Are Parag Parikh & Axis Flexi Cap good?

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I’m 26 and I’m investing 5,500 per month in SIP in the following funds: Axis Flexi Cap – 1,500, Parag Parikh Flexi Cap – 1,000, Axis Bluechip- 1,000, Axis ESG – 1,000 and Nippon India Pharma Fund – 1,000. I’m an aggressive and high-risk investor and I’m looking for an investing horizon of 10-15 years. Am I on the right track or should I invest in other funds?

—Name withheld on request

 

An all-equity portfolio such as yours is fine if your investment time horizon is beyond 5-7 years. So, as you indicate, if you are investing for 10 or 15 years, such a portfolio would be fine. However, I see a need to do some pruning in your portfolio. For one, a 5,500 portfolio does not require 5 funds in it. Secondly, having thematic or sector-specific funds in a general-purpose long-term portfolio is not a good idea. Such funds, especially sector funds, require a keen understanding of the specific sector to enable timely entry and exit into the funds.

These funds allow you to do broad-based ‘plays’ on the sectors, and are not suitable for generic asset-class exposure that a long-term portfolio seeks to provide.

So, for your portfolio, I would suggest moving out of both such funds and increasing your allocation to the Parag Parikh fund and the Bluechip fund.

In future, should you increase your SIP (systematic investment plan) amount, you would have room to add a mid-cap fund or two to further diversify your holdings.

Srikanth Meenakshi is founder, Primeinvestor.in.

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