How can I create a diversified mutual fund portfolio that will last for the next ten years?
How can I create a diversified mutual fund portfolio that will last for the next ten years? : Hi there. I am 27-year-old Abhishek. Being young, I have a high risk appetite for the next ten years. I intend to do SIP with a big chunk of money that I have on hand. Tell me if the portfolio is well-diversified, please.
The investing styles represented in your portfolio include large-cap, mid-cap, small-cap, and ELSS. You are exposed to various market capitalizations as a result. Here are some crucial points to remember:
Overweight in small-cap: Three small-cap funds—Quant Small Cap, Nippon India, and maybe Nippon Infrastructure : are included in your portfolio, which is an excessive amount for a balanced portfolio, particularly for an individual just starting out. Small-cap mutual funds are more volatile and risky. You might think about switching from one or two small-cap funds to a large-cap or multi-cap fund. Your portfolio will become more stable as a result.
Invest in one of the two Quant Infrastructure Funds or Quant ELSS Tax Saver Fund Growth since they share over 50% of the portfolio allocation. Given that Quant ELSS Fund Growth is a tax-saving fund, we encourage you to invest in it.
The absence of a debt fund in the portfolio contributes to its diversification and volatility management. If you want to add stability, you can think about adding a debt or balanced fund. All that’s in your portfolio is equity. Given the length of your investment horizon, you might want to include a debt fund for stability.
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Overall: The portfolio offers a strong base for long-term (10+ years) aggressive investors. It might, however, gain from having a debt fund and maybe lessening overlap with the small cap market.