In the past few posts I have discussed on several aspects of MF investments and also given an account of how my investments in MF has occurred over the years. Many people have wanted to know my current investments in MF, why I have chosen such a portfolio and my investment mechanism in these funds. Let me talk about it in this post.
As I said, we have been doing SIP since 2008 and these have been fairly regular. Over this period, I had given a lot of thought on what would be a good portfolio structure for me and my conclusions were ideally for a 5 fund portfolio, which I have shared with you in an earlier post. In 2013 when I was clear that I wanted to start my own consulting practice by end 2014, I wanted to take a fresh look at my portfolio and fix it for the next 2 years and maybe much longer. The funds I have chosen has been invested in Since December 2013 and the SIP will come to a closure by the end of this year. The idea is to let this investment grow over as long as possible over the next 9 years or so, till I am in the retired stage of life. Even at that point. I may or may not need to redeem this and the earlier MF investments that are in my overall MF portfolio.
I will outline the funds, my reason for selecting them, the performance over this period and my understanding of these and whether I am planning to continue with these after the end of this year. Note that all these funds are invested through Direct plans in the Growth option.
ICICI Pru Value Discovery Fund
- This is the multi cap fund in my portfolio and I have been investing over it for a long time. The main attraction is how the fund manager is looking at newer opportunities to bet on established and little known stocks. More often than not he has got it right and this reflects in the results of the fund over the years.
- During the period of this SIP, the fund has done reasonably well with an XIRR of 41%. Remember that for much of 2014 the markets went up and a standard SIP strategy was not the best way to go about it. Of course, that has been balanced a bit in 2015.
- This is definitely a fund I will continue with in the future.
ICICI Pru Focused Bluechp Equity Fund
- This is the large cap fund in my portfolio and I have also been investing in this for long. I like the fund as it follows the mandate it has well and takes calls on the sectors that have proved to work well. There are other good funds in this space but my vote is for this one for the long term.
- XIRR for this fund over the SIP period is 21%. The rising markets in 2014 has definitely pushed up the acquisition price in this case but the XIRR will improve post the SIP getting over when markets run up higher. Some of its stock picks have not worked well but that will be the case with many other large cap funds.
- Despite the options available in this space, my inclination will be to stick with this fund in my portfolio.
HDFC Mid-cap Opportunities Fund
- This is the mid cap fund in my portfolio and I have also been investing in the fund for a long time. I like the fund as it works within its mandate and tries to look actively for emerging stories. Some of the stock picks over the years have really been stellar.
- XIRR for the fund over the SIP period is close to 40%. The NAV has fluctuated between 19 and 39 Rs and this has obviously affected the purchase price adversely. Even then, the results are quite good.
- There are other good options in this space but I will stick to this one for the long term.
DSP BlackRock Micro Cap Fund
- This is the Micro cap fund of my portfolio and has been a long time favorite of mine. It has an aggressive approach to identify companies that have potential to do well in the future and their success rate has been surprisingly good.
- XIRR for the fund over the SIP period is more than 50%. This is quite astonishing when one looks at the acquisition NAV ranging between 17 Rs and 42 Rs. Goes on to show the strength of their portfolio of stocks.
- I will definitely stick with this and feel that every long term investor must have it in the portfolio.
ICICI Pru Indo Asia Equity Fund
- I selected this fund for exposure to other markets and this was my first investment in it. The fund invests both in India and other Asian countries, thus trying to hedge some of the risks in the markets.
- XIRR for the fund in the SIP period has been 25% which is fairly creditable.
- As the fund has a pretty unique mandate, it is difficult to compare it with others. I will evaluate at the end of the SIP period as to whether I want to go on with it or not.
ICICI Prudential Dynamic Fund
- Investment in this fund was more from a risk mitigation perspective as I was not sure about what directions the markets would take over the next 2 years.
- XIRR of the fund has been 16%, which is fairly good considering the objective that it seeks to achieve.
- I am fairly clear that I will not be continuing investment in this fund after the SIP period is over.
ICICI Pru US Bluechip Equity Fund
- This is the primary international fund in my portfolio. I had invested in this fund earlier and chose this for the decent growth it has shown over the years, trying to balance the risks and the rewards.
- The XIRR of this fund has been 12%, which is not surprising as the US markets have not moved anywhere as much as our markets. Acquisition NAV has fluctuated only between 15.5 and 18.5 Rs.
- I will review the continuance in this fund beyond the SIP period but will probably stick to it.
The portfolio I have created is obviously suited to my needs and I do not recommend that you follow it without understanding all the implications. However, do get the structure of your portfolio correct to see that you are invested rightly for the long term.
In my next post I will talk about why I do not like investing in sector funds or balanced funds.
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