Getty ImagesMy advisor asked me to shift some of my funds to gilt funds. I need to double check as there would be certain losses I would be bearing on switching from one fund to another as the current value is less than the cost value.
Below is my portfolio if you can help or suggest whether I should switch some or not. It would be a great help.
Mirae Asset Emerging Bluechip Fund
Nippon India Banking Fund
Nippon India Tax Saver Fund
Nippon India Small Cap Fund
Aditya Birla Tax Relief 96 Fund
DSP Small Cap Fund
L&T Emerging Business Fund
Recently I made some changes in portfolio
DSP Small Cap Fund (Stopped)
L&T Emerging Business Fund (Stopped)
Nippon India Small Cap Fund (Stopped)
Kotak Standard Multi Cap Fund (Started)
SBI Small Cap Fund (Started)
Axis Bluechip Fund (Started)
I have been investing in these funds for the last three years and these changes were done after that.
- Tushar Dhingra
We are not privy to your conversation with your advisor. We also do not have your personal details and crucial information like goals, horizon, and risk profile.
However, we find it strange that your advisor has asked you to shift your equity investments to gilt funds. Equity mutual funds are recommended to investors looking to build wealth over a long period. Gilt funds are typically suggested to conservative investors looking to invest with a horizon of three to five years. These schemes are highly sensitive to interest rates and they tend to do well in a falling interest rate scenario like the current one.
You should have a conversation with your advisor and find out the reasons why he is asking you to shift your equity investments to gilt funds. If the double-digit returns offered by these schemes are the only reason, you should part ways with your advisor. Similarly, we have noticed that you stopped your investments in small cap schemes recently. Is it because of their prolonged underperformance? If so, you should reassess your risk profile and ensure that you have invested in the right equity mutual fund category. Small cap schemes are extremely risky and volatile. They go through prolonged periods of agony. If that doesn’t suit you, you probably got into a wrong investment option. If so, your advisor was not paying attention to your risk profile.
Anyway, it is time for you to get back to the drawing board. List your goals, time you have to achieve them, and find out your risk profile. Next put a number to each goal, provide for annual inflation to find out the target corpus for each goal. Next, find out how much you need to invest every month to achieve those targets. This will help you to have a better mutual fund portfolio. If you indeed are going through an advisor, have a conversation with him. If he is not making much sense, ask your friends and colleagues for references and shift to a better advisor.
Below is my portfolio if you can help or suggest whether I should switch some or not. It would be a great help.
Mirae Asset Emerging Bluechip Fund
Nippon India Banking Fund
Nippon India Tax Saver Fund
Nippon India Small Cap Fund
Aditya Birla Tax Relief 96 Fund
DSP Small Cap Fund
L&T Emerging Business Fund
Recently I made some changes in portfolio
DSP Small Cap Fund (Stopped)
L&T Emerging Business Fund (Stopped)
Nippon India Small Cap Fund (Stopped)
Kotak Standard Multi Cap Fund (Started)
SBI Small Cap Fund (Started)
Axis Bluechip Fund (Started)
I have been investing in these funds for the last three years and these changes were done after that.
- Tushar Dhingra
We are not privy to your conversation with your advisor. We also do not have your personal details and crucial information like goals, horizon, and risk profile.
However, we find it strange that your advisor has asked you to shift your equity investments to gilt funds. Equity mutual funds are recommended to investors looking to build wealth over a long period. Gilt funds are typically suggested to conservative investors looking to invest with a horizon of three to five years. These schemes are highly sensitive to interest rates and they tend to do well in a falling interest rate scenario like the current one.
You should have a conversation with your advisor and find out the reasons why he is asking you to shift your equity investments to gilt funds. If the double-digit returns offered by these schemes are the only reason, you should part ways with your advisor. Similarly, we have noticed that you stopped your investments in small cap schemes recently. Is it because of their prolonged underperformance? If so, you should reassess your risk profile and ensure that you have invested in the right equity mutual fund category. Small cap schemes are extremely risky and volatile. They go through prolonged periods of agony. If that doesn’t suit you, you probably got into a wrong investment option. If so, your advisor was not paying attention to your risk profile.
Anyway, it is time for you to get back to the drawing board. List your goals, time you have to achieve them, and find out your risk profile. Next put a number to each goal, provide for annual inflation to find out the target corpus for each goal. Next, find out how much you need to invest every month to achieve those targets. This will help you to have a better mutual fund portfolio. If you indeed are going through an advisor, have a conversation with him. If he is not making much sense, ask your friends and colleagues for references and shift to a better advisor.
(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.)
Get Unlimited Access to The Economic Times
