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Should I make any changes to my mutual fund portfolio?

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Last Updated: Feb 12, 2020, 03.35 PM IST
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I have monthly SIPs in the following mutual funds:

Axis Bluechip Fund (Direct Plan, Growth): Rs 6,000/month
Axis Mid Cap Fund (Direct Plan, Growth): Rs 3,000/month
Canara Robeco Emerging Equities Fund (Direct Plan, Growth): Rs 3,000/month
HDFC Small Cap Fund (Direct Plan, Growth): Rs 3,000/month
Mirae Asset Emerging Bluechip Fund (Direct Plan, Growth): Rs 6,000/month

Please review my portfolio and tell me if I need to make any changes to my allocation. My targets are children's (son and daughter) education, home buying (Rs 2 crore). I am 37 years old.
- Amitava Chakraborty

One, it is always better to quantify (or a target corpus for) your goals and an investment plan to achieve them. For example, the fee for higher education is Rs 10 lakh today. The same course would cost around Rs 31.72 lakh after 15 years when you account for an inflation rate of 8%. The same rule applies to all your long-term financial goals. So, please work with real numbers to put together a realistic target to achieve your goals.

Two, you are currently investing Rs 21,000 per month. Assuming an annual return of 12%, you would be able to create a corpus of around Rs 1.06 crore after 15 years.

You have not shared your risk profile. So, it is not possible to comment about the suitability of the schemes to you. However, here are some pointers that might help you.

You are currently investing in a large cap scheme, mid cap scheme, large & mid cap scheme, small cap scheme, and large & mid cap scheme (in the order you have written them). Apart from the large cap scheme, all other schemes in your portfolio carry higher risk. That means, your current portfolio is suitable for an investor with an aggressive risk profile. If you are okay with the higher risk and volatility associated with mid cap and small cap stocks and ready to wait for a long period to make extra returns, you may continue with these schemes. Otherwise, you need to assess your risk profile and choose schemes that are in line with your profile.

If you are a conservative investor, you should invest mostly in large cap mutual fund schemes. If you have a moderate risk profile, you should choose mostly multi cap mutual fund schemes.

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