Can I start investing in technology or IT funds?
I am investing in the following mutual funds:
Mirae Asset Large Cap Fund: 12.5%
Axis Bluechip Fund: 18.75%
Axis Small Cap Fund: 18.75%
Mirae Asset Equity Allocator Fund of Fund: 25%
Axis Flexicap Fund: 25%
I am investing in these funds for the last 13 months and time horizon for investment is around 10 to 15 years.
Please suggest if any modification is needed. I am planning to switch towards technology funds (is it a good idea?) Total investment is R 16,000.
-Vivek kumar
Shifali Satsangee, founder, Funds Ve’daa, a mutual fund distribution firm, responds:
We do not have an idea about your age, risk profile and the corpus you want to achieve at the end of 15 years.
Having said that, we observe that your core portfolio (with exposure to flexi cap and large cap schemes, ETFs covering the large and mid cap space) has a heavy large cap tilt. While you do have some small cap exposure as part of your peripheral portfolio, it would hold you in good stead to add some international exposure for geographical diversification ( if and when these schemes accept fresh subscriptions or via the ETF route) and a mid cap scheme if it is in sync with your risk orientation, since you have a long time horizon in place.
Also, spreading your investments across schemes from other AMCs would be prudent for a true sense of diversification as we see, approximately 78% of overlapping positions in the underlying portfolios of Axis Bluechip and Axis Flexicap even though both are good schemes.
Sectoral funds like IT are usually added as part of the satellite/peripheral portfolio. Our belief is that the maximum one should allocate to sectoral funds should be a maximum of 10 percent in the overall portfolio due to the risk they carry. Again, investing in sectoral funds should be done depending on your risk profile.
Gloss