Hello. I am 28 years old. My risk appetite is high for another 10 years since I am at a very young age. I have a lumpsum amount with me from which I am planning to do SIP. Kindly let me know if it is a well-diversified portfolio:
1) UTI Midcap Fund Growth
2) ICICI Prudential Nifty50 Index Fund (Cumulative)
3) Quant Infrastructure Fund Growth
4) ICICI Prudential Nifty Next50 Index Fund Growth
5) Quant ELSS Tax Saver Fund Growth
6) Nippon India Smallcap Fund Growth
7) SBI Contra Fund Growth
8) Quant Smallcap Fund Growth
9) ICICI Prudential Flexicap Fund Growth (Lumpsum Rs 1 lakh)
10) Quant PSU Fund Growth (Lumpsum for Rs 1 or 2 lakh)
SIP amount Rs 40,000
– Dhanraj Prabhu Gp
Your portfolio covers a mix of investment styles: Large-cap, Mid-cap, Small-cap, and ELSS. This provides you exposure to different market capitalizations. Here are important things to note:
• Overweight on small-cap: You are having 3 small-cap funds in your portfolio (Nippon India, Quant Small Cap, and potentially Quant Infrastructure) which is a high allocation for a diversified portfolio, especially for someone starting out. Small-cap funds are riskier and can be volatile. You can consider replacing 1 or 2 small-cap funds with a large-cap or multi-cap fund. This will provide stability to your portfolio.
• There is an overlap between Quant Infrastructure Fund and Quant ELSS Tax Saver Fund Growth as more than 50% of portfolio allocation is the same, so invest in either one of them. We advise you to invest in Quant ELSS Fund Growth as it is a tax saving fund.
• The portfolio lacks a debt fund, which creates diversification and helps manage volatility. You can consider adding a balanced or debt fund to bring stability. Your portfolio focuses only on equity. Since your investment horizon is long, consider adding a debt fund for stability.
Overall:
The portfolio has a good foundation for aggressive investors with a long-term horizon (10+ years). However, it could benefit from including a debt fund and potentially reducing overlap in the small cap segment.By – Mr. Amit Goel, Co-Founder and Chief Global Strategist at Pace 360
