Have I chosen the right mutual funds?

If you have any mutual fund queries, message ET Mutual Funds on Facebook. We will get it answered by our panel of experts.

I have a moderate risk appetite and a horizon of at least 10 years. I am invested in the following funds:

ICICI Prudential Bluechip Fund: Rs 7,000
SBI Focused Equity Fund: Rs 6,000
Mirae Asset Emerging Bluechip Fund: Rs 6,000
Axis Midcap Fund: Rs 8,000

Am I investing in the right funds?
- Supratik Chatterjee

We typically ask a long-term investors with a moderate risk appetite to invest mostly in multi cap funds. If he wants to diversify and reduce risk, we may ask him also to invest a little in large cap mutual funds.

You are currently investing in a large cap scheme, focused multi cap scheme, large & mid cap scheme, and mid cap scheme. More than half of your investments are in large & mid cap and mid cap schemes. These schemes are highly risky and volatile – they are suited for aggressive investors with a very large risk appetite and ability to withstand volatility. A moderate investor may find it difficult to handle the extra volatility and risk associated with these schemes. You should ensure that you are okay with the extra risk in these schemes. If you think you cannot handle extra risk and volatility, you should stop your investments in them.
Axis Midcap Fund-Growth ★★★★★
  • 9.88%Annualized Return for 3 year
  • >3 years Suggested Investment Horizon
  • 2.6 YearsTime taken to double money
  • 6.42%Annualized Return for 3 year
  • >3 years Suggested Investment Horizon
  • 2.8 YearsTime taken to double money

It is always better to adopt a goal-based investment strategy. Identify your financial goals, both short and long-term ones, and quantify them. You can also include inflation in your long-term goal calculations. This will help you to calculate the required target corpus and how much you need to invest regularly to achieve your various financial goals.
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