Ask Morningstar: Do you need a tech fund?

Apr 12, 2022

I am retired and in my 70s. Please evaluate my portfolio. Fixed income Rs 66 lakh giving an average return of 7%. These are my equity funds: HDFC Index Sensex (Rs 6 lakh), Axis Focused 25 (Rs 15 lakh), ICICI Technology (Rs 15 lakh), Mirae Hybrid (Rs 15 lakh), Mirae Asset Largecap (Rs 5 lakh), Axis Equity Saver (Rs 4 lakh). 

Given your age and (possibly) a lower risk appetite, we would urge to look at your asset allocation.

Your current asset allocation reflects around 45% allocation towards equity which is on the higher side. Considering your specific case, an allocation of 25-30% in equities and the rest in fixed income seems like a good idea.

The funds that you have invested in as part of your portfolio are a good combination: a passive fund, two hybrid funds, a focused fund, and a large cap that will help mitigate the risks on the portfolio. You also hold a tech fund that could lead to some cyclicality in terms of the returns considering that thematic funds often find favour when a particular sector or theme is doing well.

Axis Focused 25 is a concentrated fund that is managed by a tenured and experienced manager. We have a positive view on this fund.

Axis Equity Saver invests around 20-25% in debt instruments and the rest in equity. While this is a good fund, do consider the risks of investing in an equity focused fund given your risk appetite.

Mirae Asset Hybrid Equity is an aggressively positioned fund with a focus on equity.

Do consider making regular investments as opposed to making lump sum investments. This will help average out your returns and give you a more consistent return. We would urge you to use an SIP calculator to look at your investments and returns. You can access the calculator here.

Registered readers can post their queries by accessing the Ask Morningstar tab. Our team will answer SELECT queries relating to mutual funds, portfolio planning and personal finance. While we provide broad guidelines, we suggest you consult a financial adviser before making investment decisions.


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