Top Mutual Fund SIP Portfolios for Investment in September 2024
As it is, most mutual fund investors, especially those new to investing, find themselves hard-pressed for an ideal set of schemes that match their various financial goals, especially long-term goals such as retirement. They are always on the lookout for a ready mutual fund portfolio that will help achieve such long-term goals. This is why we have shortlisted and presented a bouquet of mutual fund schemes across various risk profiles, investment horizons, and amounts of investment.
Portfolios for Different Risk Profiles
Recommendation of three different mutual fund SIP portfolios, each catering to three individual risk profiles – conservative, moderate and aggressive. Moreover, we have also assumed three different SIP investment brackets between Rs.2,000-5,000, between Rs.5,000-10,000 and over Rs.10,000, while composing these portfolios. Here are our recommended portfolios.
Recommended Portfolio for Conservative Investors based on the SIP Amount
SIP Amount: Rs.2,000 – Rs.5,000
1. Canara Robeco Bluechip Equity Fund – Direct Plan-Growth
- Fund Category: Equity, Large Cap
- Allocation: 50%
2. ICICI Prudential Regular Savings – Direct Plan-Growth
- Fund Category: Hybrid, Conservative Hybrid
- Allocation: 50%
SIP Amount: Rs 5,000 – Rs.10,000
1. Canara Robeco Bluechip Fund – Direct Plan-Growth
- Fund Category: Equity, Large Cap
- Allocation: 30%
2. Mirae Asset Large Cap Fund/Axis Bluechip Equity Fund – Direct Plan-Growth
- Fund Category: Equity, Large Cap
- Allocation: 20%
3. ICICI Prudential Regular Savings – Direct Plan-Growth
- Fund Category: Hybrid, Conservative Hybrid
- Allocation: 50%
SIP Amount: Over Rs.10,000
1. Canara Robeco Bluechip Fund – Direct Plan-Growth
- Fund Category: Equity, Large Cap
- Allocation: 25%
2. Mirae Asset Large Cap Fund/Axis Bluechip Equity Fund – Direct Plan-Growth
- Fund Category: Equity, Large Cap
- Allocation: 15%
3. Parag Parikh Flexi Cap Fund/Canara Robeco Flexi Cap Fund – Direct Plan-Growth (in that order of preference)
- Fund Category: Equity, Flexi Cap
- Allocation: 10%
4. ICICI Prudential Regular Savings – Direct Plan-Growth
- Fund Category: Hybrid, Conservative Hybrid
- Allocation: 50%
Recommended Portfolio for Moderate Investors based on the SIP Amount
SIP Amount: Rs.2,000 – R.5,000
1. Canara Robeco Bluechip Equity Fund – Direct Plan-Growth
- Fund Category: Equity, Large Cap
- Allocation: 65%
2. ICICI Prudential Regular Savings – Direct Plan-Growth
- Fund Category: Hybrid, Conservative Hybrid
- Allocation: 35%
SIP Amount: Rs.5,000 – Rs.10,000
1. Canara Robeco Bluechip Equity Fund – Direct Plan-Growth
- Fund Category: Equity, Large Cap
- Allocation: 40%
2. Parag Parikh Flexi Cap Fund/UTI Flexi Cap Fund/Canara Robeco Flexi Cap Fund – Direct Plan-Growth (in that order of preference)
- Fund Category: Equity, Flexi Cap
- Allocation: 25%
3. ICICI Prudential Regular Savings – Direct Plan-Growth
- Fund Category: Hybrid, Conservative Hybrid
- Allocation: 35%
SIP Amount: Over Rs.10,000
1. Canara Robeco Bluechip Equity Fund – Direct Plan-Growth
- Fund Category: Equity, Large Cap
- Allocation: 25%
2. Mirae Asset Large Cap Fund/Axis Bluechip Fund – Direct Plan-Growth
- Fund Category: Equity, Large Cap
- Allocation: 15%
3. Parag Parikh Flexi Cap Fund/UTI Flexi Cap Fund/Canara Robeco Flexi Cap Fund – Direct Plan-Growth (in that order of preference)
- Fund Category: Equity, Flexi Cap
- Allocation: 25%
4. ICICI Prudential Regular Savings – Direct Plan-Growth
- Fund Category: Hybrid, Conservative Hybrid
- Allocation: 35%
Recommended Portfolio for Aggressive Investors based on the SIP Amount
SIP Amount: Rs.2,000 – Rs.5,000
1. Parag Parikh Flexi Cap Fund/PGIM India Flexi Cap Fund – Direct Plan-Growth
- Fund Category: Equity, Flexi Cap
- Allocation: 50%
2. Canara Robeco Bluechip Equity Fund – Direct Plan-Growth
- Fund Category: Equity, Large Cap
- Allocation: 50%
SIP Amount: Rs.5,000 – Rs.10,000
1. Parag Parikh Flexi Cap Fund/PGIM India Flexi Cap Fund – Direct Plan-Growth
- Fund Category: Equity, Flexi Cap
- Allocation: 40%
2. Canara Robeco Bluechip Equity Fund – Direct Plan-Growth
- Fund Category: Equity, Large Cap
- Allocation: 25%
3. Mirae Asset Hybrid Equity Fund/SBI Equity Hybrid Fund/Canara Robeco Equity Hybrid Fund – Direct Plan-Growth (in that order of preference)
- Fund Category: Hybrid, Aggressive Hybrid
- Allocation: 15%
2. PGIM India Midcap Opportunities Fund/Axis Midcap Fund/Invesco India Mid Cap Fund – Direct Plan-Growth (in that order of preference)
- Fund Category: Equity, Mid-Cap
- Allocation: 20%
SIP Amount: Over Rs.10,000
1. Canara Robeco Bluechip Equity Fund – Direct Plan-Growth
- Fund Category: Equity, Large Cap
- Allocation: 20%
2. Axis Small Cap Fund/SBI Small Cap Fund/Nippon India Small Cap Fund – Direct Plan-Growth
- Fund Category: Equity, Small Cap
- Allocation: 10%
3. Parag Parikh Flexi Cap Fund/PGIM India Flexi Cap Fund – Direct Plan-Growth
- Fund Category: Equity, Flexi Cap
- Allocation: 25%
4. Axis Growth Opportunities Fund/Canara Robeco Emerging Equities Fund – Direct Plan-Growth (in that order of preference)
- Fund Category: Equity, Large and Mid Cap
- Allocation: 15%
5. Mirae Asset Hybrid Equity Fund/SBI Equity Hybrid Fund/Canara Robeco Equity Hybrid Fund – Direct Plan-Growth (in that order of preference)
- Fund Category: Hybrid, Aggressive Hybrid
- Allocation: 10%
6. PGIM India Midcap Opportunities Fund/Axis Midcap Fund/Invesco India Mid Cap Fund – Direct Plan-Growth (in that order of preference)
- Fund Category: Equity, Mid-Cap
- Allocation: 20%
Methodology for Picking Equity Funds
While shortlisting the equity mutual fund schemes, the following were some of the parameters:
1. Mean Rolling Returns: Calculated daily over the last three years.
2. Consistency Over the Last Three Years: The Hurst Exponent, denoted as H, refers to the measure of consistency of a fund. The H exponent refers to the level of randomness in the NAV series of a fund. Generally, funds with a high H value display low volatility relative to those funds with a low H value.
- If H = 0.5, it implies that the series of returns follows a geometric Brownian time series and hence cannot be forecasted.
- If H < 0.5, then the series is mean reverting.
- If H > 0.5, the series is persistent, and the higher the value of H, the stronger the trend.
3. Downside Risk: It takes into account only those negative returns given by the mutual fund scheme.
- X = Below zero returns
- Y = Sum of squares of X
- Z = Y/no. of days used for calculation of the ratio
- Downside risk = Square root of Z
4. Outperformance: Calculated on the basis of Jensen’s Alpha for the last three years. Alpha is a measure of Risk-adjusted return generated by a mutual fund scheme in relation to the expected market return-which is predicted by using the Capital Asset Pricing Model [CAPM]. The greater the Alpha, the better the fund has performed vis-a-vis what the market has expected.
Average returns of the MF Scheme = [Risk-Free Rate + Beta of the MF Scheme * {(Average return of the index – Risk-Free Rate}]
5. Asset Size: The minimum asset size for equity funds is Rs.50 crore.
Selection Methodology for Debt Funds
Debt mutual funds were selected based on the following criteria:
1. Mean Rolling Returns: Computed daily on a three-year basis (ending January 31, 2022).
2. Consistency Over the Last Three Years: The Hurst Exponent, H, is used again to measure the consistency of a fund, as explained above.
3. Downside Risk: Like in the case of equity funds, it considers only the negative returns supplied by the mutual fund scheme.
- X = Returns below zero
- Y = Sum of all squares of X
- Z = Y/number of days used for calculating the ratio
- Downside risk = Square root of Z
4. Outperformance: It is the difference between the return of the fund and the return on the benchmark. This has been done on a rolling return basis calculated on a daily basis.
5. Asset Size: Minimum asset size for debt funds is Rs.50 crore.
Hybrid Funds Selection Methodology
In the case of hybrid mutual funds, the selection would be based on the following parameters:
1. Mean Rolling Returns: On a day-to-day basis for the last three years.
2. Consistency Over the Last Three Years: The Hurst Exponent, H, is applied here, too, for assessing the consistency of a fund.
3. Downside Risk: This shall include only the negative returns provided by the mutual fund scheme, as discussed above.
4. Outperformance:
- Equity portion: To be measured using Jensen’s Alpha over the last three years.
- For the debt part, it is the difference between the return of the fund and the return of the benchmark. The computation is on a rolling return basis and calculated on a day-to-day basis.
5. Asset Size: Hybrid funds must have at least Rs.50 crore as assets.
These model portfolios will take away all complexities pertaining to mutual fund selection in such a way that an investor can reach his financial goals confidently and with ease.
