Too Many Mutual funds in Portfolio? Please help!

POSTED BY Bond Bhai ON December 3, 2012 2:19 pm COMMENTS (10)

Hi Guys,

  I have been investing in the following funds as a SIP for the past one year –

IDFC Premier Equity Fund – 2000

UTI Opportunities Fund – 5000

ICICI Prudential Focused Bluechip Equity Fund – 3000

DSP BlackRock Top 100 Equity Fund – 3000

SBI Emerging Businesses Fund – 1000

HDFC Top 200 – 2000

Templeton India Equity Income Fund – 4000

It would seem there are too many funds! Can you suggest how the portfolio is? Any thing i need to change? Please guys, desparately need help!

10 replies on this article “Too Many Mutual funds in Portfolio? Please help!”

  1. Dear Francis, both are useless. Why/ Please read past discussions for these policies.

    thanks

    Ashal

  2. Francis Fernandes says:

    Need to know which is a good plan HDFC SL Crest with highest NAV or ICICI Prudential Guaranteed Insurance Savings plan.

  3. TheZionView says:

    What you are saying just similar to statement like this

    I have bought 50 shares already i don’t want to sell them and keep it under 10-15 stock to manage better rather i will hold on to it even though i cant monitor all of them let the luck help.

    Even if you already have 7-8 funds you can still reduce it to 2-3 i am not saying to do it right away but that should be the path ahead.

  4. Vikas Vyas says:

    Wow, Each expert speaking their minds and the interesting part despite contradictory views, everyone seems to be right.

    For beginners, possibly this is right kind of debate to enter to the world of Investments. However, it still does not answer the core query? 3 -4 funds are good enough or 7-8 funds essential if one is looking for long term.

    2 contradictory insights :

    a) KISS theory.. few funds, enough diversification, no big headache in managing them

    b) Bit more funds to form a Index fund to beat inflation and more importantly not to keep everything in one basket.

    Thanks

    Vikas

  5. Dear Zionview, if I had to do it all over again I would it as you have suggested. The only peril of overdiversification is your portfolio would resemble an index fund. Not such a bad thing,That is enough to beat inflation in the long run. Which is the only purpose of investing in my view,

    Personally while the sensex lost -25% last year my folio fell only -6%.There is still fund manager diversification which no study can account for.

    All said what you have said is good advice especially to a beginner.

  6. TheZionView says:

    I have to dis agree with most of replies here

    Its always better to follow KISS (keep it simple silly)

    Hence what 3 funds cannot do to your return doesn’t change with 7-8 funds

    Mutual Fund unlike stock is collection of many business which means there is enough diversification in it already. So you trying to over diversify with MF is useless

    1 fund can do the trick but we are not that much risk taker,so make it 3

    1 Large cap(all large cap related diversification is covered)
    1 Multi cap( free hand to fund manager to diversify for the best/worst depends on fund u select)
    1 Mid andSmall cap

    This is enough and its simple

  7. BanyanFA says:

    Hi,
    As suggested by others on the board, I would not suggest you to reduce your SIPs for the sake of reducing it. It is a good idea to have a reasonable split into multiple funds, however it should be based upon the fund type and not fund performance. For example, in case of an aggressive investor (long term investment – 10 year horizon), a cut could be in :
    1. Large Cap – 20% – I would go for 2 funds
    2. Mid Cap – 50% – I would split into 2-3
    3. Small cap – 10% – One fund
    4. Gold – 10% – One Fund
    5. Sector – 10% (for a sector spin – or add it to the midCap) – One fund

    For exampl, the above combination may land you with 7-8 funds. Again, you may argue that why not just one Equity Diversified fund instead of 7-8 – well it is all upto the mindset you may have. I don’t want to put all eggs in just one fund.

  8. Good advice by both Bharat Shah and Ramesh. I have too many funds if you count the number. But each group of funds is earmarked for specific goals and within each group you will have a core (large cap) and satellite (mid-small -caps) funds.

    Many disagree with this approach but so far it has worked for me.

  9. Ramesh says:

    Start with this.
    What is the reason behind each fund? or What is each fund doing in your portfolio?

    then we can proceed.

  10. bharat shah says:

    i advise refrain from reducing mfs for only sake of reducing nos. of mf, as the mfs seems reasonably good , no.is not that large , and 1 yr period is too short to decide. at the most , you can stop SIP in any/some funds falling short of your yard stick in ref. with the bench mark or relevant peers’ group. you should watch the performance over a period of at least one market cycle before deciding.

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