Mutual Fund Consolidation Advice: Should I Sell Some Funds to Invest in Others?

Ans: You may continue with the 5 & 4 rated funds; however for others better alternative is available

Equity - Large Cap Funds:

- LIC MF Large Cap Fund-Regular Plan-Growth

- Axis Bluechip Fund - Regular Plan - Growth

- Kotak Bluechip Fund - Growth

- Mirae Asset Large Cap Fund - Growth Plan

Equity - Mid Cap Funds:

- Motilal Oswal Midcap 30 Fund (MOF30)-Regular Plan-Growth Option

- DSP Midcap Fund - Regular Plan - Growth

Equity - Value Funds:Tata Equity P/E Fund Regular Plan -(Growth Option)

Equity - Focused Funds:

- Axis Focused 25 Fund - Regular Plan - Growth Option

- Motilal Oswal Focused 25 Fund (MOF25)- Regular Plan Growth Option

Equity - Large & Mid Cap Fund

- BOI AXA Large & Mid Cap Equity Fund Regular Plan- Growth

- Canara Robeco Emerging Equities - Regular Plan - GROWTH

- Tata Large & Mid Cap Fund- Regular Plan - Growth

Hybrid - Aggressive Hybrid Fund

- Axis Equity Hybrid Fund - Regular Plan Growth

- Dsp Equity And Bond Fund - Growth

- Motilal Oswal Equity Hybrid Fund-regular Plan Growth

Ans: The funds that can be continued are 15, 16, 26, 27, 28, 29, 30, 32 and 33; 27, 29, 30, and 33 being debt funds and 15, 16, 28 and 32 being equity funds.

Ans: Hello swami. The detailed overview of your MF portfolio indicates over-diversification with 20k SIP. Hence, I would suggest reconsidering, pruning, and reshuffling your portfolio. 

As part of the portfolio reshuffle, make sure to have AMC diversification as well.

Limit yourself to 1-2 schemes in each category.

I can see several schemes in different categories for each AMC. I recommend reconsidering the scheme for Navi US scheme to better scheme in same category.

Ans: Assessing Your Current Portfolio
You've done well by investing in mutual funds since 2007. Your portfolio covers a variety of fund categories, which shows your commitment to building wealth. However, consolidating your portfolio is a wise move. It allows for better management and can lead to more consistent returns.

Let's go through your current holdings and provide suggestions on which funds to keep and which to let go.

Key Points for Portfolio Consolidation
Focus on Core Funds: Keep funds that have a proven track record and align with your financial goals.

Eliminate Overlap: Multiple funds in the same category can create overlap. This dilutes your returns and makes tracking performance harder.

Consider Fund Performance: Retain funds that have consistently outperformed their benchmarks and peers over the years.

Simplify Management: Having fewer funds with more substantial investments can simplify portfolio management and enhance overall returns.

Fund-by-Fund Analysis
DSP-BR India TIGER - RP (D) and DSP-BR Top 100 Equity - RP ICDW (D)
Sector-Specific Risk: The DSP-BR India TIGER fund is sector-specific, focusing on infrastructure. While infrastructure can provide high returns, it’s also highly cyclical. This means it can be volatile.

Top 100 Fund: This fund focuses on large-cap stocks, which generally offer stability.

Suggestion: Consider letting go of the sector-specific DSP-BR India TIGER fund. Retain the DSP-BR Top 100 Equity fund if it has shown consistent performance.

Franklin India Flexi Cap Fund - IDCW
Versatility: Flexi cap funds invest across large, mid, and small-cap stocks. This provides diversification within a single fund.

Suggestion: Keep this fund if it has performed well over the years. It’s a good core holding due to its flexibility and diversification.

HSBC Large Cap Fund - Regular IDCW (Formerly L&T India Large Cap Fund)
Large Cap Stability: Large-cap funds offer stability and lower risk compared to mid or small-cap funds. They are essential for a well-rounded portfolio.

Suggestion: Retain this fund if it has outperformed its benchmark consistently.

Nippon India Growth Fund IDCW Plan and Nippon India Power and Infra Fund
Growth Fund: Nippon India Growth Fund is likely a multi-cap or mid-cap fund, offering potential for high returns but with more risk.

Sector-Specific Risk: The Power and Infra Fund is another sector-specific fund. Like the DSP-BR India TIGER fund, it carries high risk due to its focus on a single sector.

Suggestion: Keep the Growth Fund if it has delivered strong performance. Consider letting go of the Power and Infra Fund due to its sector-specific nature.

SBI Magnum Midcap Fund (D) and SBI Contra Fund (D)
Midcap Fund: Midcap funds are good for growth but can be volatile. If this fund has been a strong performer, it’s worth keeping.

Contra Fund: Contra funds invest in stocks that are currently out of favour but have the potential for long-term growth. These funds can be rewarding but are also risky.

Suggestion: Retain the Midcap Fund if it has consistently outperformed. Consider letting go of the Contra Fund if it hasn't met expectations.

Sundaram Large Cap Fund Regular - IDCW
Large Cap Stability: Similar to the HSBC Large Cap Fund, this fund focuses on large-cap stocks.

Suggestion: If this fund has performed well, you might want to keep either this or the HSBC Large Cap Fund but not both, to reduce redundancy.

HSBC Progressive Themes (D) and HSBC Advantage India Fund
Thematic Investing: These funds likely focus on specific themes or sectors, which can be risky if the theme underperforms.

Suggestion: Consider letting go of these funds unless you have a strong belief in the themes they cover and they have performed well.

HDFC Infrastructure Fund (D)
Sector-Specific Risk: Another infrastructure-focused fund, which means higher risk and potential volatility.

Suggestion: Similar to other sector-specific funds, consider letting this one go unless it has delivered exceptionally strong returns.

Edelweiss Mid Cap Fund (Regular Plan - IDCW Option - Payout)
Midcap Growth: Like the SBI Magnum Midcap Fund, this fund focuses on mid-cap stocks.

Suggestion: Keep this fund if it has shown strong performance and consider retaining only one mid-cap fund to avoid overlap.

Sundaram Diversified Equity Fund - Regular - IDCW
Diversified Equity: Diversified equity funds provide broad exposure across various sectors and market caps.

Suggestion: Retain this fund if it has consistently outperformed its benchmark and provides broad diversification.

EBRG - Mirae Asset Large and Midcap Fund (Formerly Mirae Asset Emerging Bluechip Fund) - SIP
Large and Midcap Exposure: This fund provides a mix of large and mid-cap stocks, offering a balance of stability and growth.

Suggestion: This is a strong fund to keep, especially if it has been performing well.

HDFC Children’s Gift Fund - Regular Plan (Lock-in) - SIP
Goal-Oriented Fund: This fund is likely tied to a specific goal like children’s education. These funds are generally more conservative.

Suggestion: Keep this fund if it aligns with your financial goals and has performed adequately.

Final Insights
Consolidating your portfolio is a smart move. Focus on retaining funds with a proven track record of performance and that align with your financial goals. Consider eliminating sector-specific and thematic funds unless they have consistently outperformed. By streamlining your investments, you can manage your portfolio more effectively and potentially achieve better returns.

Invest more substantial amounts in fewer funds to maximise growth and simplify management. Regularly monitor your portfolio and make adjustments as needed to stay on track with your financial goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in