You own 227 stocks or more. It’s time to re-look at your portfolio
today it is all about thematic funds – India rising, capex, smallcap et cetera. And many, perhaps including you, are rushing in. Mutual funds are bound to come up with schemes that are likely to sell.
This is why you have not seen anyone launch a large cap focussed scheme in this market! (If someone has launched, they know their stuff. Invest with them!). The whole idea instead should be to find the right fund management team and bet on them to do a good job for you.
Leave it to them to pick opportunities for you across the length and breadth of the market (called “Flexicap" now). If the new thematic opportunities you are excited about are genuine there is a fair chance your fund management team is already there. And if not, take a pause and ask yourself why not? Maybe even ask them when they visit your neighbourhood/town.
Usually there’s a reason. My flexicap scheme for instance, has no direct exposure to any of the high-flying themes of the day. And I am doing just fine! Review performance, say annually, and if broadly things are right, you stick on.
If not, you put the scheme on watch, and over time if things don’t change, you switch. The key here is to select the right team and then leave it to them to do the stock picking, holding, and exiting. Of course, if you find that suddenly your long term focused fund management team is suddenly excited about 100 p/e stocks, be sure to find out what’s up.
It’s your money at stake after all! You want to make a lot of wealth over the long term. But you don’t want to do it at any cost. Because that could put your wealth at unnecessary risk.
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