What About This Portfolio?

POSTED BY Trishit Ray ON September 8, 2011 6:27 pm COMMENTS (16)

I have joined action month and now have a fundsindia a/c.After reading jagoinvestor and some other sites and fundcards I have decided to start SIPs of 10K for 10 years.I am now looking for a well diversified portfolio.I have selected these funds-

 

1)Large Cap:Frankline India Bluechip(G): Rs.3000/-

2)Large & Mid Cap: HDFC Top 200(G): Rs.3000/-

3)Small & Mid Cap: IDFC Small & Midcap Equity(SME)(G): Rs.2000/-

4)Multicap: DSPBR Equity(G): Rs.2000/-

 

1.I have entered this portfolio in moneysights with 16August as starting date as in August the market saw downfall and now it is recovering.When I clicked ‘get portfolio’ tab it shows my portfolio as very aggressive or I do not care for risk type.Did I really choose very risky funds?

2.I did not choose any balance funds.Previously I thought of investing 1K in HDFC Prudence and 1K in DSPBR Equity but decided against it as I already have one fund from HDFC.Shall I reconsider it?

3)Can anybody please tell me the difference of investment strategy of  IDFC Premier Equity and IDFC Small & Mid Cap(SME) fund?I know both are small & mid cap fund and have the same fund manager.Premier Equity is older but its expence ratio is 2.50 whereas Small & Mid cap has 2.06.Allthough Premier Equity’s 3yr returns are better.

Please have another look at my portfolio and advise.

Regards,

Trishit Ray

 

16 replies on this article “What About This Portfolio?”

  1. ashal jauhari says:

    Dear Trishit, Yes these are actual returns & not CAGR. From the data itself, you may notice the importance of fund manager & it’s role in protecting the downside.

    If a fund posts lower negative return than it’s benchmark & posts higher positive return, it’s worth of our money.

    In simple words, when the market is falling (bear phase), the fund is falling less & when the market is going up (Bull phase), it’s going more.

    Thanks

    Ashal

  2. ashal jauhari says:

    Dear Jig, Please do not look for any fund in isolation, look at it’s past history. Compare it’s performance in the year with the benchmark, it’s category. If for all 4 quarters it was slipping & slipping, you may opt to change but in case the performance is a mixed bag, you may decide to continue with the chosen fund.

    Thanks

    Ashal

    1. Trishit Ray says:

      Hello Ashal,

      I checked HDFC Top 200’s performance against its benchmark which is BSE 200 in moneysights.I share this here-

      Time HDFC Top 200 BSE 200(Benchmark)

      Last 3 months -9.97% -10.06%
      Last 6 months -7.73% -8.55%
      Last 1year -12.29% -15.56%
      Last 3year 47.58% 19.01%

      I think this is actual return not CAGR.Am I right?

      Both the fund and the benchmark are suffering for the last year but the fund shows lesser -ve return than the benchmark.It also has good track record and it seems the fund manager has a good reputation.I read its investment strategy and as far I understood it is a pretty good fund.Now if both the fund and the benchmark’s return remain negative ,say, for another year will it be wise to remain invested?

      Your answer might help me to review my portfolio better.

      Regards,

      Trishit

      1. Ramesh says:

        The job of the fund manager is to outperform its benchmark. If it falls less than its benchmark, and if it rises more than the benchmark, without compromising on its mandate, it has done its job.
        Your job is to find a well-performing fund which matches your aims.
        Thats all.

  3. Jig says:

    hello Ashal,
    many times i heard that we should review our portfolio atleast once in a year.
    Now if we take an example of HDFC 200. its last one year return is -10%( SIP) so what we need to look during review. What exactly the meaning by reviewing the portfolio?

    hope i will get reply. Seems Manish is very busy now a days by Action Month activity. Good luck to him..

    Thank

  4. ashal jauhari says:

    Dear Trishit Ray, No matter you are opting Prem. Eq. or S&M from IDFC family, ultimately the midcap bias ‘ll remain there in your portfolio. On the other hand, although DSP Eq. is a multicap fund, yet it is conservative in it’s approach. Hence For a longer term, you may continue with the changed portfolio.

    Please review, at least once in a year.

    Thanks

    Ashal

  5. ashal jauhari says:

    Dear Trishit, I’m answering the high risk awarded to your portfolio by Moneysights. Out of the 4 funds chosen by you, 3 funds – HDFC Top 200, IDFC S & M & DSP Eq. have varied exposure to midcap space. This tilt in midcap is showing you the risk awarded by moneysights.

    Just for sake of checking – replace HDFC Top 200 with HDFC Prudence in moneysights & post your fundings.

    Thanks

    Ashal

    1. Trishit Ray says:

      Dear Ashal,

      Thanks for your reply.I have gone to
      http://www.valueresearchonline.com/story/h2_storyView.asp?str=17513
      and decided to replace IDFC Small & Midcap(SME) fund with IDFC Premier Equity.Please have a look at my changed portfolio and tell me what do you think?

      Haven’t checked the moneysights risk ratings but I got your point.

      Regards,

      Trishit Ray

  6. Abhishek says:

    HI..

    Regarding the difference, below should be helpful :

    When Premier Equity was launched in September 2005, it was done as an equity diversified fund that could invest across the entire market capitalization spectrum. So it was not launched in the mid-cap space. It is just a diversified equity fund that has taken a mid-cap bias. In actuality, this fund has no market capitalization bias in its mandate. The fund is also benchmarked to the BSE 500. Small & Midcap Equity has a strong market cap directive- 65 per cent of the portfolio in mid caps and 15 per cent in small caps. Its benchmark is the CNX Midcap Index.

    I dont find your portfolio risky, maybe moneysights ppl can put light on it..

    happy investing !

    1. Trishit Ray says:

      Abhishek,

      Thanks for your fast reply.Can you throw some light on that IDFC Small & Mid Cap(SME) Fund’s investment strategy?And which fund has greater churning as churning increases the cost right?

      One more thing shall I stick with the no.3 fund or substitute it with Premier Equity?What do you think?

      I would like to hear what MANISH says as he selected Premier Equity in the Action Month Kit.

      Regards,

      Trishit Ray

      1. Trishit

        IDFC Primier is not “choose” for Action month .. its one of the good funds suggested in category of mid and small cap funds .. If your risk appetite is high , you can go for it , else not !

        Manish

        1. Trishit Ray says:

          Hello Manish,

          Thanks for your reply.IDFC Premier Equity was in the Action Month Kit and I just mentioned it.Hey no hurt feelings O.K?

          I have already started SIP today from fundsindia. Anyway what do you think about my changed portfolio considering the time horizon and goals?

          I tried to post a comment in the action month page today but the comment did not get updated.Anything wrong?Will try again later.

          Regards,

          Trishit

        2. Trishit Ray says:

          MANISH,

          STILL WAITING FOR YOUR REPLY.

          REGARDS,

          TRISHIT

  7. Trishit Ray says:

    Abhishek,

    Thanks for your reply.I asked about the difference between two IDFC small & mid cap funds because there must be a difference in the investment strategy,otherwise there should not be two funds.I did this on purpose.I think it helps to take a decision if you know about the fund.I did not select the no.3 fund with considerable knowledge.In the Action Month Kit MANISH has picked Premier Equity, so there must be a strong reason.

    As to risk I am not out and out risk taker and did never think that the portfolio was so but moneysights rates it so.Thats why I asked the question.

    I want to know,if I may, the insights of others.

    Regards,
    Trishit Ray

    1. Abhishek says:

      Considering your time horizon of 10 years, I dont find your portfolio risky..

  8. Abhishek says:

    You have the right funds..I would say this is an ideal portfolio for 10 years.. Go ahead and start investing.
    Dont Worry too much about Difference between funds, Riskiness and not having a balanced fund.. 10 years main u should get a super return on this portfolio..

    Abhishek

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