Want to invest in mutual funds but don’t know how to go about it?
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Get all your mutual fund related queries answered by our expert, Manoj Nagpal, managing director and chief executive officer, Outlook Asia Capital, on our show Mutual Fund Corner.
Q: 35-year-old Mayank Sehgal writes to us from London. His vision is to make a good mutual fund portfolio for next 10-15 years and has picked up a balanced sector portfolio (in promising sectors).
Have the following mutual fund - SIP portfolio:
| No. | MF Name - SIP | Type | Start Date | Monthly Allocation (INR) | Ann. Return |
| 1 | Franklin India Dynamic PE Ratio(G) | Dynamic Fund | Apr/2013 | 10,000 | 9.17% |
| 2 | ICICI Pru Banking & Fin Serv Fund(G) | Sectoral - BFSI | Aug/2015 | 10,000 | 14% |
| 3 | Reliance Small Cap Fund(G) | Small Cap | Feb 2018 | 10,000 | -25% |
| 4 | L&T Infrastructure (G) | Sectoral -Infrastructure | Feb 2018 | 10,000 | -24% |
Would you recommend me to stay with Reliance Small Cap and L&T Infra or suggest to switch? Would you recommend me to add any sectoral funds - pharma, power, FMCG, etc.? In case I want to increase my exposure to mutual fund SIPs, is it recommended to increase amounts to add new funds?
A: Given that you want to build a high risk portfolio for 10-15 years with a sectoral allocation, you can continue with the Reliance Small Cap and L&T Infra Fund. Their short term performance maybe weak, but both are well-managed funds with distinct advantages of an impeccable fund performance. Both are mid and small cap oriented funds though.
Consumption is a theme, which is intrinsic to the Indian growth story and though some parts of this are overvalued, this is theme, which will add value in the next decade also. You can add the consumption theme. Pharma and healthcare are a bit cyclical in nature, though we do see great potential in them also.
Ideally, do not increase the number of funds. A 3-4 fund SIP portfolio will serve your purpose and any further diversification by adding of funds may not add any significant value. Since you have a sector focus, maybe add at best one more fund in the consumption or healthcare theme.
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