No Clear Focus

I have been investing in mutual funds from the last one year but have no knowledge on the funds I am investing in. I am not looking for a short term gain, but would like to stay invested over the next three to five years. Could you share with me some inputs on my portfolio? Do suggest funds that you feel should be replaced.
-Sanjay Pandita

First and foremost your portfolio lacks a clear focus. You are invested in many different kinds of funds, from one that invests overseas to one that actively hedges its portfolio (Reliance Equity). The net result is that your portfolio lacks a robust core holding. To address this we suggest that you look at a five or four star rated diversified equity fund that has a large cap tilt to it. You can make such a selection from our website or from the fund score card printed in our magazine.

Since you have little knowledge about your funds we suggest that you go through the 'analysis' section of the fund page on our website. This will at least remove ambiguity on the objective of the fund.

As far as your current holdings are concerned, HDFC Mid-Cap Opportunities looks on track. Reliance Equity has delivered returns in line with the average peer; the fund's investment mandate is such that you will have to contend with average returns. SBI Infrastructure Fund has also delivered returns in line with other infrastructure players. The worrisome holding is that of Fidelity International Opportunities. It is too soon to comment on the fund, given that it is yet to release a single portfolio. So we don't know what kind of companies the fund is investing in or anything about the actual investment style. We advise you to keep a close eye on this fund. The only addition you need to make is that of a single diversified equity fund. Don't make the mistake of investing in every fund that sounds interesting, stick to quality funds that have an established track record.

Concerning your investment strategy, there are two aspects that we don't completely agree with. The first is that of investing lump-sum amounts. Especially since you are new to investing, it is better to stick to a systematic way of investing. The logic behind this is to eliminate the risk of adverse timing in entering the market. Opt for a Systematic Investment Plan (SIP).

The second aspect that we would recommend is to avoid investing in close-ended funds. The close-ended nature of these funds means that in the initial years you cannot withdraw your money without incurring a considerable cost. Plus the liquidity window of many such funds makes redemption a tedious job.

(by valueresearch)