Portfolio review, Simplifying Mutual Fund (Equity based) portfolio.

Q & A Forum › Category: Mutual Funds › Portfolio review, Simplifying Mutual Fund (Equity based) portfolio.

noble asked 9 years ago

Hello Sreekanth, Hope you are doing great! I'm on my annual review of my portfolio: Current portfolio: Portfolio 1 (kid's education - around 12years away) 1) ICICI Focused Bluchip – 1K/ month 2) HDFC Capital Builder – 2K/ month 3) Franklin India Smaller Companies – 3K/ month Portfolio 2 (kid's marriage; ~18 years) 1) Birla Sunlife Frontline Equity – 1K/ month 2) Franklin India High Growth Companies – 2K/ month 3) UTI Midcap- 3K/ month Portfolio 3 (wealth and retirement ~20years -may part withdraw some % before that) 1) UTI Equity – 1K/ month 2) Franklin India Prima Plus – 1K/ month 3) HDFC Balanced – 2K/ month 4) Reliance Small cap – 2K/ month 5) DSP Blacrock Micro Fund – 2K/ month 6) SBI Bluechip - 2k/m 7) Axis LTE - 3k/m Total 25K/ Month. This was initiated from December 2014 to till date. I'm planning to cut-short the number of funds to make it easy to track and manage. Please see my new plan below: Name of fund, Education, Marriage, Wealth+retire 1) Axis Long term 0 0 3 2) HDFC balance 1 2 0 3) Tata balance 1 0 2 4) UTI mid 2 0 3 5) Franklin Smaller 4 2 5 Total 8k for Education, 4K for marriage portfolio etc. (Incidentally. all funds are from your portfolio

/ I had also shortlisted DSP BlackRock Micro Cap and Mirae Asset Emerging BlueChip also to the list; but finally went with your pick on long track record and risk ratio) What do you think about my plan.. hope my fund selections are good and this makes me easy to track. I may not switch my existing corpus immediately (may wait for a year or so), i 'll just stop sips on existing funds and starts sips with this new plan.. Simplifying life

Thanks for your valuable time and suggestions. -jose

9 Answers

0 Vote Up Vote Down

Sreekanth Staff answered 9 years ago

Hi dear Jose, I believe that you have picked these funds on your analysis plus after some reading. If so, its fine. Because, my goals/risk-profile can be very different to your's... Hope you get what I am trying to convey to you :) I could notice that you are allocating more amount for small & Mid cap funds for your very long-term goals, which is good. You said that you are going to stop future SIPs, but what about the accumulated fund values? Are you going to continue holding them? By the by, do you have adequate life/health insurance cover? Kindly read: http://www.relakhs.com/best-mutual-fund-scheme-risk-ratios/ http://www.relakhs.com/mutual-fund-portfolio-overlap-comparison-tools/ http://www.relakhs.com/personal-financial-planning-articles-list/

0 Vote Up Vote Down

noble answered 9 years ago

Thank you for the quick replay! Yes, I've shortlisted these finds based on various reading and research as well. My only doubt was whether to add one more mid/small cap to the list (either DSP BlackRock Micro Cap OR Mirae Asset Emerging BlueChip) to spread out exposure as there is no significant overlap between any of these four funds :) What do yo think? Accumulated fund values - I'm planning to hold them for a year, then I'll switch to my new plans. My points on this was:

I'll get some more time to see the progress
I can avoid EXIT Loads and TAX implications on recent sips (Otherwise I can move 1 year completed corpus values to new funds and continue to hold the rest for one more year)
Since the mid/small caps had run up quite a lot recently, it may not be wise to move most of the funds to mid cap now? - am I trying to time the market?

Please let me know your thoughts on this. Term insurance: At present, I have 40L term cover from SBI term insurance, planning to add another 60L term plan from either HDFC Click to protect or ICICI iProtect online term insurance. Have to purchase an accidental plan too. Health - currently relaying on employer's group mediclaim family floater plan - planning to add a Super topup OR standalone family floater with good No Claim Bonus additions. Thanks!

0 Vote Up Vote Down

Sreekanth Staff answered 9 years ago

Hi, If continue to hold the existing funds (which I believe can have very high PORTFOLIO OVERLAP among some funds, especially which are from the same fund categories), may not be that beneficial. You may consider trimming down the existing portfolio, by dropping funds which have high overlap. You can redeem such funds and switch to existing ones or new funds. (Tax impact - agree with your view). Kindly do implement your insurance action items at the earliest, as they are high priority ones. Read: http://www.relakhs.com/best-personal-accident-insurance-policies-in-india-details-comparison/ http://www.relakhs.com/best-health-insurance-comparison-websites-portals/ http://www.relakhs.com/top-up-health-insurance-plans-super-top-up-india/

0 Vote Up Vote Down

noble answered 9 years ago

Trimming funds from existing portfolio - If I understood correctly, I can go ahead with my new SIP plans, and look for portfolio overlap in the existing accumulated funds to limit overlap? Insurance, yes I'll do it at the earliest. Thanks!

0 Vote Up Vote Down

Sreekanth Staff answered 9 years ago

Hi, Yes - your understanding is correct.

0 Vote Up Vote Down

noble answered 9 years ago

Tables were not displaying properly, kindly read in following sequence for each funds: education, marriage, wealth, retirement (all in thousands) Axis Long term, 0, 0, 0, 3,
HDFC balance, 1, 2, 2, 0,
Tata balance, 1, 0, 0, 2,
UTI mid, 2, 0, 0, 2,
Franklin Smaller, 4, 2, 3, 1,
Mirae Emerging, 0, 0, 3, 2, Please see my above queries.. thanks!

0 Vote Up Vote Down

Sreekanth Staff answered 9 years ago

Dear Jose, Glad to know that you are serious about managing your personal finances well, good to see that you are implementing the suggestions... 1 - Your portfolio looks fine 2 - Though markets are at peak levels, I have always believed that timing the markets can be a very tough task. Suggest you to deploy your funds whenever you see an opportunity, for example day before yesterday Markets were down a bit... Kindly read : https://www.relakhs.com/200-day-moving-average-dma-mutual-funds/ 3 - Personally I too have investments in these funds..I am continuing with investments in UTI mid cap, whereas I am holding existing units in TATA balanced fund and currently not investing additional sums, this is purely based on my goal requirements. 4 - You may redeem them and switch to listed funds, do have a look at tax implications and exit loads (if any). Kindly read : https://www.relakhs.com/mutual-funds-taxation-rules-capital-gains-tax-rates-on-mfs-fy-201516/ 5 - Ok. Do you have Personal accident insurance cover?

0 Vote Up Vote Down

noble answered 9 years ago

Thanks Sreekanth for the quick replay! I'll implement my SIP plans accordingly. Yeah, I missed day before yesterday, but will look for any downs to enter the missed SIP funds. I'll continue with my plans on UTI midcap and TATA balanced; lets give it one more year and will see it on the next review stage. I'm planning to simply start SIP as per my plan and planning to delay the existing fund redeem 'n switch it a bit to avoid TAX implications. I don't have Personal accident insurance cover, - i think there is one 5L PA linked to my Credit Card, not sure, have to check. Else would you recommend taking a standalone PA? Many Thanks! -Jose

0 Vote Up Vote Down

Sreekanth Staff answered 9 years ago

Dear Jose, In case, if you have not opted for any Accidental death benefit rider or Permanent Disability benefit rider, suggest you to consider buying a standalone PA insurance cover. Kindly read : https://www.relakhs.com/best-personal-accident-insurance-policies-in-india-details-comparison/