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Adding value funds can enhance your portfolio


I am investing in the following funds and have considered flexi-cap and large- and mid-cap funds as my core portfolio. I have adequate life and health insurance and also have an emergency fund with link FD.

Mirae Asset Emerging Fund – 2,500

Axis Growth Opportunity Fund – 4,000

Parag Parekh Flexi Fund – 5,000

Edelweiss Recently IPO – 3,000

HDFC Small Cap – 1,500

Canara Robeco Focused Fund – 4,000

Axis Banking & PSU and Edelweiss Balanced Advantage – Lumpsum.

Could you please advise if I need to make any changes to the above funds?All my above funds are growth style and wish to add value style fund.Please suggest a value fund and what is your view on DSP value fund? For international fund, could you please suggest a global fund which is not country/sector specific?


The plan of having flexi-cap and large- and mid-cap funds as the core of your portfolio sounds good from a long-term perspective. The list of funds you are investing in is good. Though some funds you are investing in are launched in the last couple of years and hence they lack a long-term track record. I would suggest you consider the long-term track record of the funds before investing in funds. This helps us understand how the funds have performed across different market cycles.

While you have done the right thing by limiting the investment in small-cap funds, Edelweiss Recently IPO Fund also carries some additional risk as the fund predominantly invests in companies that are recently listed. This investment may happen at a higher valuation and even the holding period can be longer.

Debt Funds and Balanced Funds can work well for you if you are investing in these funds for short- or medium-term needs. If the holding period for your lumpsum investment is long-term, then you may invest in equity funds as you can give more time for the investment to grow.

It is a good idea to add a value fund to your portfolio and you can consider investing around 10-15% of your portfolio in a value fund. DSP Value fund is a recently launched fund and as mentioned earlier we have a limited track record of this fund. Hence, right now, you may also consider ICICI Value Discovery Fund or UTI Value Opportunities Fund where these funds have been through different market cycles. You may continue to have DSP Value Fund under your watchlist and wait for some more time before investing in it. Even Parag Parikh as a fund house follows principles of value investing and hence the element of value investing is there in your present portfolio as well.

As most international funds invest in the US stock market, you can consider Motilal Oswal S&P 500 Index Fund as this can give you a better sector allocation. It is better to limit the allocation around 10-15% in International Funds.

Harshad Chetanwala, founder, MyWealthGrowth.com

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