Diversify is to reduce risk in different market condition. Therefore basic idea of diversify is very simple. When you put your entire eggs in one basket you are exposing high risk. However, it you spread them around different baskets you can reduce risk. Moreover, it means that you must not invest your entire money in single asset. Hence, check mutual fund portfolio for long term.
Build Diversified Portfolio with Mutual Funds
By diversifying your portfolio among stocks, bonds and money market securities. You can lower your overall risk investment. Building diversified mutual fund portfolio requires invest in more mutual funds. Hence, you can spread your savings across different asset based on your risk. See Benefits of investing in Diversified equity mutual fund
Similarly, choose funds on basis of parameter. Such as investment objectives, past performance of funds and expense ratio etc. However, returns from your mutual fund portfolio can be in form of structure. Diversify is important because of your portfolio tend to behave different at different points of time.
For example, debt mutual fund can give you outcome with less volatile. And equity mutual funds can provide high capital approval. Let’s look at how you can build diversified mutual fund portfolio. Similarly, in cricket team you have batsmen, bowlers, fielders. But, all of them play different role that called diversification. Hence, you can diversify your mutual funds portfolio in different ways.
Diversification within asset class
Probably, you have decided to invest in an equity mutual fund. Further, to meet long term financial goal. Since, it is long term financial goal. And you are ready to take risk involved in stocks. But your asset will be in form of equity funds, debt funds, hybrid funds and gold funds. Your investment in this asset will depend primarily on your investment and liquidity requirements.
Therefore, this strategy will expose your money to high risk. Hence, you can invest in multicar scheme across different market caps. Such as large cap, midcap and small cap. Moreover, you can also spread your investment in large, mid, small cap scheme. Hence, check Top 10 best large cap mutual funds.
Diversify across asset classes
You can invest according to your risk profile and investment. Therefore funds have flexibility to take advantage of investment opportunities across market capitalization and sectors. Moreover, investing in two or more diversified equity funds will allow you to achieve diversification.
Similarly, you shall park your money in equity mutual funds. And to meet your long-term financial goals that are at least five years. So, if one fund underperforms rest will take care of your portfolio. Also, adjust your portfolio periodically as per your age and requirement. Hence, find below list of Diversified equity mutual funds.
- Birla Sun Life Equity Fund
- Birla Sun Life India GenNext Fund
- Principal Emerging Bluechip Fund
- Sundaram Rural India Fund
- Tata Equity PE Fund
- Birla Sun Life Advantage Fund
- DSP BlackRock Opportunities Fund
- ICICI Prudential Dynamic Plan
- ICICI Prudential Multicap Fund
- IDFC Classic Equity Fund
- Invesco India Contra Fund
- Kotak Opportunities
- Principal Growth Fund
- Quantum Long-Term Equity Fund
- SBI Magnum MultiCap Fund
- Axis Focused 25 Fund
- Baroda Pioneer Growth Fund
- Birla Sun Life Dividend Yield Plus
- DSP BlackRock Equity Fund
- Franklin India High Growth Companies Fund
- Franklin India Opportunities Fund
- Franklin India Prima Plus
- HDFC Capital Builder Fund
- HSBC India Opportunities Fund
- ICICI Prudential Value Discovery Fund
- IDBI Diversified Equity Fund
- L&T Equity Fund
- L&T India Special Situations Fund
- Mirae Asset India Opportunities Fund
- Reliance Growth Fund
- Reliance Regular Savings Fund – Equity
- SBI Magnum Multiplier Fund
- Tata Dividend Yield Fund
- Templeton India Growth Fund
- Franklin India Flexi Cap Fund
- HDFC Core and Satellite Fund
- HDFC Equity Fund
- HDFC Premier MultiCap Fund
- ICICI Prudential Exports and Other Services Fund
- SBI Contra Fund
- Tata Equity Opportunities Fund
- UTI Dividend Yield Fund
- UTI MNC Fund
- Axis Equity Fund
- Canara Robeco Equity Diversified
- LIC MF Equity Fund
- Reliance Equity Opportunities Fund
- Tata Ethical Fund
Finally, see how to build a mutual fund portfolio. However, building a good mutual fund portfolio requires planning. Therefore you can also see Top Performing SIP ELSS Funds. Hence, check best Equity Linked Saving Scheme.