Ask ET Mutual Funds: Should I change my mutual fund allocation?

I am 29 years old. I have been investing in mutual funds for some time. I would like to optimize the same. My monthly take home is Rs 70,000 of which Rs 30,000 goes in mutual funds. I have given the list of my mutual fund investments below. I have tried to keep a mix of hybrid, growth and ELSS. Kindly suggest if any changes are required in my approach of investing.

Birla Sun Life Midcap Fund-Growth-Direct: Rs 1,500
SBI Magnum MidCap Fund - Direct Plan - Growth: Rs 2,000
SBI Bluechip Fund - Direct Plan - Growth: Rs 2,000
Franklin India Smaller Companies Fund-(G): Rs 1,500
Kotak Emerging Equity Scheme: Rs 1,500
Kotak Select Focus Fund: Rs 2,000
ICICI Prudential Balanced Fund: Rs 2,500
HDFC Balanced Fund (G) Rs 2,500
Birla Sun Life Balanced 95 Fúnd: Rs 2,500
Franklin India Balanced Fund: Rs 2,500
Franklin India Taxsheild: Rs 2,500
Birla Sun Life Tax Relief '96-Growth-Direct- Rs 2,000
ICICI Prudential Long Term Plan- Rs 2,000
HDFC High Interest Fund - Dynamic Plan: Rs 3,000
--Ronnie Enid

Ankita Narsey, a mutual fund advisor, responds:

Overdiversification does not help in improving returns. In your case, you have same category of funds across various fund houses. I would like you to stick to four to five schemes across various categories.

• SBI Magnum Midcap Fund - Rs 4,000

• Kotak Select Focus - Rs 5,000
• Franklin India Smaller Companies Fund - Rs 4,000
• HDFC Balanced Fund - Rs 7,000
• BSL Tax Relief Fund - Rs 7,000
• ICICI Prudential Long Term Plan - Rs 3,000

I have given a consolidated portfolio based on your current allotment across various categories of funds. Do consider staggering your ELSS investment of Rs 1.5 lakh per annum by increasing your allotment in ELSSs for maximum returns on your tax saving investments.

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