How many funds ought to I’ve in my MF portfolio?

I’m 35 years previous and doing month-to-month SIPs (systematic funding plan) within the following mutual fund (MF) schemes: Canara Robeco Blue Chip Equity and HDFC Index S&P BSE Sensex ( ₹6,000 every), Edelweiss Balanced Advantage and Mirae Asset Hybrid Equity ( ₹5,000 every), Kotak Small Cap ( ₹3,000) and SBI Magnum Medium Duration ( ₹10,000). Am I investing in too many funds? Is there any want for diversification into debt / gold?

— Name withheld on request

Ideally, 6 to eight funds are adequate to construct your MF portfolio. As the scale of the portfolio will increase, you might spend money on a most of 10 funds to scale back the danger of being overdependent on any specific fund or fund home. 

However, the funds you might be investing in are throughout fairness, debt and hybrid classes. In our opinion, you possibly can choose the fund classes primarily based in your funding goal. The debt funds can be utilized for short- to mid-term aims, hybrid funds will be helpful for mid-term targets, and for the long run, you possibly can contemplate investing in fairness funds.

When you observe this method, your asset allocation will get structured primarily based in your monetary targets, slightly than a predefined asset allocation. 

At current, your month-to-month funding of ₹35,000 throughout all of the funds is roughly 60% in fairness and 40% in debt. All the funds that you’re investing in are good and have carried out effectively inside their classes.

 If your funding goal is for the long run then you possibly can cut back the SIP in debt and hybrid and make investments extra in fairness funds. In fairness, you possibly can contemplate including Parag Parikh Flexicap Fund and SBI Focused Equity Fund in your funding portfolio. 

From a hybrid fund perspective, each the funds that you’re investing in are good. If you will have common funding in debt within the type of EPF, VPF or PPF, then you might cease the SIP in SBI Medium Duration Fund, in case you are investing within the fund for a long run.

Harshad Chetanwala is co-founder at MyWealthGrowth.com.

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