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Mutual Fund Corner. Q: 33-year-old Sumedh Ganu writes us from Mumbai. I am living with my 30-year-old wife in Mumbai. Our aim is to generate wealth and have an aggressive risk appetite. We have accumulated a corpus of Rs 30 lakh in equity mutual funds as of now. Generally, mutual fund experts recommend investing in a maximum of four funds in a portfolio. But, considering the following points, we have chosen to invest in eight different mutual fund schemes: What if all four selected funds start performing badly? So, we have selected a couple of good funds in each category to diversify performance risk. We have checked the portfolio overlap of all schemes against each other. Overall portfolio overlap is only 15-25 percent. Current SIP amount is Rs 1.6 lakh per month which is a large investment per month. We have selected one large, two large and mid, two multi and three small-cap funds. All mutual fund schemes are selected from different mutual fund houses. We both together have monthly SIP investments in following direct mutual fund plans: SBI Blue Chip (Large): Rs 25,000 per month. Mirae Asset Emerging Blue Chip (Large & Mid): Rs 20,000 per month. Principal Emerging Blue Chip (Large & Mid): Rs 15,000 per month. ABSL Equity (Multi): Rs 5,000 per month. Motilal Oswal Multicap 35 (Multi): Rs 15,000 per month. L&T Emerging Blue Chip (Small): Rs 40,000 per month. Reliance Small Cap (Small): Rs 30,000 per month. Franklin India Smaller Cos (Small): Rs 10,000 per month. Please, advice regarding our overall portfolio construct and schemes selection within each category. We have Rs 3 lakh corpus in DSPBR Small Cap Fund. This fund is not performing well since the last 1-2 years. We have stopped SIP and would like to switch to DSPBR Mid Cap Fund as it is a decent performing fund and we want to add pure mid-cap exposure to our portfolio. This would be the ninth different scheme in our portfolio.
We want to start new SIPs of Rs 40,000 per month. Please suggest in which schemes should we start new SIPs. How much corpus can we accumulate with SIP of Rs 2 lakh/month starting with Rs 30 lakh corpus in 25 years? How much additional corpus can we accumulate if we increase SIP amount by 10 percent every year?
Fund Morningstar Category Morningstar Rating Overall 1 year 3 years 5 years SBI Bluechip Large-Cap ÙÙÙÙ -4.00 10.27 16.00 Canara Robeco Emerging Equities Large & Mid-Cap ÙÙÙÙÙ -5.38 16.17 26.63 Mirae Asset Emerging Bluechip Large & Mid-Cap ÙÙÙÙÙ -0.87 19.13 26.86 Aditya BSL Equity Multi-Cap ÙÙÙÙ -5.01 15.01 19.11 Motilal Oswal Multicap 35 Multi-Cap ÙÙÙÙ -7.74 14.61 NA Franklin India Smaller Companies Small-Cap ÙÙÙÙ -15.78 10.77 21.91 L&T Emerging Business Small-Cap ÙÙÙÙ -15.00 17.49 NA Reliance Small Cap Small-Cap ÙÙÙÙ -17.05 15.16 26.04 DSP Small Cap Reg Gr Small-Cap ÙÙÙÙ -22.70 8.53 23.32
The funds at your portfolio are good, despite your long term horizon, its overallocated towards small and mid caps. We recommend adding some large and multi-cap funds.Here are some options:
Fund Morningstar Category Morningstar Rating Overall 1 year 3 years 5 years Aditya BSL Frontline Equity Large-Cap ÙÙÙÙ -3.69 12.12 15.37 HDFC Top 100 Large-Cap ÙÙÙÙ -0.72 16.57 15.79 ICICI Pru Bluechip Large-Cap ÙÙÙÙ -2.17 13.84 15.27 Franklin India Equity Multi-Cap ÙÙÙÙ -4.77 10.69 16.95 Kotak Standard Multicap Multi-Cap ÙÙÙÙ 0.18 15.63 19.60 Mirae Asset India Equity Multi-Cap ÙÙÙÙÙ 0.93 17.25 19.49 Projected Portfolios Values (Rs Crore)
Equity Return Maintain SIP Increase SIP by 10% 10% 26.5 62 12% 36.5 78.5 Click here to watch the full episode of Mutual Fund Corner
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