MF Portfolio Improvement

POSTED BY Nishant Sahay ON April 4, 2013 10:26 am COMMENTS (8)

My current portfolio consists of the following funds:

1) Sundaram Select Focus   2) Sundaram SMILE Fund  3) SBI Magnum Taxgain  4) DSPBR Taxsaver  5) Kotak 50  6) HDFC Taxsaver  7) HDFC Top 200  8) HDFC Prudence  9) Quantum Long Term Equity

The portfolio has been built over a period of more than 5 years. I am planning to prune down the portfolio to the following;

1) Quantum Long Term Equity  2) HDFC Balanced  3) ICICI Dynamic Discovery 

 

Comments and suggestions welcome.

 

8 replies on this article “MF Portfolio Improvement”

  1. Dear Nishant, the investment in PF & PPF & FDs are not classified for debt part of your portfolio? If yes, where is the need of a balanced fund’s debt part? Are you getting me clearly with dear Ramesh’s reply?

    Thanks

    Ashal

  2. Dear Nishant, Are you investing in PF or PPF or FDs…..?

    Thanks

    Ashal

    1. Nishant Sahay says:

      Yes, I am investing in PF as well as in FDs.

      The PF amount is being deducted from my salary every month. Other than that, I have an FD investment.

  3. Ramesh says:

    Put down a why for each one here.
    That will help you later, in case you get confused about adding more or removing these.

    1. Nishant Sahay says:

      As per your suggestion:

      Why planning to prune down the portfolio : too many funds to track, lack of knowledge while investing

      Why Quantum Long Term Equity : Low expense ratio, value investment principle, good track record, investment in large cap stocks.

      Why HDFC Balanced : Comparatively better than HDFC Prudence, need a balanced fund in the portfolio

      Why ICICI Dynamic Discovery : Investment in mid and small caps, good performance, comparatively better than IDFC Premier Equity fund.

      PS: all the investments were and will be made in the SIP mode.

      Objective : Long term investment growth over a horizon of more than 15 years.

      1. Ramesh says:

        Ok, some more questions to ponder:

        1. Quantum Long term equity is a Multi-cap equity fund by mandate. In the past, it had some mid and small caps in the past. But since last 2-3 years, they have predominantly gradually shifted to large caps. So, consider that thing in mind. In the future, they can change their portfolio according to market situation. Keep this in mind.
        2. Why should you Need a Balanced fund in the portfolio? I do not find any reason for that, if you have allocated your assets in equity and debt properly, a balanced fund just causes complications. You need to understand that overall portfolio return is more important than an individual instrument/fund/stock, etc.
        3. Yes, good performance but over what period? The new manager does not have a long term record in this (only 2 years approx. in this fund). So do not consider the performance before 2 years in calculations of fund’s performance (thats the way I see it. Others do not). You take the call. Comparatively, IDFC Premier equity is still managed by the same guy since inception, and its management characteristics are unchanged.

        SIP mode is good, if you have regular income.
        But consider shifting money lumpsum from your older funds to the new funds and do not go through multiple hoops of shifting to a debt fund and then STP.

        15 years!!! Just remember that it is more than 10 years!

        1. Nishant Sahay says:

          Thanks for your answer Ramesh.

          I have done some research on QLTE allocation and am ok with that.

          I will double check what you said about ICICI Discovery Fund. Thanks for the information.

          Having a balanced fund in the portfolio is my approach of safegaurding the portfolio, since I will already be investing in Large, Mid and Small Caps. Moreover, the fund has performed consistently and given decent returns. Any alternative fund for its replacement?

          1. Ramesh says:

            By adding a balanced fund, the portfolio will not be get safeguarded, if you understand what I mean.

            It does so, based on combined returns of all of the instruments, and not one instrument alone.

            Do one thing, go back say 6 years and put your money in your said instruments and track it every year (you can get NAVs for any working day).
            Find out, if there will be a “major” difference if you use a Balanced fund, and if you do not. Think more about and then take a decision.

            My intuitive thought is you will not get any significant change if you add a balanced fund. But yeah, do check it yourself.

            My suggestion was on the need of a Balanced fund, and not on HDFC Balanced.

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