I hold the following funds, invested over the past five years in systematic investment plans (SIPs) as well as lumpsum: Fidelity Equity, HDFC Top 200, HDFC Equity, HDFC Growth, HDFC Long Term Advantage, HDFC Tax Saver, Magnum Comma, Magnum Tax gain, DSP BR Balanced, DSP BR World Gold, IDFC Premier Equity, Reliance Growth, Reliance Diversified Power Sector, Reliance Pharma and Banking funds, Canara Robeco Balanced and Canara Robeco Infrastructure. The current value of the above is Rs 15 lakh.

I am now investing Rs 33,000 monthly over the past one year in the following funds. SIPs of Rs 5,000 each in DSP Blackrock Balanced, DSP Blackrock World Gold Fund and HDFC Top 200. Systematic transfer plans (from liquid funds) of Rs 8,000 in HDFC Growth, Rs 5,000 in IDFC Premier Equity and Rs 5,000 in Fidelity Equity.

I am 35 and plan to accumulate Rs 1 crore in 10 years. I can save up to Rs 50,000 a month. Please suggest changes, if needed. — Mukunth

You have not stated whether you can stomach some risks. But given that you have a sizeable surplus for investing and have a 10-year time frame, you need not subject your portfolio to undue risk. This means you can cut down on relatively risky theme funds. You can also do with a more compact portfolio that will provide sufficient exposure to various fund strategies.

Let us first downsize your portfolio. We suggest you hold HDFC Top 200 and HDFC Growth and do away with the other HDFC funds. Please note that they have all done reasonably well. We only want to avoid concentration in one fund house and also avoid duplication. Exit Magnum Comma. It is an underperformer. Besides, the option to play the commodity theme is limited in the Indian equity context. Exit Magnum Taxgain. It has delivered only 4 per cent annually over the last five years. Retain IDFC Premier Equity. Switch from DSP BR Balanced to HDFC Balanced. Hold Canara Robeco Balanced. If you are holding Reliance Growth for an exposure to mid-cap stocks, you can switch to ICICI Pru Discovery. Reliance Growth is no longer a pure mid-cap fund. Besides, its performance has slipped in recent years.

Theme funds

Reliance Diversified Power Sector fund is too risky, given the volatility in the capital goods cycle. It has to be actively tracked. We suggest you exit it. While Canara Robeco Infrastructure is among the better performers in the infrastructure theme, there are too many extraneous factors that affect the performance of stocks in this space. You can do without the fund.

Reliance Pharma has delivered exceedingly well as the theme was seen as a defensive play in the last couple of years. But the risk applicable to other theme funds holds good for this scheme too. We suggest you book some profits in the fund and hold your capital in it only if you can monitor its performance. Hold Reliance Banking. As a theme, banking is less cyclical, but is linked to the performance of the economy. Given your long-term goal, you can hold this fund for another five years.

DSP BR World Gold is a fund of funds that invests in stocks of global companies that mine gold. It is risky as its fortunes are not only linked to that of gold prices but also to the vagaries of equity markets. If you are looking at an alternative asset class, you can invest up to 10 per cent of your portfolio in gold ETFs/fund of funds from Goldman Sachs, Reliance or UTI.

Current SIPs

Stop your SIPs in DSP BR World Gold. Go for the above gold funds if you wish to. If you are comfortable with the management change in Fidelity, continue with it. Otherwise switch to Quantum Long Term Equity. Continue the other SIPs but move from DSP BR Balanced to HDFC Balanced.

While we do not know the individual values of your lumpsum investments, we assume you will have only about Rs 5 lakh after selling some of the funds we suggested.

Of the remaining Rs 10 lakh of sale proceeds, use a part to start an SIP of Rs 5,000 a month in Quantum Long Term Equity. Invest the rest every year in National Savings Certificate and provident fund (if you already have a PPF account running for 5 years now). You should be able to achieve Rs 1 crore, if the diversified funds deliver 15 per cent, the mid-cap funds at least 18 per cent and gold 8-10 per cent annually.

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