MF portfolio assessment

#1
Hello experts:

Request a minute of your time to provide me your assessment of my MF portfolio. Investment outlook is long term.
BSL95 8%
BSL Frtl Eq 3%
DSP Bal 4%
DSP Equity 11%
HDFC Equity 11%
HDFC Prdnce 14%
HDFC Top 200 8%
ICICI Dyn 6%
ICICI Infra 4%
Rel Growth 17%
Sund Select Mid 14%

Thanks.
 

yodlee99

Active Member
#2
You have some good and consistent funds. As such there should be no worry as you are a long term investor. I assume that you are investing via SIP on different dates of the month.
Typically, we suggest have 5-6 funds. However, if you are ok with managing more funds, that would be fine as well.
Minor corrections... Reliance growth's assets under management (AUM) is getting big and you can either switch into Reliance Equity Opportunities or IDFC Premier Equity-A. This IDFC fund has been very consistent top-charter for many years now.
You can switch DSPBR Balanced into DSPBR Equity.
You got 3 funds under HDFC and seem to like it more.. these are good ones. I would rather consolidate HDFC Equity into HDFC Prudence and Top 200.
Regd ICICI Infra, this has same issues that dodge other infrastructure funds... hold onto it. This should turn around as the government is increasing infra investments.
 
#3
My observation is not on the funds you have investment in but in the number of funds themselves. In my opinion 11 funds is a bit too much.

When you invest in too many funds, you are potentially over-diversifying. For example, your 11 funds could have some common stocks. (As a learning exercise visit all your fund websites and compile a list of top 50 stocks they hold and find out which are common among your funds and their percentage relative to the size of the fund).

Whats the downside of multiple funds holding the same stock? You make less money in the long run that you should because you are paying annual expenses to different fund managers who end up buying the same or similar stocks.

There are two other disadvantages. Investing in too many funds defeats the purpose of lowering your risk of stock investment. The spread is far too much to meaningfully track.

Bottom line: examine your fund investments carefully. If the overlap of stocks is large then consider trimming your portfolio. If the common stock is not too many then you are well positioned.

lonsharim
 

yodlee99

Active Member
#4
Having too many funds, might reduce the returns of funds to what one would get from investing from passive index funds (that mimicks the sensex/NIFTY). In this case, you got 6 out of 11 funds with <=8% of share in your portfolio. Any huge returns from any of these 6 funds will hardly have any impact on your portfolio. Hence, we suggest having 5-6 well managed & diversified funds with each contributing to atleast 10-20% in your portfolio. There is inherently nothing wrong in having more funds, except your returns will be as low as a passive index fund.
 
#5
hi yodlee..
i read couple of your recent posts ...u have said that Reliance growth fund has very large AUM....and u have suggested to switch to other funds....can u please explain a little how does it effect the returns....cheers

You have some good and consistent funds. As such there should be no worry as you are a long term investor. I assume that you are investing via SIP on different dates of the month.
Typically, we suggest have 5-6 funds. However, if you are ok with managing more funds, that would be fine as well.
Minor corrections... Reliance growth's assets under management (AUM) is getting big and you can either switch into Reliance Equity Opportunities or IDFC Premier Equity-A. This IDFC fund has been very consistent top-charter for many years now.
You can switch DSPBR Balanced into DSPBR Equity.
You got 3 funds under HDFC and seem to like it more.. these are good ones. I would rather consolidate HDFC Equity into HDFC Prudence and Top 200.
Regd ICICI Infra, this has same issues that dodge other infrastructure funds... hold onto it. This should turn around as the government is increasing infra investments.
 
#6
Hello experts:

Request a minute of your time to provide me your assessment of my MF portfolio. Investment outlook is long term.
BSL95 8%
BSL Frtl Eq 3%
DSP Bal 4%
DSP Equity 11%
HDFC Equity 11%
HDFC Prdnce 14%
HDFC Top 200 8%
ICICI Dyn 6%
ICICI Infra 4%
Rel Growth 17%
Sund Select Mid 14%

Thanks.
u can add magnam magnam multiplierplus as well in sip mode
 

yodlee99

Active Member
#7
One can increase the investments in large cap stocks to a high extent. For eg., even though the AUM is pretty high for HDFC Top 200, it won't affect the performance. However, for small&mid cap funds, managing too much funds might become an issue. The fund manager cannot invest beyond a limit in mid & small companies for many reasons. In such scenarios, the earnings may not grow as much as it used to, when the AUM was lower and easier for the fund manager to handle. This may or may not happen for any one fund in particular, or may not be an issue when you are trying to sell... but there is a possibility.

hi yodlee..
i read couple of your recent posts ...u have said that Reliance growth fund has very large AUM....and u have suggested to switch to other funds....can u please explain a little how does it effect the returns....cheers
 

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