. anyways right now I am not thinking of it..

Regards

Jeet

Jeet, glad to see that you are taking the necessary portfolio adjustments which is very essential.
If you are in 20's or 30's, you donot need a lot of debt funds, just 1 fund is enough. You can take a pure debt fund (like Canara Robeco income fund or Fortis Flexi debt fund) or MIPs like the 2 in ur list. Remember, the returns from MIPs are sporadic and variable.

Regd the final 5 funds, its good to have 2 multicap funds (DSPBR equity & Rel RSF equity) that are flexible to move from large to mid cap as per market analysis by the fund manager. Though, HDFC Top200 & Prudence has given consistent returns, they are both managed by the same fund manager and its better to replace one with Birla SL Frontline equity-plan A or Fidelity equity. On second thoughts, you can even replace a MIP with a mid&small cap fund.

 

[yodlee99]

Good luck !

 

[life2007]

Thank you!

Your two words suggest only two possibilites.. You seem to agree my plan or atleast there is no major concern with it. Second possibility is probably you have thought 'enough is enough' of advising this stupid guy:clap: (just kidding!!)

Anyways, thank you so much for your advice..

Regards

Jeet

Good luck !