Dec 06, 2012, 11.09 AM IST | Source: CNBC-TV18

Invest in balanced portfolio for long term: Roongta Sec

Investing in a well balanced portfolio keeps an investor exposed to varied market objectives, believes Harshvardhan Roongta of Roongta Securities.

Investing in a well balanced portfolio keeps an investor exposed to varied market objectives, believes Harshvardhan Roongta of Roongta Securities. In an interview with CNBC-TV18, he said it is very important to sort the funds according to requirement and then look forward to a long term goal of wealth accumulation.

Roongta is in favour of Reliance Vision, SBI Magnum Global and the Fidelity Tax Advantage fund for investors looking at a timeframe of about 15 years. He also advises investors to invest in funds that offer a diversified portfolio, across different capitalizations and market types.

Below is the edited transcript of his interview with CNBC-TV18. Also watch the accompanying video.

Q: Can invest Rs 2000 per month. I have investment in Mutual Fund through SIP. I have invested in Fidelity Tax Advantage, Reliance Equity RPG, Reliance Gold Fund, and Reliance Vision Mutual Fund each for Rs 1000 per month and in gold saving fund Rs 2000 per month. My timeframe is 15 years?

A: The investments that you have made currently are into well performing funds but there is some kind of duplication that I see in the objective of the funds that you have. Like for instance, I see that you have investments into Reliance Vision Fund, you have Reliance Equity, SBI Magnum Global. I could advice you to just short list amongst these funds and I am recommending three funds which you can retain out of all that you have.

One is surely Reliance Vision. If you can keep investing into the same, the other one would be SBI Magnum Global and the third is the Fidelity Tax Advantage. Now, I think you should sort any investment, all the SIPs that you are making and invest only into these three funds.

Going further also if you wish to invest, just break it up into these three funds. Take a call on the tax advantage fund that you have after DTC comes into play because there may not be tax advantages given to ELSS schemes. So going ahead, keep it simple. Keep these three schemes and invest all your SIPs equally amongst these three schemes. That will be better for you.

Q: Can invest Rs 5000 per month. I have SIP investments in Reliance Growth fund and HDFC Top 200. My timeframe is 10 years and my goal is Rs 10 lakh?

A: The good part is that he understands that there are some funds which are not performing and he needs to trim them down. With an objective, with an investment of Rs 5000 per month over a period of 10 years, Rs 10 lakh seems to be reasonably achievable if we see the long term equity returns of about 14%, if you are assuming that he will just probably exceed his Rs 10 lakh target to about Rs 12 lakh.

In his portfolio again, I am going to recommend four schemes which he can stick to, which will give him diversification across different capitalizations and market types. He can just make a note, one is obviously HDFC Top 200 which he can retain. He can retain the Templeton India Equity Fund and the SBI Magnum Global.

Now this is out of his existing portfolio and he has a concern on Reliance Growth which is fair enough. I have already excluded that out of the list. In addition to that I am a strong advocate of an index fund to be a part of the portfolio. So I am adding one more fund into his portfolio apart from the three which I have already recommended. It could be a Franklin India Index Fund BSE Sensex Plan.

These are the four funds that he will hold in his portfolio for whatever investments that he wishes to make. He is already currently making some SIPs and he wants to make additional Rs 5000. He can club all of that and divide equally between these four funds.

If he does that, he will have a very balanced portfolio and he will be exposed to different objectives of the market. That's what I would recommend for him. He needs to yes, review his portfolio after two years from now because it has a little bit of volatility included.

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