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An ideal mutual fund portfolio (Indian market specific) – revised in Jan 2010

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Based on the past experiences here are some tactics and re-balancing tips.

Tactic 1:  Book profits

  • Book profits and switch from Equity funds to liquid funds in short term.
  • Transfer units from liquid funds to Equity funds when market nose dives.
  • Set a realistic targets and book profits (even if paying the load is necessary).

Tactic 2: Re-balance portfolio

The new recommendations (unless otherwise stated, all funds are considered to be Growth Plan):  Based on August 2009 research.

My suggestion is to hold on to this folio for next 3 years and re-evaluate.

  • Large-cap fund: Franklin Bluechip
  • Multi-cap: HDFC Top 200, IDFC Premier Equity Plan A, Reliance RSF – Equity
  • Blend: HDFC Prudence
  • ELSS: HDFC Tax Saver – Dividend Payout ONLY (to avoid getting locked for another 3 years)
  • Index: HDFC Index – Sensex Plus
  • Liquid: HDFC Cash management Fund

NOTE: All funds performance were evaluated on 5 year performance track period, also considering the slump period of 2007-2008.

My personal choice of portfolio allocation:

Large-cap (40%)

Multi-cap (30%)

Blend (30%)

Tactic 3: Look into different avenues

  • Real-estate is down by at least 20% enter there and stay for few years
  • Look for a business opportunity and invest into it, start or become a partner in a venture 🙂

Think big, go small by small; and happy investing.


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