Is my portfolio well-diversified? Suggest me investment options to invest the remaining Rs 3,500.
— Jaffar Shaikh
Rushabh Desai, an Amfi-registered mutual fund distributor, based in Mumbai, responds:
You have invested in 12 different mutual funds which are plenty. Having too many funds in your portfolio will lead to overdiversification. This will drag down the overall returns and your portfolio will not be able to generate optimum returns. Also, you are invested in theme/sectoral based schemes and gold funds which I do not recommend for SIP investments (excluding Nasdaq 100 FoF). These funds will be cyclical and require precise entry and exit to get optimum returns.
If you invest Rs 25,000/- every month for 25 years, assuming 12% CARG returns in equities your portfolio value shall be around Rs 4.74 crores. In order for you to achieve your target amount of Rs 10 crores you need to either increase your monthly SIP amount to around Rs 53,000 or increase your SIP investment horizon from 25 years to around 32 years.
You can look at investing in the following mutual funds for your monthly SIP investments – Axis Bluechip Fund (20%), Parag Parikh Flexi Cap Fund (15%), Canara Robeco Flexi Cap Fund (15%), DSP Mid Cap Fund (20%), SBI Small Cap Fund or Kotak Small Cap Fund (20%) and Motilal Oswal Nasdaq 100 FoF (10%). If you don’t wish to take high exposure in the pure mid and small cap funds, you can reduce 10% of the overall allocation and divide it in the flexi cap funds.
