Ideal portfolio for a moderate mutual fund investor

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I am 36 years old. I have a moderate risk profile. I am investing in some mutual funds for the last few years. My investment horizon is 15 years.

Aditya Birla Sun Life Frontline Equity Fund -Growth-Direct Plan: Rs 11,000
Axis Long Term Equity Fund – Growth: Rs 5,000
ICICI Prudential Long Term Equity Fund (Tax Saving) – Growth: Rs 5,000
SBI Blue Chip Fund - Direct Plan – Growth: Rs 10,000
HDFC Small Cap Fund - Direct - Growth Plan: Rs 9,000

Could you review my portfolio and suggest any corrections or further diversification? I have certain goals associated with each fund. I want to invest another Rs 10,000.
--Lokesh Kunthoor


You are currently investing in two large cap schemes, two tax-saving schemes or ELSS, and a small cap scheme. Investors with moderate risk profile are typically asked to invest mostly in multi cap schemes. They are also asked to invest in large cap schemes if they want to diversify and reduce the overall risk in the portfolio. You are investing mostly in large cap schemes (Rs 21,000) and even your two tax-saving mutual funds have a giant and large cap bias. If you are okay with this, you may continue with your investments.

However, small cap schemes are not suitable to investors with a moderate risk profile. These schemes are highly risky, and they can also be volatile. That is why small cap schemes are recommended only to aggressive investors with a very high risk appetite and stomach for volatility.


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