Which mutual fund scheme should I add to my portfolio?

I really like the idea of investing and enhancing wealth. I am new to investments and I have no experience. I have created a portfolio to start my investment journey. My investment horizon is 15 years and diversity is the key attribute (unless you think so) for me. Please review my portfolio.

Funds
1. Objective - tax saving
PPF: Rs 8,334 per month
Started in 2014

HDFC Taxsaver Fund - Regular (D): Rs 5,000
Started in October 20, 2017
Duration: 15 years
Market cap: Large

2. Objective - Long term and sectoral
L&T Infrastructure Direct (G): Rs 5,000
Started in April 14, 2018
Duration: 15 years
Market cap : Mid

3. Objective - Long term and Diverse
Invesco India Contra Fund Direct (G): Rs 5,000
Started - Not yet
Duration - 15 years
Market cap - multi

Reliance Small Cap Fund Direct (G): Rs 5,000
Started - Not yet
Duration - 10 years
Market cap - small

Sector break down
I am only considering sectors which have a share greater than 5 per cent in the fund.
> HDFC Taxsaver Fund
Construction (10%)
Energy (25%)
Financial (27%)
Technology (8%)

> L&T Infrastructure
Communications (9%)
Construction (39%)
Energy (19%)
Metals (15%)

> Invesco Contra Fund
Automobile (10%)
Construction (7%)
Energy (9%)
Engineering (7%)
Financial (26%)
Healthcare (7%)
Technology (11%)

> Reliance Small Cap Fund
Chemicals (13%)
Constructions (11%)
Engineering (14%)
Financial (8%)
FMCG (15%)
Technology (6%)
Textiles (6%)

I am open to making feasible changes to my portfolio. So please don't hesitate to suggest something new. I probably can invest in one more fund. So, if someone have a good suggestion, then please let me know.
-- Anurag Bisht

Rishabh Parakh, founder, Money Plant Consultancy, responds:

Apart from tax-saving funds, you have invested Rs 5,000 each via SIPs in L&T Infrastructure, Reliance Small Cap and Invesco Contra Fund. Your current investments have relatively higher risk because it has one smallcap and one sectoral fund (infrastructure fund apart from a contra fund which is a multi cap).

I am sure you must be aware about the inherent risk of these categories, though in the long run these funds have a greater potential to generate higher returns. But in case of any bearish phase in the market, smallcap and sectoral funds will be hit hard. Questions you need to ask yourself are whether you can take the risk, does this portfolio suit your risk profile, etc. I suggest that you to do a comprehensive financial planning and link your investments to your goals. And based on that take a call on whether to change the current portfolio or not.


In case you want to cut down the risk in the current portfolio, you can change one of the smallcap and infra fund to a largecap and another multicap fund. Alternatively, as you wanted to add one more fund, you can go for a pure largecap fund to bring more stability to your current portfolio.

Another important point is about your PPF investment and the money you are investing in it. With the current portfolio, your allocation to PPF seems okay, as it gives you a cushion against the potential risk. But once you do your financial planning, you may want to increase allocation to ELSS funds than PPF. Take a call after a thorough review of your goals.