Ask Morningstar: A portfolio for a moderate risk appetite

Oct 04, 2022

I have a moderate risk appetite. Are these SIPs right?

  • ICICI Prudential Balanced Advantage Fund: Rs 3,200
  • Mirae Asset Emerging Bluechip Fund: Rs 2,500
  • Nippon India Gold Savings Fund: Rs 2,300
  • Kotak Emerging Equity Fund: Rs 2,000
  • SBI Small Cap Fund: Rs 1,500

What would be the expected CAGR after 15 years from this portfolio?

Your portfolio seems well spread out and in line with your moderate risk appetite.

Having a balanced fund as part of the portfolio lends it the ability to tide over market cycles and find a balance between investing across equity and debt. ICICI Balanced Advantage Fund is a dynamic fund that has the flexibility to shift allocation between equity and fixed income depending on the attractiveness of the asset class and the manager’s views of the market. The fund has historically been managed with a significant exposure towards equity stocks, with debt constituting around 20-25% of the portfolio.

The other funds in your portfolio are also amongst the best in their respective categories.

SBI Small Cap is managed by Srinivasan and works as a great addition to your portfolio if you are looking to diversity into small caps.

Mirae Asset Emerging Bluechip is a large and mid-cap fund that carries the highest Analyst Rating of Gold. The fund’s consistency backed by its long track record, the manager’s tenure, the in-depth research process are a few factors that out analysts like about this fund. The fund carries a significant exposure towards mid-cap stocks, and this helps investors diversity into mid-cap stocks.

Kotak Emerging Equity carries an analyst rating of Silver (Direct) and Bronze (Regular). We think that the fund is managed by a tenured manager who is supported by a well-rounded and experienced analyst team.

Having a gold fund also gives your portfolio the much-needed exposure towards the precious metal and this also acts as a hedge against portfolio risks.

Currently, this is the percentage allocation and each fund is linked to its relevant details:

The ideal asset allocation should be at around 70% for equity, 20% towards debt and the remaining towards other asset classes. A look at your asset allocation reveals a higher allocation to Gold, which you can likely reduce. Moreover, your allocation to large-cap stocks on an overall basis could go up considering that large caps provide a cushion to the portfolio. Do look at your goals and allocate towards asset classes in line with your long-term expectations and risk appetite.

To calculate the growth of the portfolio, please use this SIP calculator.


Which asset classes are negatively correlated?

Can I expect a 25% return from equity?


Articles authored by senior research analyst Kavitha Krishnan

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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Krishna Kant Verma
Oct 29 2023 02:53 PM
I want to invest 15 lakhs for 15 to 18 years in mutual funds
My proposal is as under
5 lakhs in Aditya Birla sun life front line equity direct growth plan
5 lakhs in quant mid cap growth fund
5 lakhs in quant small cap fund
Your advice solicited
Shivani Sen
Feb 5 2023 12:38 PM
Good read
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