Ideal, diversified portfolio for Mutual Fund Investment - 25000 per month

Zerodha Coin - Direct MF
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I am 25 and plan to invest Rs 25000 per month in Equity mutual funds (Direct plan -Growth) that are High-Moderate risk considering long term horizon of greater than 3 years. Since 2018 is expected to be a volatile year, I also plan to ‘time the market’ by Pausing SIPs during Highs and investing the missed SIPs during Lows (based on the stocks in these funds). I have selected 10 Funds to ensure diversification since some of these are Focused funds. I have selected ELSS funds for tax saving. Please review my portfolio:

IDFC Tax Advantage (ELSS) Fund- 3000
Principal Tax Savings Fund- 3000
Invesco India Tax Plan- 2000
Motilal Oswal Long Term Equity- 2000
Kotak Select Focus Fund (Kotak Standard Multicap Fund)- 3000
IDFC Focused Equity Fund- 2000
Tata Equity P/E Fund - 2000
Invesco India Contra Fund- 3000
HDFC Small Cap Fund- 3000
L&T Emerging Businesses Fund - 2000

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One wise man said, “Time in the market is worth much more than timing the market”

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Its better if you can hire the Financial planner and take professional advice rather then asking this on forum.

Completely agree with you…!!!

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A bit late to the party - but here’s my suggestion.

You’re too diversified in number of funds. Most mutual funds invest in similar assets from similar market caps - so you’re actually not diversified at all.

Diversification is fine, but adding 9 funds to your portfolio isn’t diversification. Most of them have similar benchmarks, so you’d be overexposed to certain stocks and sectors.

Also, if you’ve 9 funds - even if one of them do very well; you won’t get any reasonable benefit of it. Some diversification is nice, but you concentrate to grow, and you diversify to protect. You’re just starting out - once your net worth crosses crores, you should start thinking about diversification, because then you’d have something to protect.

If you’re looking for true diversification; diversify across market cap.

Here’s what I’d suggest - keep a large-cap MF as ELSS that has BSE 200 as benchmark; and find two other funds.

Here’s my suggestion:

  • Axis Long Term Equity (10k/ month) [Benchmark: S & P BSE 200]
  • Parag Parikh Long Term Value fund (10k/ month) [Benchmark: Nifty 500]
  • UTI Nifty Index Fund (5k/month) [Benchmark: Nifty 50]

Parag Parikh is a fund that invests in mid & small cap in India; as well as international equity with arbitrage positioning for currency risks. Every equity investor has to have this in their folio.

Also, you cannot ignore large-caps - hence the Nifty index fund.

If you can afford to have 4 funds; go with this:

  • DSPBR Tax Saver (10k / month) [Benchmark: Nifty 500]
  • Parag Parikh Long Term Value (5k/month) [Benchmark: Nifty 500]
  • UTI Nifty Index Fund (5k/month) [Benchmark: Nifty 50]
  • ICICI Pru Nifty Next 50 Fund (5k/month) [Benchmark: Nifty Next 50]

You’re now truly diversified across market caps, and Parag Parikh gives you exposure to US markets.

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