ICICI Prudential Value Discovery Fund: Rs 1,000
IDFC Multi Cap Fund: Rs 2,000
ICICI Prudential Bluechip Fund: Rs 2,000
My risk profile is moderately high and I am planning to invest for a long period, say, more than 10 years. I also want to invest Rs 2,000 extra from this month in a new fund . Please review my portfolio and give suggestions about what I can do, also suggest me another fund to invest.
- Venkatesh Waran
Your portfolio is not in line with your stated risk profile. You are currently investing in a value fund, multi cap fund, and large cap fund. Value funds are meant for sophisticated long-term investors who are ready to wait for a very long period to create wealth. Multi cap funds are meant for moderate equity investors, and large cap mutual funds are meant for conservative investors. In short, your mutual fund portfolio is not focused.
Apart from ICICI Prudential Bluechip Fund, the other two schemes are average or below average.
You should invest in mutual fund schemes that are in line with your risk profile. First, try to define your risk profile sharply. Moderately high is very lose – it is not possible to guess how much extra risk are your willing to take. Only you would know the answer and the answer would change depending on the market conditions. So, try to define your risk profile - take an online quiz if needed.
Once you define your risk, it is easier to chose mutual funds that matches your profile. For example, if you have a moderate risk profile, you should invest mostly in multi cap funds. If you have an aggressive profile and stomach to tolerate lots of volatility, you may invest in mid and small cap schemes with a very long investment horizon. If you have a conservative risk profile, you should invest in large cap mutual funds. Note, it is extremely important to choose categories that you are comfortable with rather than chasing returns.
You don't need to invest in another scheme for your extra investment of Rs 2,000. Since you are investing a modest amount, you need to invest in just one scheme.
If you do not understand much about mutual funds, you must seek the help of a mutual fund advisor near you. You lose an opportunity to make money if you choose bad schemes and wrong categories.