It is important to know the investment horizon, risk appetite and goals of an investor before suggesting an investment approach.
Having a diversified portfolio across categories, geographies and AMC is a good thing. It is also advisable to review your portfolio at least once a year.
I have invested in three mutual funds with SIP of ₹3000 each for the last 4-5 years. I am a long term investor. These are DSPBR Top 100 Equity, HDFC Top 200G and IDFC Premier Equity Growth. The ratings of the above three mutual fund schemes have come down recently. Should I continue to invest further through SIP mode in these funds, or should I stop investing and redeem? If I stop another SIP, in which mutual fund should I start my new SIP?
--- Name withheld on request
It is important to know the investment horizon, risk appetite and goals of an investor before suggesting an investment approach. Suppose one is investing for long term (more than 7-8 years) and has aggressive risk taking ability, in that case, one can think of building a portfolio around equity as it has better returns ability to give. If one is investing for the medium term (more than 3-4 years), he/she can consider investing a major portion of the portfolio in dynamic asset allocation in the hybrid category. As you have mentioned that you are a long term investor, we assume that your risk appetite is aggressive, and the investment objective is to create wealth over time.
As far as your current investments are concerned, it is purely equity-oriented, with a large-cap bias. We would suggest building a portfolio in equities in categories that maintain exposure across market capitalization. Hence, you can rebuild your portfolio and divide your total monthly investible amount equally among the following funds: HDFC Large & Mid Cap Fund, Kotak Multi Cap Fund and SBI Contra Fund. This way, your portfolio will be diversified across categories, geography and AMC. It is also advisable to review your portfolio at least once a year.
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