lazy portfolio for 2011
As we said, lazy portfolios should have the best of funds ranked for three types of investors—aggressive investors who can bet on return-maximising funds; slightly less-aggressive investors who need some protection from the sharp slide that equities suffer periodically; and those who want to invest only in funds that are especially mindful of the downside. Each of these portfolios also has a progressively higher level ofinvestment in fixed deposits and the best of equity funds. (See box “Methodology” for details).
The aggressive portfolio
For the aggressive investor, we have put together the best equity diversified growth funds over a five-year period. But a good portfolio should have an ideal mix of equity and debt. We recommend that only 20% of yourinvestments should be parked in fixed deposits. As much as 80% of your assets should comprise equity funds. We suggest a combination of the top four equity funds and bank fixed deposits in terms of returns over a five-year period. So which are the MFs that you could possibly put your money into? Refer Aggressive Portfolio table for the list of equity funds you should consider.
The balanced portfolio
For the less aggressive investor, who would put equal weight on return and risk, a higher debt component would do a better job. Apart from 40% of assets being allocated to FDs, the balance 60% should be allocated to equity funds.
This portfolio would provide the perfect mix for protecting somewhat against a downslide while leaving sufficient headroom for capturing opportunities in equities. Balanced Portfolio table gives a selection of the shortlisted funds in this category for this class of investors.
The conservative portfolio
For conservative, risk-averse investors, who are worried about protecting their wealth first, we would suggest a higher weight to the debt category apart from giving minimum exposure to equity funds. A sound strategy would be to park 60% of your assets in FDs. The balance 40% should be distributed in the four top-performing equity funds. Conservative Portfolio table provides the break-up of the selected funds in this category.
That’s it. That’s all you need to do to beat many fund managers and all the wise brokers. Having done that, relax, take off your shoes and sit back in the comfort of your couch. You can now start reaping the rewards from your lazy portfolio, while enjoying your life and yet making big bucks on your investments.
