Please help! Review Portfolio

[life2007]

Hello Friends!

Please help me to trim my portfolio to just 4 to 5 funds max if you can. I have below funds in my portfolio as of now.

All funds looks good to me but I do not understand deep insights of over diversification, over lapping etc, so please help me!!

I also like Quantum Long Term Equity but not sure which fund to replace.

SIP
1) HDFC Prudence - Balanced Hybrid
2) HDFC Top 200 - Large and Mid Cap
3) DSP TOP 100 - Large Cap
5) Reliance Regular Saving Equity - Multi Cap
6) ICICI Pru Discovery - Small & Mid Cap

No new purchases: on 'HOLD'
7) SUNDARAM Tax Saver
8) IDFC Sterling Small & Mid Cap
9) Fidelity Tax Advantage
10) Reliance MIP
11) HDFC MIP
12) DSP Equity

Thanks in advance

Regards,
Jeet

 

[life2007]

Hmmm, Seems i don't have good flair for writing or raising queries. Most of other people get responses for review of portfolio, I havent got any despite 62 views

Hope I get one soon.

Thanks

 

[asterix24]

Well, I hope this reply is not late for you. Your SIP portfolio seems to be the best of lot. There is one point though. HDFC Prudence and HDFC Top 200 are known to have very similar portfolios and similar strategies.

If you wish to stick to Balanced, do consider Birla Sunlife 95. Else, if you are willing, consider a switch to Franklin India Bluechip fund.

Happy Investing !!

 

[life2007]

Hi

Thank you so much!

I have read very good reviews of HDFC Prudence and I would prefer to be in my core portfolio. This fund though hybrid has possibly the right mix of aggression and security in the long term. As I am looking for long term 10+ years, I was thinking to continue SIP in it.

As suggested by you, I will replace HDFC Top 200 to Quantum Long Term Equity which is Large and Mid Cap.

So the final outlook will be :

1) DSP BlackRock Top 100 [Large Cap]
2) HDFC Prudence [Hybrid - Balance]
3) Quantum Long Term Equity [Large & Mid Cap]
4) Reliance Regular Saving Equity [ Mid Cap]
5) ICICI Pru Discovery [Mid & Small Cap]

Does this look better please?

Thanks again

Jeet

Well, I hope this reply is not late for you. Your SIP portfolio seems to be the best of lot. There is one point though. HDFC Prudence and HDFC Top 200 are known to have very similar portfolios and similar strategies.

If you wish to stick to Balanced, do consider Birla Sunlife 95. Else, if you are willing, consider a switch to Franklin India Bluechip fund.

Happy Investing !!

 

[comm4300]

1) [Large Cap]
2) [Hybrid - Balance]
3) [Large & Mid Cap]
4) [ Mid Cap]
5) [Mid & Small Cap]

just deleted the scheme names.....

do you see overlap? large, large cap, mid, mid, mid and small...why so much...just because they are 5 star schemes on some website?

remember, a fund can be a 5 star this quarter and then become 3/2 start the next year....

align schemes to your goals :

a) medium term goals - balanced fund e.g parking of funds + savings with equity exposure...
b) long term steady goal - equity fund e.g retirement...
c) very long term - small cap [risk appetite should be taken into consideration] . eg. a child's education

all the best.

 

[asterix24]

The final outlook of your portfolio is fine.

Happy Investing !!

 

[life2007]

Hi

Thank you for your insight. Interesting points to ponder!!

Two things based on your comments.

As of now, my goal is only capital appreciation for retirement. However, this could change as I do not have steady income. Either it may drain off or there may be surplus. What I am trying to do is to save as much as possible when I am getting some money and prepare for rainy days ahead.

Yes, ratings in Value research did influence my decision of investing in the below funds, you got it very right. I am aware no funds can take permanent position of 5 or 4 star rating. I think that is where periodical review of funds comes in picture. These below funds SIP will be only for this year. Next year, I will review and then decide. If any below fund has taken nose dive, then it is time to change to a better performing fund. That is the strategy and I picked this up by reading several articles in this forum and also in other forums.Correct me if i am wrong please!!

I had about 11 funds and have trimmed to 5 funds. I thought 5 funds are acceptable. My thought implies that while it is easier to manage few funds, but one should not concentrate large sums on one fund. For example, let us say I pick only two funds from below and in 3 years, each fund will have 3 lacs each (just argument cant think of that much money in 3 yrs). Now one of the fund has performed badly. Will it not be difficult to shift the entire corpus to another performing fund at one go. Somehow, banking on just 2 funds and putting entire weight behind these seems not be good idea. I thought that would be as bad as having many funds. Pls correct me if I am wrong on this.

While I got your point of aligning schemes, honestly I simply dont have goal than earning enough money and getting out of this vicious cycle of "earn and consume & earn". Havent had luck for all these years, but things have improved to great extent since last 2 years and I am trying to build a decent corpus and think more about earning passive income to meet my nominal expenses or in other words go with the concept of 'financial freedom'. Bit philosphical, but very scary to go back to old days, trying to break free, whether i succeed or not is altogether another question. :lol:

Last but not least, I want to keep it simple. Parking in liquid and then do systemic transfer and the go for buy and hold strategy, with exit loads, tax implications is just too much for me. Would like to invest in good performing funds and use my energy in creating opportunities in earning money :

Sorry if caused you headache by my long explanation:lol:

Thanks again for your valuable advise.

Jeet

1) [Large Cap]
2) [Hybrid - Balance]
3) [Large & Mid Cap]
4) [ Mid Cap]
5) [Mid & Small Cap]

just deleted the scheme names.....

do you see overlap? large, large cap, mid, mid, mid and small...why so much...just because they are 5 star schemes on some website?

remember, a fund can be a 5 star this quarter and then become 3/2 start the next year....

align schemes to your goals :

a) medium term goals - balanced fund e.g parking of funds + savings with equity exposure...
b) long term steady goal - equity fund e.g retirement...
c) very long term - small cap [risk appetite should be taken into consideration] . eg. a child's education

all the best.

 

[comm4300]

Hi

Thank you for your insight. Interesting points to ponder!!

Two things based on your comments.

As of now, my goal is only capital appreciation for retirement. However, this could change as I do not have steady income. Either it may drain off or there may be surplus. What I am trying to do is to save as much as possible when I am getting some money and prepare for rainy days ahead.

Yes, ratings in Value research did influence my decision of investing in the below funds, you got it very right. I am aware no funds can take permanent position of 5 or 4 star rating. I think that is where periodical review of funds comes in picture. These below funds SIP will be only for this year. Next year, I will review and then decide. If any below fund has taken nose dive, then it is time to change to a better performing fund. That is the strategy and I picked this up by reading several articles in this forum and also in other forums.Correct me if i am wrong please!!

I had about 11 funds and have trimmed to 5 funds. I thought 5 funds are acceptable. My thought implies that while it is easier to manage few funds, but one should not concentrate large sums on one fund. For example, let us say I pick only two funds from below and in 3 years, each fund will have 3 lacs each (just argument cant think of that much money in 3 yrs). Now one of the fund has performed badly. Will it not be difficult to shift the entire corpus to another performing fund at one go. Somehow, banking on just 2 funds and putting entire weight behind these seems not be good idea. I thought that would be as bad as having many funds. Pls correct me if I am wrong on this.

While I got your point of aligning schemes, honestly I simply dont have goal than earning enough money and getting out of this vicious cycle of "earn and consume & earn". Havent had luck for all these years, but things have improved to great extent since last 2 years and I am trying to build a decent corpus and think more about earning passive income to meet my nominal expenses or in other words go with the concept of 'financial freedom'. Bit philosphical, but very scary to go back to old days, trying to break free, whether i succeed or not is altogether another question. :lol:

Last but not least, I want to keep it simple. Parking in liquid and then do systemic transfer and the go for buy and hold strategy, with exit loads, tax implications is just too much for me. Would like to invest in good performing funds and use my energy in creating opportunities in earning money :

Sorry if caused you headache by my long explanation:lol:

Thanks again for your valuable advise.

Jeet

thanks for your detailed reply Jeet.

You seems someone who does his homework before investing. If that be the case why not switch to stocks?

After all you are taking the longer route towards stock market by investing in MFs...

About the star rated funds, as we all know, ratings do not matter at all. remember 2008 sub-prime crisis [lehman brother's collapse] - as if the whole world was going to collapse? these star rated funds and all others are still recovering....SIP did not help then too....

And you seem to churn your investment each year...after review. I hope your "friendly" MF financial advisor is not prompting you to do this...!

Your goal/strategy is simple; park in liquid fund and then invest.

For someone who has time to do his homework i'd suggest getting into nifty. Buy and hold strategy:Why?

$ Stocks will outperform funds.
$ costs of brokerage is almost the same as cost involved in MF [thanks to online brokers - Zerodha]
$ You get into good quality stocks when they are available cheap [near support levels] and hold it for long term. You cannot time mutual fund purchase except SIP.
$ You stand to gain dividend/stock split/bonus etc
$ your purchase will not overlap : like in mf schemes where 2 or more equity oriented schemes may have exposure to the same stock....
$ you can sit on cash and wait for the appropriate time to enter markets. It is difficult to predict short term movement; however when one looks at daily charts of a good quality stock, it is easy to figure a good entry point. Even if you are wrong at entry, you can always buy more the next month because you are investing in the fundamentally good stock.
$ Quality stocks [nifty 50] have to rise if the country has to grow : This being the basis of our thought process, there is very little at stake if stock purchase is preferred for the long term.
$ also include GOLDBEES and NFITYBEES to nifty 50. Monitor 52 stocks [2ETFs] at end of each day/weekend. Divide your cash equally to get investable amount. Wait for the right time and buy the stock. The stock goes down even further : look for the next support and enter again. This is not SIP, but a smarter way to get into stock for Long term [repeat long term]. do not try this with mid-small cap stocks.
$ By the time you retire, your stock would've multiplied. You could start using option strategies like covered call strategy to earn monthly income....but that is for later...by then our exchanges would have evolved to a better level than the primitive level now.....

give it some thought.

all the best.

PS : having said all about stocks; if you still feel comfortable with Mutual Funds, by all means continue with your current style. Savings in any form is good.

 

[life2007]

Hi

Thank you so much for your detailed analysis.

I do not have any knowledge about stocks or how they work in general. That is why I am trying to be dependent on MF managers who possibly know better composition of portfollio or when to enter/exit etc.

Having said that, I would not rule out studying this and invest in stocks in future. I need to have some basic comfort level rather than picking AAA stocks and invest blindly. Thanks to forums like this, I believe I got something about MFs in my head. Once I know I am getting more surplus amount, I will focus on Stocks.

I have taken print out of your below message, which will be definitely helpful when I take the call.

Right now, I am further studying about asset allocation and trying to invest in comfort zone and spread my investment across familiar types like MFs, Gold, Real Estate, FDs, PPF. I dont want to end up being too brainy and invest One Rupee in each of them and say I have spread my investment in all class:lol:. I would prefer to fill some decent amount in the above before I go to the next level ie Stocks, or Art etc.

I also think I messed up with my explanation in one paragraph above. What I meant is I do not understand nor want to waste my time in understanding various tax implications by investing in different funds like Gilt, Debt, etc. The STCG and LTCG is all complex out there. Hence I prefer to invest in diversified Equity MFs which has simple rule, stay invested for one year and forgot about tax. Since Hybrid funds have same rule, I have invested in HDFC Prudence as my core portfolio as it takes care of paritial debt without having to break my head in about the above policies.

As of now I do not have MF advisor as I do not think I have a big corpus to afford one. However as a learning curve, I did make investments in many funds before I realized and now trimming to about 5 funds which I said I will keep reviewing yearly. The idea is simple, each December, I thought of reviewing the funds I have invested (I do not understand big terms like absolute returns, CAGR, IRR blah blah as yet.. trying to learn though). Hence, I have to depend on advise of wise persons like you coupled with various websites indicating ratings and yes common sense (i think i have plenty of it:clap.

One think I never understand is people boasting this fund has given X% returns and going gaga gaga over it. I can understand there will be cheers if one is going to redeem it with that X% returns, but if one were to stay invested, I dont think it makes any difference. To cite with an example, let us say I put 100 rs in A fund after 3 years the price shot up to 200 rs. It looks rosy. Now if i withdraw, I should be very happy of doubled my investment in 3 years, but if I am long term investor say for 10 years, it does not make any sense to be happy or sad. What matters I believe what amount I am going to get at the end of 10 years.. again it is a musical chair type situation, within these 10 years, market would have played the snake and ladder game many times.. when you want to withdraw or rather require money, you need to see if the market is climbing the ladder or sliding down on a snake . Ofcourse, I am now aware of STP and starting to withdraw couple of years before actual requirement, but my point is why people boast their funds doing very well when they are not sure what lies in future ahead.

Thanks

Jeet

thanks for your detailed reply Jeet.

You seems someone who does his homework before investing. If that be the case why not switch to stocks?

After all you are taking the longer route towards stock market by investing in MFs...

About the star rated funds, as we all know, ratings do not matter at all. remember 2008 sub-prime crisis [lehman brother's collapse] - as if the whole world was going to collapse? these star rated funds and all others are still recovering....SIP did not help then too....

And you seem to churn your investment each year...after review. I hope your "friendly" MF financial advisor is not prompting you to do this...!

Your goal/strategy is simple; park in liquid fund and then invest.

For someone who has time to do his homework i'd suggest getting into nifty. Buy and hold strategy:Why?

$ Stocks will outperform funds.
$ costs of brokerage is almost the same as cost involved in MF [thanks to online brokers - Zerodha]
$ You get into good quality stocks when they are available cheap [near support levels] and hold it for long term. You cannot time mutual fund purchase except SIP.
$ You stand to gain dividend/stock split/bonus etc
$ your purchase will not overlap : like in mf schemes where 2 or more equity oriented schemes may have exposure to the same stock....
$ you can sit on cash and wait for the appropriate time to enter markets. It is difficult to predict short term movement; however when one looks at daily charts of a good quality stock, it is easy to figure a good entry point. Even if you are wrong at entry, you can always buy more the next month because you are investing in the fundamentally good stock.
$ Quality stocks [nifty 50] have to rise if the country has to grow : This being the basis of our thought process, there is very little at stake if stock purchase is preferred for the long term.
$ also include GOLDBEES and NFITYBEES to nifty 50. Monitor 52 stocks [2ETFs] at end of each day/weekend. Divide your cash equally to get investable amount. Wait for the right time and buy the stock. The stock goes down even further : look for the next support and enter again. This is not SIP, but a smarter way to get into stock for Long term [repeat long term]. do not try this with mid-small cap stocks.
$ By the time you retire, your stock would've multiplied. You could start using option strategies like covered call strategy to earn monthly income....but that is for later...by then our exchanges would have evolved to a better level than the primitive level now.....

give it some thought.

all the best.

PS : having said all about stocks; if you still feel comfortable with Mutual Funds, by all means continue with your current style. Savings in any form is good.

 

[comm4300]

good job jeet. you are on the right track.

keeping it simple. agree about being tension free wrt tax implications on mf after 1 year. totally agree about the choice of HDFC prudence.

5 funds should be good enough to monitor and manage.

one variation you can try is to continue SIP and add some more when you think the overall market has reached good valuations. Also start to take a look at index funds [not ETF but index mutual fund - nify, gold etc].

do continue your study of the markets as it will help you in the long term.

all the best.