Fund Portfolio: High returns at moderate risk
Go ahead and choose the portfolio that best suits your needs.
By Faye D’Souza, |
Mutual fund investors often wonder how many and what type of funds they should buy. ET Wealth presents five fund portfolios to suit different sets of investors. These portfolios have been designed by Value Research for our television channel ET Now. Every week, we will analyse one portfolio in detail and provide an update on the rest. Go ahead and choose the portfolio that best suits your needs.
‘I want regular growth’ Fund
This portfolio has been able to generate decent returns without taking undue risks. Even the equity portion is invested in stable stocks. The five equity funds in the portfolio have a decidedly large-cap focus. More than 80% of the equity corpus is anchored in giant and large-cap stocks, which means the portfolio will not be rocked during market upheavals.
The balance 19%, the “risk capital” of the portfolio so to say, is invested in mid- and small-cap stocks. This portfolio is betting big on the banking and financial services sector. The sector accounts for nearly 21% of the corpus in equities. In fact, the top two holdings of the portfolio are banks. The energy sector accounts for another big chunk of the portfolio. Incidentally, the allocation to the construction sector is down to 2.7%.
This portfolio has been able to generate decent returns without taking undue risks. Even the equity portion is invested in stable stocks. The five equity funds in the portfolio have a decidedly large-cap focus. More than 80% of the equity corpus is anchored in giant and large-cap stocks, which means the portfolio will not be rocked during market upheavals.
The balance 19%, the “risk capital” of the portfolio so to say, is invested in mid- and small-cap stocks. This portfolio is betting big on the banking and financial services sector. The sector accounts for nearly 21% of the corpus in equities. In fact, the top two holdings of the portfolio are banks. The energy sector accounts for another big chunk of the portfolio. Incidentally, the allocation to the construction sector is down to 2.7%.
HDFC Top 200 Fund and UTI Dividend Yield Fund have been the best performing funds in this portfolio with annualised returns of almost 30% since we began investing in June 2009. Given that 15% of the portfolio is in debt, any downturn in the equity market will allow us to rejig the asset allocation accordingly.
The high quality of debt holdings of the portfolio is also heartening. With almost 10% in sovereign bonds and highest rated P1+ and AAA bonds comprising more than 50% of the debt holdings, you can be sure there is very little risk of default.
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