How to reduce the number of funds in your portfolio | Earn more by having the right no. of funds
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- Опубліковано 12 чер 2024
- It’s common for investors to have more schemes in their mutual fund portfolios than required. Some investors may have even 20-30 funds. The problem with too many funds is that they are difficult to manage, they pull down your portfolio returns and your portfolio becomes index-like.
There are several reasons why investors end up with more funds than needed. The most prominent ones are chasing performance, being mis-sold funds, overexcitement, lock-in period in some funds, among others.
How many funds should you have? Six-seven funds are more than enough for adequate diversification. To reduce the number of funds in an investment portfolio, you can apply the following strategies:
1. Assign weights to your funds: Consider exiting funds that have less than 5% weight in your portfolio and in which you have stopped investing.
2. Exit the underperformers: Use Fund Report Card on the ET Money app for that.
3. Exit duplicate funds: If you have multiple funds of the same type, you can exit the less desirable ones based on performance, volatility, etc.
4. Review funds from the same fund house: Such funds can have portfolio overlap. Assess if they do. If yes, consider exiting some of them.
5. Exit sectoral and thematic funds: Such funds can be riskier as they focus on a particular theme or sector. Go for diversified funds. You can watch a detailed analysis of these at
• Avoid these Mutual Fun...
6. Check the number of debt funds: Debt funds are needed for parking your emergency corpus or as the debt component to rebalance your portfolio. Just liquid (or arbitrage funds) and short-duration funds can do the job.
7. Prepare a model portfolio: How would you prepare a portfolio if you were starting now? Use this model portfolio to analyse your existing portfolio.
8. ET Money Portfolio Health Check: This tool on the ET Money app can highlight what’s wrong with your portfolio.
Chapters
00:00 Introduction
01:31 Why Do Investors Have Too Many Funds?
02:32 The Problem Of Plenty
05:20 How Many Funds Should You Have?
06:43 Strategies To Reduce Number Of Funds
17:21 Conclusion
Detailed clear explanation for one who is building their portfolio or needs to change their portfolio.
Hello, thanks for liking the video. Stay tuned for more such insightful videos.
Thanks a lot for explaining this topic in Detail.. will follow this for restructuring my portfolio
Hello, nothing excites us more than being helpful to our viewers. We really hope that you will be able to fine-tune your portfolio with the help of this video.
Very useful information about investment in MFs and more younger people will come to market, well done thanks 🎉
Excellent video. Good presentation. Thank you so much.
My suggestion. 3 MF Large & Mid Cap- 50%, Flexicap- 40% and Smallcap- 10%.
Thank you very much sir for this informative video. I am your ET money Genius members, so I need not have to worry.
Much needed. Simplified and we'll explained
Hello, we are happy to know that you found this video useful. Do share it with your friends and family as well. Stay tuned for more such insightful videos.
Hello @ETMoney,
Why is Navi ELSS Tax saver Nifty 50 Index Fund not available in ETMoney?
What are your views on Multi asset fund of funds category
Very useful video...
If we exit a poor performance fund now and can we re-invest in better performing fund even when markets are at ATH?
Thank you very much.....
Hello, you're welcome. Please share it with your friends and family.
This is a very important video. I urge ET Money to consider bringing in SWP option on its platform which can facilitate reduction of portfolio size. Your competitor GROWW has that facility
Hello, we are happy that you found the video helpful. Thanks for you suggestion. I will forward it to our management team.
I've switched to groww the application is buggy slow and literally advertises at everything step
I recently had a doubt regarding the ideal diversified portfolio or how many funds are enough to have an ideal diversified portfolio. This video comes at the right time and provides me good clarity. Thanks!
Hello, we are happy to know that you found this video helpful and it solved your problem. Thanks for watching. Do share it with your friends and family and helps us reach more people.
@@ETMONEYણણ્યણણ્યણણણ્યણ્યણણ્યણ્યણ્યણણણ્યણણ્યણણ્યણ્યણ્યઅઃણણ્યણણ્યણ્યણણ્યણ્યણણ્યણ્યઅઃણ્યણ્યણણઅઃણણ્યણેઘ ખૂબ ુુ
Nice 👍
Very useful video. I am diversifying my portfolio with ETMoney after watching this video.
Hello, we are happy to know that you liked the video and that you are using ET Money. All the best.
👍
Good concise presentation
Hello, thanks for liking it. Please share it with your friends and family.
It is one of the best educational video I have observed
We are glad you found this useful. Do share it your friends and family and help us reach more people.
I'm working dubai ,I have pancard , I can use Et money app? Please reply
Useful.
I have taken genius membership from ET money but what they suggested is take a fund for large, mid and small cap fund from same nippon fund house. But here they are saying not to take from same fund house. Some percentage on debt and gold fund, i personally feel that its better to invest in fixed deposit rather debt.
Your Videos are Crystal clear, with facts and figures ang highly professional
Brilliant video and so nicely presented without any drama
Glad you liked it
@ET money team. Can you share how to identify growth and value strategy in mutual funds?
Hello, this is the ET Money UA-cam channel. I will forward your suggestion to the content team. Stay tuned.
Hello Rajat/ ET Money Research team, I have had a good thought on the suggestion that if someone has more than 6 funds, possibly he/ she has too many funds. It might sound promising but an investor who has 60:40 Eq: (Dr+Commo) asset allocation, should he really invest 30%-40% of money in one debt fund (concentration risk)? Why not keeping few all weather flexicaps? Reducing MFs mindlessly may impact the shape of one's portfolio overnight. If one is too particular about number of MFs and minimalism - why not invest in 2 or 3 good aggressive hybrids and that's about it?
Thanks for your comment. This video is a general guide to help investors fine-tune their portfolios. The idea is to help them with the basics. There are numerous ways to build a portfolio, depending on investors' risk appetite, goals, investment horizon, preferences and experience. There is no 'one way' or 'the right way' to do it.
What about sectors funds
Thank you sir
Hello, you're welcome and thanks for watching. Stay tuned.
Are balance advantage funds good choice for lump sum ?
Hello, balanced advantage funds look at market conditions and adjust their equity-debt mix. So, they can be a good option for investing lump sums. While investing in them, you need not worry about market levels.
for 10 lac i have 15 fund of different amc and sector is it wise
@@anandkharat6700 I got 14 😁, may be because if I sell than I have to deal with tax. But my advice will be to learn more and then try reducing them, if you like
You might want to reconsider the advise of asking people to sell off funds following similar benchmarks. The performance of funds across fund houses differ by a few percentage, better to split the capital for that benchmark across few AMCs of similar fund. I won't name the fund houses here which will look like endorsement, best you use the app to see the difference in performance
Hello, this video is a general guide to help investors fine-tune their portfolios. So, feel free to pick/drop points based on your individual requirement. Every portfolio is unique and as an investor, you would better understand it, given your preferences and risk appetite. There is no one right or wrong answer.
fully agree, we dont know next 3 years which small cap fund do well, but if you take the best 2-3 small cap fund, you for sure get the average return and thats a better startegy than guessing a best fund. for eg Kotak emerging fund, going down and now I have to diversify, 10 years back hdfc top100 was better, it underperformmed long years and now back, so better to diversify fund house, It does not do any harm though NO benefit.
I sold 6 mf out of 17 fumds after watching this video... thank u... right video at right time
You sold the MFs when the market was closed!!
@@Avi-Bhatta placed sell orders... they'll execute tomorrow... unlike stocks we can place sell order for mf at any time
Hi, we are happy to know that you found this video useful and the points discussed in it actionable. Glad to know that you have started to streamline your portfolio already. Thanks for watching, and stay tuned for more such insightful videos.
It's not sold. It is called redeemed
I have added 3 funds just for tax savings in last 2 years.
Should the logic of having less number of funds apply to this case as well.
Because all three of them served a different purpose and before investing I checked for least over lap between those three
Hello, thanks for your query. In this video, we have given a general guideline on reducing the number of funds in your portfolio. However, we appreciate that all portfolios are unique and the investor managing them understands them better, given his/her requirements. So, there can be no strict rules. If you have thoughtfully picked the funds, you can very well continue to hold them.
@@ETMONEY thank you
It is easy said than done
Hello, maybe yes, but it's worth trying as it can substantially boost your returns and lower the managing work.
@@ETMONEY I was just trying to highlight that the performance of many funds goes down from 5star to two star/ one star. In that situation one think of adding one better performing fund. Now in case one have substantial amount in that fund then one think twice before redeeming poor performing funds for the reason of capital gain. It also happen that poor performing fund may improve performance after one or two year. For example Axis focused 25 fund. Earlier it used to be 5 star and now one star and performing poorly to its peers. I had the dilemma what to do. Whether to continue holding or redeeming. I also had the pleasure to listen a analysis from one of your colleague on the subject of o performance of similar funds ovar a long period 15 yrs or so and conclusion was there are not much difference in performance ovar long period. In the circumstances it is not easy to follow the recommendation as suggested.
I have 2 Flexi cap funds 1 mid cap fund 1 small cap fund for goals & 1 liquid fund for emergencies.
Hello, it's great to see that you have a small portfolio already. Keep it up.
@@ETMONEY Thank You 🙏😊
Currently I have SIP in..
Axis Growth Opportunity
Axis Midcap
Axis Smallcap
Parag Flexicap
Mirae Emerging Bluechip
Now I am considering to opt below,
Quant Midcap
Quant Smallcap
Quant Flexicap
Nippon Smallcap
PGIM Midcap
Question is, can i follow my current funds or switch? Out of these 10, which 3 or 4 fund should i shortlist? Kindly help.
Hello, thanks for your query. While we can't comment on your individual funds, you can very well use the ET Money app to use tools like Portfolio Analysis, Fund Report Card and Portfolio Health Check. These tools will help you decide which funds deserve your money.
You mention diversification and that a minimum 5% for any given mutual fund to make a significant difference to returns. What is the maximum percentage one should allocate to any single diversified equity fund in an equity portfolio? What are the risks associated with it? For instance it may differ for a large, mid or small cap fund. Could you please comment.
Hello, thanks for your query. There is no hard and fast rule as to how much you should allocate to one fund. If you have just one fund in your portfolio, it's 100% allocation. If you have 6-7 funds, then it's 14-16% allocation on average. As we said in this video, more than these many funds are often undesirable. As far as allocation to mid/small-cap funds is concerned, it's better to see it at the portfolio level rather than at the fund level. If you have a high risk appetite, you can allocate up to 30% of your portfolio to mid/small-cap funds.
@@ETMONEY My question was "What is the risk associated with (a) Having too much allocation like 50% to a single fund? (b) The risk associated with too many funds of one single AMC.? You could take the specific case of a fund house like Axis as a case study for the period 2018-2021 and 2021 till 2023. This is not to run down an AMC or specific funds within it.
Plz suggest good funds for time period of 10 years..my investment is 20k monthly..
Hello, we understand that you want us to help you with portfolio building. While we can't give you fund recommendations, you can use ET Money Genius on the ET Money app. Genius suggests funds to you as per your requirements and also helps you rebalance your portfolio from time to time. You can also use the Fund Report Card on the ET Money app to check how good a fund that you are looking to invest in is.
Sectoral funds are good if you know what you're putting your money into.
Would you please let me know the expense ratio of Genius portfolio balanced+ direct growth scheme? Is there any review and rebalancing charges? if yes then give all details
How much percentage of overlap of two funds should be avoided
Hello, while there is no strict rule, a general guideline is the more the overlap, the worse it is. Perhaps, an overlap of 50% or more would be undesirable.
why need to exit a underperforming fund and pay capital gain tax ..... when we can do a STP ? i thought doing a STP within the same fund house is not a redemption of fund ..do enlighten
STP also considered as redemption even within AMC
Hello, an STP is nothing but redemption from a fund and investment in another. On redemption, you will have to pay capital gains tax, if applicable. So, it doesn't matter that you are doing so within the same AMC. Hope this explanation helps.
@@Karthik1995 Hello, thanks for your response and for assisting your fellow viewer.
Hi AMFI ..this is not fair 😜 STP should be made tax free .. I move the fund from a fund to another fund and when I finally redeem when my goal is achieved , I am going to pay tax .. now it looks like I am taxed twice
Amazing ideas shared in a very structured way Hats off to you & the team behind the research.
Hello, glad to know that you liked the video. Do share it with your friends and family.
Why Bank of india small cap fund is not included in ET-MONEY APP 😢
Hello, you will be able to invest in Bank of India's schemes from next week onwards. At present, we offer schemes from 29 fund houses. We continue to expand partnerships with AMCs to provide more options to investors.
I have 3 fund
Sip
1) ppfas flexi cap
2) sbi small cap
One small Lumpsum
1) quant small cap
Hello, wonderful to know that you have kept your portfolio size manageable. But since you have two small-cap funds, please ensure that this portfolio is as per your risk appetite. Small-cap funds are more volatile than other diversified equity funds.
This is my portfolio:
1 large cap index fund - 25%
1 Flexi cap fund - 25%
1 mid cap index fund - 12.5%
1 mid cap active fund - 12.5%
2 small cap active funds - 25%
Personally I don't believe in debt funds as govt schemes like EPF, PPF, NPS, SSY generate better returns than debt funds any day under the sun and also tax free.
The goverment funds have a long lock in period. One of the key points of asset allocation is rebalancing assets. This is to ensure you are buying low and selling high. Just curious to know what's your strategy on rebalancing if you are keeping the debt parts on govt instruments.
Same my portfolio ...
1. 1 Large cap index - 16%
2. 1 Flexi cap fund - 16%
3. 1 small cap active - 16%
4. 1 mid cap active - 16%
5. 1 mid cap index - 20%
6 . ICICI pru equity and debt fund - 16%
@@samarjitsaha6028 love to know one thing why do you invest more in mid cap and less in small cap, is it due to risk factor or any other insight that you like to share.
As a investor who is just about to start my journey your valuable suggestions will help me alot
I have flexi cap, mid cap and small cap mutual funds and large cap stock's
I get rid of some underperforming funds to reduce the number of funds in the portfolio.
There are still duplicates in my portfolio but the investment amount of such funds are quite big, so I couldn't courage to redeem it by paying tax to reinvest in it's peer.
Hello, we understand that it's not easy to make changes in a long-term portfolio overnight. We are happy to know that you have already started cleaning up your portfolio. We hope that over time, you will be able to streamline your portfolio.
You can do it step by step. Redeem a portion of amount at a time.
Same I did yesterday..
Hello, we are happy to know that you have already started to clean up your portfolio. Wishing you the best.
2000 rs kyu mangte h yeh 29 likh ke
No Audio
The problem is we are not sure while starting a SIP we are not sure which scheme to pick. Hence, we end up investing in multiple funds😅
Hello, thanks for sharing your perspective. I will forward it to the content team and we can explore if we can do a video around picking the right fund. Thanks for watching.
I have 34 MF SIPs currently, investing Rs. 19,750 (in total) every month.
Hello, that looks like far too many. You might want to bring it down. Hope this video will help.
Perhaps you should change 34 into 43.
@@iamintopgear 😂
Good job sir, I was invested in SBI SMALL CAP FUND(2000 EveryMonth), SBI FOCUSED EQUITY FUND(5000 Every Month), PARAG PARIKH FLEXI CAP FUND, AND KOTAK EQUITY EMERGING FUND (Daily 1000 STP from it's liquid fund) so please suggest me about portfolio. I Request you to Upload video for NPS Scheme in Hindi Language.
Hello, glad to know that you liked our video. Please share it with others as well. Have taken a note of your request on an NPS video in Hindi. Will share it with our content team. As far as your query is concerned, unfortunately, we can't comment on your individual portfolio. But you can use the ET Money app to analyse your portfolio. We have tools like Portfolio Analysis, Portfolio Health Check and Fund Report Card that you can use. Just map your portfolio on the ET Money app in a few simple steps and get actionable insights into it.
We ought to do
Hello, yes, absolutely. This simple act of cleaning up your portfolio can ease the managing work, boost your returns and free up your time. Thanks for watching.
I sold 30 + mutual fund scheme.but i want to reduce.I want to keep maximum 10 mutual fund.plese guide me
Hello, good to know that you have embarked on a massive clean-up your portfolio. While we can't advise you on a personal basis, you can use the tools on the ET Money app, such as Fund Report Card, Portfolio Health Check and Portfolio Analysis, to decide.
Please review my portfolio:
1) Kotak Bluechip Fund
2) PGIM INDIA Midcap Opportunities
3) Axis Small Cap Fund
4) Parag Parikh Flexi Cap Fund and
5) Nippon India US Opportunities Fund
Since 2019, each fund has been running 2000 SIPs.
What is the return of interest?
Hello, thanks for your query. Unfortunately, we can't comment on your individual portfolio. However, you can check the Fund Report Card of these funds on the ET Money app or website. Plus, you have a host of other data available on these funds on the ET Money app and website, based on which, you can assess their quality. Just type in the names of these funds in the search bar. You can also map your existing portfolio on the ET Money app and use Portfolio Health Check to find out what's good and bad with your portfolio.
Please sir review my mf portfolio
1. Axis growth opportunity
2. Axis Small cap
3. ICICI prudential Technology
4. Kotak manufacturing India
5. Mirae Asset Global x Artificial intelligence ETF FOF
Hello, thanks for sharing your portfolio details. However, we can't comment on individual portfolios. But you can use the ET Money website and app to check the report card of these funds. You can also check your portfolio health by mapping your portfolio on the ET Money app or website. Hope these will help you assess your portfolio.
First view
Hello, congratulations to be the first viewer of this video. We sincerely hope that you will eagerly watch our forthcoming videos as well. Thanks for watching.
i had 10. Now i have 4
Great news! Good to know that this video was useful to you. Please help spread the word by sharing it with others as well.
👍
Just went from 17 to 6 and then the video was suggested to me 🙄
👌🙏🙏🙏🙏
Theoretically fine. Practically trash.
If you are so confident namr a few perpetual better performing schemes. Nilesh Shah from Kotak says all schemes go up & down
Hello, it's true that all schemes go through good and bad phases. So, you should regularly review your portfolio and if any scheme has been underperforming for two or more years, you can replace it with a better-performing one. However, you should avoid having too many schemes at a point in time.
Less is more 😂
Hello, well said.
Exiting sectoral or thematic funds entirely is the biggest mistake you will ever make. The better option is to keep yourself updated about sectors and learn to switch at the right time. It's not that difficult, but will make a huge difference to your overall returns.
Hello, every investor is different and not everyone can take a call on sectors/themes. If you are able to do it profitably over time, it's good. But our guidelines are meant for the general retail investor, who may find it difficult to time their entry and exit.
Which are best sectors now
Bfsi
Two small cap Axis and Kotak
Two flexi cap Parag Parikh, PGIM
One nifty index fund HDFC sensex
One mid cap SBI Magnum
Am I right
Hello, thanks for sharing your portfolio. While we cannot comment on your individual funds, the number of funds in your portfolio looks fine. To check if these funds are good enough, you can use the tools on ET Money app, such as Fund Report Card, Portfolio Analysis and Portfolio Health Check.
@@ETMONEY
I am using genius plan since beginning but you aren't reviewing fund individually.
You won't believe the number of funds I have in my portfolio. Lol. it's embarrassing tbh. 🙈
Hello, never mind. Hope this video will help you realign your portfolio.
AMCs working hard to make more MFs to satisfy your needs 😂
I have invested in total 5 schemes and even that seems to be a high number to me 😅
Hello, true, as we suggested in this video, even one scheme is enough if it solves your purpose. Thanks for watching.
I have to needed etmony customer support no.i faced some problem please help me
Hello, we understand that you want to contact us. Please visit www.etmoney.com/help. Here you can also raise a ticket and our customer service team will get back to you.
etMoney app, wake up. unable to withdraw from your app,support team not botherd to respond