Ask ET Mutual Funds: Is my asset allocation right?

I want to invest Rs 30,000 per month (approximately) and have shortlisted some funds: DSP Tax Saver Fund, Axis Long Term Equity Plan, DSP BlackRock Micro Cap Fund, Franklin Smaller Companies Fund, Principal and SBI Blue Chip Fund, Birla Sun Life Top100 Fund, Birla Sun Life MNC Fund, BSL Equity Fund, BSL Banking Fund, L&T India Value Fund, Kotak Emerging Equity Scheme and Kotak Select Focus Fund and SBI Magunum Mid Cap Fund. I am thinking of investing Rs 5,000 each in DSP Micro Cap Fund and Franklin and would invest Rs 2,000 or 1,500 in rest of the funds. Please suggest what should I do? My investment horizon is five to 10 years.

--Hemant Sharma

Abhay Shaha, Certified Financial Planner, responds:


Your investment horizon is five to 10 years which is long term and good for investing in equities. Coming to the funds that you have chosen, diversification is good, but over diversification is not. Too many funds will be difficult to manage and may also hamper your returns.

I will advise you to go for:

Banking - ICICI Pru Banking & Financial Services,

Infrastructure - Kotak Infra & Economic Reform Fund

Small Cap - Reliance Small Cap Fund

Mid Cap - Mirae Asset Emerging Blue Chip Fund

Multi Cap - Kotak Select Focus Fund

Large Cap - Mirae Asset India Opportunity Fund


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