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    Should I shift to multi cap schemes from large cap schemes?

    Synopsis

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

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    I am looking to build a retirement corpus in the next 10 years. I am a moderate risk-taker and expecting return around 14- 15℅. I have been investing through SIPs in the following schemes since August 2019:

    Reliance Large Cap Fund: Rs. 15,000
    Mirae Asset Large Cap Fund: Rs 15,000
    Aditya Birla Sun Life Equity Fund: Rs 15,000
    Kotak Standard Multicap Fund: Rs 15,000
    HDFC Mid-Cap Opportunities Fund: Rs 5,000
    L&T Mid Cap Fund: Rs 5,000
    SBI Small Cap Fund: Rs 5,000

    Should I continue to invest in large cap schemes or switch to multi cap schemes?
    -Surya Raju


    One, you have very high return expectations from your mutual fund investments. We believe you can hope to get 10-12% from your equity mutual fund portfolio over 10 years. Such a conservative calculation is better, as it would help you to save and invest more. It is better to be conservative when it comes to your long-term financial goals like retirement as you cannot add more money on the eve of your retirement.

    We typically ask equity investors with a moderate risk profile to invest mostly in multi cap schemes. If the investor wants to diversify and reduce the overall risk in the portfolio, we also ask the investor to add large cap mutual funds to the portfolio.

    Things You should consider
    • Annualized Return
      for 3 year: 4.35%
    • Suggested Investment
      Horizon: >3 years
    • Time taken to double
      money: 3.6 Years
    JM Large Cap Fund-Growth ★★★★★
    Things You should consider
    • Annualized Return
      for 3 year: 3.72%
    • Suggested Investment
      Horizon: >3 years
    • Time taken to double
      money: 4.6 Years
    You are currently investing in two large cap mutual funds, two multi cap mutual funds, two mid cap schemes and small cap schemes. Mid cap and small cap mutual funds are not in line with your risk profile. So, take a relook at these investments. As said before, your portfolio should be mostly in multi cap mutual funds. You may invest in large cap schemes if you want to play it safe and reduce the overall risk in the portfolio. However, you should remember that the percentage of large cap mutual funds in your portfolio should not be very large as it can drag the overall returns from the portfolio.

    (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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    2 Comments on this Story

    Shaleen Nath Tripathi351 days ago
    Longterm investors in good companies need not to worry... 10 years time is a good time horizon for investment... Mutual Funds choose stocks carefully and the risk is diversified...
    Sambhav Jain352 days ago
    I have been Investing in IDBI Small cap and IDBI Mid cap with a SIP of 1000 each since last two years, The returns are negative however I am 24 years old with a investment horizon of 10 years. Should I stay invested or change the AMC Fund??
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