Portfolio cleanup advice

POSTED BY kkk ON December 25, 2012 9:27 am COMMENTS (5)

 I have a portfolio of mutual funds of worth 69Lakhs after the SIPs for December month were done. I invest another 50K as part of SIP though with December all my active SIPs are over. I will be continuing the SIP by initiating new SIPs of same amount. As of now around 70% of my protfolio is debt and the rest in equity (Assuming 65% equity for balanced funds and 20% equity for other hybrid plans). My target is to have a 50:50 debt,equity proportion as I am not comfortable with more equity. I made a plan of maintaining the following portfolio.
10% each in HDFC top 200 and ICICI discovery, 15% each in HDFC prudence and Reliance RSF balanced and 25% each in Reliance MIP and HDFC MIP – LTP.
This gives around 50-60% in equity and 40-50% in Debt for me. I am thinking of transfering all my funds to direct investment plans from January. So I will initiate new SIP in this proportion once the situation for those plans gets clear and I will transfer my exisiting portfolio in this proportion by redeeming and investing at a shot if and when they get redeemed (in case of FMPs) or turn into long term investments. For the new SIPs, I will create in this proportion from the begining.  Can you give comments on my plan?
My existing portfolio is HDFC top 200 – 1.75%, ICICI discovery – 4.5%, BSL div yield and UTI div yield – 1.75% each, HDFC prudence – 10%, Reliance RSF Balanced – 6.5%, Reliance MIP – 12%, BSL multiple yield – 17%, HDFC high interest – 3%.
One HDFC 1120D FMP (maturing in June 2015) – 15%, One Reliance FHF XIX series and Reliance Dual advantage FTF series J – 13.5% each maturing in May 2014. (The percentages are approximate so may not add upto 100).

5 replies on this article “Portfolio cleanup advice”

  1. Ramesh says:

    1. 50:50 asset allocation is good enough. Most important thing is your own satisfaction. Later on (say every 5-10 years or so), you can modulate the things.

    2. direct plans are ok, but not yet clear. Anyways, it will be better if you can select 1 equity and 1 debt plan from 2AMCs which you can trust. Since, for direct investing, you will have to go to the AMC directly. Then having 5 diff AMC funds will be problematic to maintain.

    3. Do not go with hybrid plans (either equity or debt oriented), since they complicate your asset allocation thing. An equity and a debt plan from a single AMC will help you re-balance whenever you want to. I would suggest Franklin and HDFC AMCs. Quantum AMC already gives you the Direct Investing benefit, so that can also be considered by you.

  2. kkk says:

    I am not comfortable with more than 50% equity and as on now I dont even have 50%. Most advisers I met told me for my age and earning capability I should have 80-90% equity. Compared to that 50% is way less 🙂

  3. kkk says:

    Thanks for the advice and I got the point behind what you are saying.
    By the way 69lakh is not 30% of my portfolio but entire mf portfolio (you can even say my networth as my house turned out to be a dud investment and dont want to touch PF till I actually retire). Out of 69L around 30% equity funds and 70% debt funds.

  4. ps. your statements are contradictory
    you say you have 30% equity and want to increase this to 50% but you say you are not comfortable with equity

  5. you approach of rebalancing your portfolio by decreasing equity comp is overall correct. However:
    A person with 69 lakh MF porfolio which just constitutes only 30% of his portfolio should not mind spending just a few thousands as fee to a certified financial planner.

    Advice in this forum is generic. Your situation is too complex and specific with details about why you are investing when you need money etc. missing.

    So best would be to seek a financial planners advice. With such a large kitty you should not make mistakes either by yourself or by taking generic armchair advice in a forum like this.
    Please seek professional help Compared to your networth the fee is a pittance..

    You can approach Manish himself for this

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