Ask ET Mutual Funds: Am I investing in good mutual funds?

I am a 25-year-old government employee. I am investing Rs 8,000 in mutual funds. My investment horiozn is 20 years or more. I have medium risk appetite and my investments are in: Franklin India Smaller Companies Fund (Rs 1,000), DSPBR Microcap Fund (Rs 1,000), SBI Magnum Midcap Fund (Rs 2,000), ICICI Prudential Value Discovery Fund (Rs 1,000), Birla Sun Life Equity Fund (Rs 1,000), SBI Bluechip Fund (Rs 1,000) and Franklin India Prima Plus (Rs 1,000). Am I investing in good funds? -- Vikash Kumar

Dilshad Billimoria, founder and chief financial planner, Dilzer Consultants, responds: Generally speaking, investments in a combination of small and midcap, multicap and largecap equity schemes will do well over 10 years. Also, there is no one consistent outperformer every year. While making investment decisions, look at risk-adjusted returns and not merely returns. Avoid the herd mentality and calculate XIRR returns on your portfolio to ensure you are on track. Investing for the long term will ensure good returns. However, portfolio rebalancing is important. Stick to asset allocation and add some fixed income or debt as per your risk profile.

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