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Is my mutual fund portfolio overdiversified?

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

ET Online|
Jul 09, 2019, 02.57 PM IST
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investing in MF
I am 34 years old. I have been investing for retirement and education of my newborn. My risk profile is moderate to aggressive. I have savings of around Rs 60 lakh in FDs. I want to invest it in equity for the next 10 years. I am looking for a long-term investment with a horizon of eight to 10 years.

My funds are:
ELSS funds:
IDFC Tax Advantage (ELSS) Fund: Rs 3,500
Aditya Birla Sun Life Tax Relief 96: Rs 2,000

Large cap funds:
SBI Blue Chip Fund: Rs 5,000
ICICI Prudential Bluechip Fund: Rs 5,000

Multi cap funds:
SBI Magnum MultiCap Fund: Rs 5,000
Parag Parikh Long Term Equity Fund: Rs 5,000

Hybrid funds:
ICICI Prudential Equity & Debt Fund: Rs 3,000
HDFC Balanced Advantage Fund: Rs 5,000

Mid cap funds:
HDFC Mid-Cap Opportunities Fund: Rs 1,500
L&T Midcap Fund: Rs 1,500

I want to increase my monthly SIP by Rs 20,000. Is my portfolio overdiversified? Should I invest the additional Rs 20,000 in the same mutual fund schemes?
--Prasanna Deshpande

Suresh Sadagopan, Founder, Ladder7Financial Advisories, responds:


The funds seem to be fine. However, you do not need too many schemes. You just need a large cap scheme, multi cap scheme, hybrid scheme and mid cap scheme. Allocate your investments in them and monitor their progress. It is suggested that you review your portfolio at least once a year. If you are in a position to handle this by yourself, then it is fine. Otherwise, you should take the help of a professional for investment management. The amount of money to manage would become significant over a long period and even your stakes would become very high.
(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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