Taking a fresh look at your portfolio

Readers wrote in with their queries. Our analysts take a look at three portfolios.
By Morningstar |  22-06-18 | 

After recategorisation, I request your views on the following funds. Should I continue with my SIPs? 1. ICICI Prudential Multi Asset Fund 2. ABSL Focussed Equity Fund 3. Franklin India Bluechip Fund.

- Gopalan

All of the three schemes you have mentioned are fairly well managed schemes run by proficient managers.  It is important to look at your investments from a holistic portfolio perspective after understanding your risk return objectives.

ICICI Prudential Multi Asset Fund (erstwhile ICICI Prudential Dynamic Plan) used to invest into a mix of equities and fixed income which was dynamically managed as per the valuations of the markets. The fund was largely tilted towards equities. Under the new mandate the fund will invest into a mix of equity, fixed income and gold, but we expect a larger allocation towards equities.

ABSL Focused Equity Fund (erstwhile Aditya BSL Top 100) used to be a large-cap fund earlier but now is a focused equity fund (30 stocks only) with a multi-cap style. It is important to highlight focused funds can tend to be more volatile due to a concentrated strategy. So you may want to consider your risk return objectives while looking at the revised scheme mandate.

Franklin India Bluechip is a pure large cap fund, run by a highly experienced manager with a quality bias. There is no change in the investment mandate of the fund.

On a standalone basis, all these three funds are good investment options. We would urge you to consider your personal risk return objectives and look at it from a holistic portfolio perspective.

I’m invested in DSP BlackRock Tax Saver (Rs 5,000), Mirae Asset Tax Saver (Rs 2,500). I’m considering investing Rs 7,500 in only one of the above funds. Which one should I opt for? My investment horizon for this is 20 years.

- Prem

 It is excellent to see the long-term view you have taken.

Mirae Asset Tax Saver has put up some excellent numbers over the past 2 calendar years. The fund manager Neelesh Surana also instils confidence in us. Having said that, it is a relatively new fund launched in December 2015. It has not yet completed 3 years.

DSP BlackRock is a 4-star fund. Our analyst assigned a rating of Neutral. You can read his views here.

Since you are taking such a long-term view, it really would not make much of a difference which fund you opt for. It would also be wise to look at your portfolio and see if there are other funds from the similar fund houses. It pays to diversify across styles and fund houses.

My father has invested in four funds: ICICI Prudential Value Discovery Fund, Franklin India Bluechip Fund, Franklin India Equity Fund, Franklin India Smaller Companies Fund. Should he stay invested in these funds or shift?

- Darshan

The decision on whether to stay invested or not depends on numerous factors. The two prominent questions to be answered are: Will the individual be needing the money in the near term or not? What was the rationale when the fund was opted for, and does it still hold?

All the above funds are very good offerings in their respective categories. And all have been rated by our analysts. Do take a look at the brief analyst notes.

ICICI Pru Value Discovery: Flexi Cap – Silver Rating

Franklin India Equity: Flexi Cap - Gold Rating

Franklin India Bluechip: Large Cap – Gold Rating

Franklin India Smaller Companies: Small/Mid Cap - Silver

What stood out in the above list of funds was that three funds are from one single fund house. Do remember, diversification is not only across fund styles and market cap, but it does make sense to diversify across fund houses too.

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