over-diversification???

K

kalyanvgopal

New Member
#1
#1
Hi All,

I have a very basic question. How do I assess over diversification in my portfolio.

=======================================================
Debt-Floating Rate ----------------------------------------- 22.03%
=======================================================
Reliance Floating Rate Fund (G): 22.03 %

=======================================================
Hybrid: ----------------------------------------- 16.56%
=======================================================
Fidelity Multi-Manager Cash Fund (G): 16.56%


=======================================================
Equity Diversified ----------------------------------------- 52.59%
=======================================================
DSP-ML India Tiger Fund - Regular Plan (G): 5.56%
Reliance Vision Fund (G): 5.52%
Sundaram BNP Paribas Select MidCap (G): 2.23%
Fidelity Equity Fund (G): 11.17%
ICICI Pru Infrastructure Fund (G): 3.51%
Reliance Growth Fund (G): 9.18%
SBI Magnum Global Fund (G): 15.42%
=======================================================


I have set up STP from Reliance Floating Rate Fund (G) to Reliance Growth Fund (G) and also Fidelity Multi-Manager Cash Fund (G) to Fidelity Equity Fund (G). I have started my MF investments around 2 months before. So, in future (3-6 months) my contributions to Debt and Hybrid funds will come down.
I have also recently applied for Franklin Templton High Growth Companies Fund (G).
So, now I am skeptical about being over diversified as one of my financial agents pointed about it.
Can any body give me some tips on calculating over-diversification in my portfolio? As a precautionary measure what kind of parameters I need to identify in a mutual fund for appropriate diversification. Are there any good portfolio managers assist me in calculating the same?

Thanks in advance
Regards
Kalyan
 
SavantGarde

SavantGarde

Well-Known Member
#2
#2
kalyanvgopal said:
Hi All,

I have a very basic question. How do I assess over diversification in my portfolio.

=======================================================
Debt-Floating Rate ----------------------------------------- 22.03%
=======================================================
Reliance Floating Rate Fund (G): 22.03 %

=======================================================
Hybrid: ----------------------------------------- 16.56%
=======================================================
Fidelity Multi-Manager Cash Fund (G): 16.56%


=======================================================
Equity Diversified ----------------------------------------- 52.59%
=======================================================
DSP-ML India Tiger Fund - Regular Plan (G): 5.56%
Reliance Vision Fund (G): 5.52%
Sundaram BNP Paribas Select MidCap (G): 2.23%
Fidelity Equity Fund (G): 11.17%
ICICI Pru Infrastructure Fund (G): 3.51%
Reliance Growth Fund (G): 9.18%
SBI Magnum Global Fund (G): 15.42%
=======================================================


I have set up STP from Reliance Floating Rate Fund (G) to Reliance Growth Fund (G) and also Fidelity Multi-Manager Cash Fund (G) to Fidelity Equity Fund (G). I have started my MF investments around 2 months before. So, in future (3-6 months) my contributions to Debt and Hybrid funds will come down.
I have also recently applied for Franklin Templton High Growth Companies Fund (G).
So, now I am skeptical about being over diversified as one of my financial agents pointed about it.
Can any body give me some tips on calculating over-diversification in my portfolio? As a precautionary measure what kind of parameters I need to identify in a mutual fund for appropriate diversification. Are there any good portfolio managers assist me in calculating the same?

Thanks in advance
Regards
Kalyan
Click to expand...
Kalyan,

Forget About Being Over-Diversified, It Seems Like You Are Basket Buying MFs, Treat The Chap To A Nice Dinner or Lunch Who Suggested You Are Over-Diversified, And Another Thing Treat MFs As Shares & Go For Them When The Market Corrects & NAV Is Down.

Happy & Safe Buying

SavantGarde
 
N

niranjan190

New Member
#3
#3
Hi Kalyan,
My small suggestion,
You have 7 diversified funds. some of them have the same objective.
May be you can reduce them to 3.

1. Midcap Category:
Sundaram Midcap, Reliance Growth, SBI Global are midcap oriented funds. I would prefer to club all to reliance growth, as it is the consistent performer for the last 10 years.

2.Infrastructure Sector:
DSP TIGER and ICICI Infra both are infrastructure funds. But DSP is stable and consistent. I would suggest to exit iciciinfra and put in DSP TIGER.
( personally I don't prefer infra sector as it is risky. you may look at DSP Opportunities which looks at opportunities in all sectors)

3. Large Cap:
Reliance Vision and Fidelity are large cap funds. Reliance vision has a good track record for the last 10 years. Fidelity is a new entrant but very promising. I would suggest to have Fidelity in this category..

Before taking any decision, consider short term tax implications.
 
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