Indirect Investments.

Not a fan of direct investments into the stock market? You can look at the following mutual fund schemes:

1. Large Cap funds - Should have at least 25% (defensive) to 35% (aggressive) of the total funds allocated towards risk assets
• DSP BR Top 100 Equity Fund - The perfect large cap fund to own. Always features in the top 10 percentile whether a bull or a bear run.
• ICICI Prudential Dynamic Fund - Consistent performer in the large cap space to own. 
2. Mid, Small & Micro Cap Fund - Allocate 20% to 30%  (aggressive) of the total funds
• Reliance Equity Opportunities Fund - They took a hit due to the Reliance ADAG brand  taking a hit but they are back. I think Reliance funds are the dark horses in the pack. 
• ICICI Pru Discovery Fund - Again consistent performance by this scheme. I think ICICI is ensuring that all its flagship funds have a consistent performance and even if they're number 2 or 3 in the pack they'll attract funds due to consistency. 
• DSP BR Micro Cap Fund - The era of micro caps is about to hit us if the bull run is here and I think this fund has ensured that during the bull runs the performance beats any fund in the market.
3. Balanced Funds - Allocated 10% to 8%  (aggressive) of the total funds
• Birla Sun life 95 - Consistent performance and always in the top 10 percentile. Has performed well during bull runs.
• HDFC Balanced Fund - You can pick either this fund or Reliance Regular savings balanced fund.
4. Monthly income funds - Allocate 12% to 10%  (aggressive) of the total funds
• These are pure bull run products and investors can expect a 12% return over the next 5 years.
• Reliance Monthly Income Plan & DSP BR Monthly Income Plan are two funds to own in this category.
5. Gold Fund - Allocate 25% to 15%  (aggressive) of the total funds
• This will not only act as the perfect hedge to the bull run but also the hedge to inflation.
• Like the Kotak Gold fund and HDFC Gold fund in this category primarily due to their brands.
6. Liquid Fund - Allocate 8% to 2%  (aggressive) of the total funds
• Allocate funds under this category as your emergency savings funds. Like the Escorts liquid fund and Tata Liquidity management fund in this category.
• In case you do not wish to allocated 8% of the total funds under this category you can split it as 4% liquid fund and 4% bond fund.

Dark Horse Category:

• DSP BR World Gold Fund - Gold miners fund which has an international exposure.
• Reliance Banking Fund - One sector that should enjoy the bull run without any major risks.
• Reliance Pharma Fund - Another sector fund to have a part of your portfolio.

Please note that the total funds allocated should depend on your age and risk taking capacity but once you've zeroed in on it, you can use the allocation mentioned above to ensure enough diversification.

Do share your thoughts on dewang@denip.in

Thanks,

Dewang K Mehta

DENIP Consultants Pvt. Ltd.