I am a long-term mutual fund (MF) investor and I have been balancing my portfolio with 50 per cent equity MFs and 50 per cent debt. Should I continue in this manner?
Krishnan Govindan, Palakad
For a long-term investor, your asset allocation indicates that you are conservative risk taker, who is comfortable with stability in returns from you investments that manages to beat inflation. Going by your long-term investment philosophy, the equity allocation has to be positioned for growth and you should not shy away from taking risks. You should consider a higher equity allocation. For example, if you are doing a monthly systematic investment plan (SIP) for Rs 50,000, about Rs 40,000 can go into equity mutual funds such as Franklin India Bluechip or Mirae Asset India Opportunities and Birla Sun life Frontline Equity, with the rest in debt instruments.
