An all-equity mutual fund portfolio can be very risky

An all-equity mutual fund portfolio can be very risky

I wish to generate more than 1 crore in 15 years. I invest1,000 in ABSL Frontline Equity; 2,000 each in SBI Bluechip, ICICI Bluechip and Mirae Asset India Equity; 3,000 each in Canara Robeco Emerging Bluechip Equities, Mirae Asset Emerging Bluechip and Axis Focussed 25 direct plan. I want to start investing 3,000 in L&T Midcap fund. Is my portfolio okay? Are my investments enough?

—Sriram P

To get to a corpus of 1 crore in 15 years, you would need to save and invest about 22,000 a month between now and then (assuming 12% long-term market returns). At present, you are investing 16,000 and you are looking to add another 3,000, bringing the total to 19,000. If you can add another 3,000 to the mix, you’d be well on your way to your target.

Regarding your portfolio, you are investing in an all-equity portfolio which is a very aggressive, high-risk combination. You need to ensure that you can ride out market volatility (the last few months would have given you a good taste of that) in these years to realise the benefits and returns of your investments.

Regarding your fund choices, you are investing 5,000 in large-cap funds and the remaining 11,000 in diversified funds (large- and mid-cap funds). Adding L&T Mid-cap fund to this portfolio would be a good move considering that it’s a good fund and is exclusively focused on the mid-cap segment. That would give you a portfolio that is a quarter into large-cap funds, 60% in diversified funds and 15% in mid-cap funds, making it an aggressive portfolio that is well spread out across fund houses, fund categories and market segments. If you were to add more money, please add a small-cap fund such as HDFC Small cap fund.

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