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    Have I chosen the right mutual fund schemes?

    Synopsis

    If you have any mutual fund queries, message ET Mutual Funds on Facebook. We will get it answered by our panel of experts.

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    I have been investing Rs 5,000 each in these four funds since 2018.

    HDFC Mid-Cap Opportunities Fund
    HDFC Hybrid Equity Fund
    Mirae Asset Large cap fund
    Kotak Standard Multicap Fund.

    The returns have not been that great till date. I want to increase my investment to Rs 75,000 per month with a long term view of 10-12 years. Should I continue to increase my investment in these funds. Some of the other funds that I am looking at are:

    Invesco India Growth Opportunities Fund
    Mirae Asset Emerging Bluechip Fund
    Parag Parikh long term equity fund

    I am a moderate risk investor. I am 34 years.
    -Ronak Ram


    We always ask investors to choose their mutual fund schemes based on their financial goals, investment horizon, and risk profile. This strategy helps you to identify the right mutual fund categories to achieve your goals. For example, it will force you to choose debt mutual funds to take care of your short to medium term goals. It will also help you to identify the right equity mutual fund categories to meet your long-term goals.

    For example, an investor with a few months would be able to figure out that he should park the money in a liquid funds. If the investor has a few years, he can choose short duration funds. A conservative investor with at least five to seven years may choose large cap funds. An aggressive investor can chose mid cap and small cap schemes to meet his goals that are at least seven to 10 years away.

    Things You should consider
    • Annualized Return
      for 3 year: 4.59%
    • Suggested Investment
      Horizon: >3 years
    • Time taken to double
      money: 5.2 Years
    Things You should consider
    • Annualized Return
      for 3 year: 7.22%
    • Suggested Investment
      Horizon: >3 years
    • Time taken to double
      money: 3.7 Years
    You are currently investing in a mid cap scheme, aggressive hybrid scheme, large cap scheme, and multi cap scheme. Ideally, you should invest most of your money in multi cap schemes. If you want to reduce risk and diversify, you may also invest a small part of your money in large cap funds. As you can see, the mid cap scheme in your portfolio is not in line with your risk profile. Also, try to focus your portfolio sharply.

    Note, multi cap schemes are likely to see some changes by January to adhere to their new investment norms set by Sebi. Keep an eye for the changes.

    You should stick to the strategy stated above when it comes to choosing schemes in future, too. You are looking at two large & mid cap schemes and a multi cap scheme. The large & mid cap schemes have a higher risk, as they have the mandate to invest at least 35% in mid cap stocks. They are suited for aggressive investors.

    Lastly, always quantify your long-term goals. For example, if you want x amount for a long-term goal, you should find the current cost of the goal and provide for annual inflation. This will help you to find out your target corpus. Then you can calculate how much you need to invest every month to achieve the goal. This will help ensure that you reach your goal. Creating a corpus and allocating it to various goals can backfire. You may find that you don’t have much money left to take care of some goals.
    (If you have any mutual fund queries, message us on ET Mutual Funds on Facebook. We will get it answered by our panel of experts.)
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