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Determine the health of your MF portfolio

Updated: May 5, 2022

Check for these points below. If you answer "Yes" to any of the below, we strongly recommend revisiting your portfolio and making appropriate changes

  • Investing in Sectoral/ Thematic Fund via SIP

What are sectoral/ thematic funds - Funds investing in only one sector/ theme. Eg. pharma fund, banking fund, MNC Fund, etc.

Reason - The right way to invest in these funds is via lumpsum investment/ staggering the investment over a shorter period of time (like 3-6 months), as timing plays a very important role when investing in these. Time of ENTRY & EXIT - both play an equally important role while investing in Sector Funds.

  • Staying invested in Sectoral/ Thematic Fund for more than 5 years

Reason - Sectoral/ thematic funds are generally short investments and hence, profit booking in them at the right time is equally important. If you've invested in one of these and forgotten about it, time to review it again and churn your portfolio.

  • Too many funds (more than 6-8 MFs)

Reason - Diversification protects you from risks but over-diversification leads to decreasing the return potential of your portfolio.

  • All/ majority funds of the same fund house

Reason - Overdependence on one fund manager and their research can create concentration risk. For example, if you have 70% of your money in Axis Mutual funds, and if their investment philosophy does not perform well, it'll lead to low returns for your entire portfolio.

Hence, if you are well diversified across 3-4 fund houses, the risk can be balanced well leading to more stable returns.

Overdependence on one fund house may be a result of your bank manager having an exclusive tie-up with that fund house.

If we can help you invest, reach us on - Email: Whatsapp: +91-91110-06340 Schedule a Call:

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