![Guide To Build Your MF Portfolio](https://cdn.magzter.com/Outlook Money/1722691935/articles/8SrFWm-UP1722859674427/Mutual-Funds.jpg)
Most people who do not seek the advice of professional advisors, usually tend to look at the last one-month or one-year returns and go for mutual funds that are relatively giving higher returns in comparison with their peers.
However, this is a rather simplistic approach. Selecting your funds should be based on a lot of factors, such as your investment goals, tenure and risk tolerance, among others. Here is a guide on what to consider when choosing a portfolio of funds and how to maintain it.
Step I: Portfolio Allocation
To start with, you have to decide your overall portfolio allocation. This is basically about deciding how much you want to invest in equity, debt, gold, and so on. Zeroing in on a particular fund is the subsequent step. Your portfolio allocation will depend on your investment objectives, risk appetite, and investment time horizon.
Let us say, you decide on an allocation ratio of 60:30:10 in equity, debt and gold. This allocation ratio will provide you with the basic framework on which you will proceed with the next step towards selecting the funds of your choice towards building your portfolio.
Step II: Category Allocation
There are multiple fund categories available, each with their own nuances. You have to understand either all the categories, or to keep life simple, know a few of them which you will go for. There are 11 equity fund categories, 16 debt categories, and six hybrid categories. Here are some relevant ones.
Equity Large-Cap: Large-cap stocks are the top 100 stocks according to market capitalisation. In other words, these are the leading 100 companies of the country. These are relatively less volatile than, say, small-cap stocks, but are subject to the usual market movements.
This story is from the August 2024 edition of Outlook Money.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the August 2024 edition of Outlook Money.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Sign In
![Here's How To Claim Tax Refund If You Missed The ITR Deadline](https://reseuro.magzter.com/100x125/articles/242/1821247/NfpQWYm301725435627830/crp_HERES-HOW-TO-CLAIM-TAX-REFUND-IF-YOU-MISSED-THE-ITR-DEADLINE.jpg)
Here's How To Claim Tax Refund If You Missed The ITR Deadline
The Income-tax Act, 1961, allows the refund of any excess income tax deducted on your income beyond your actual tax liability.
![26 Spiels You Should Not Fall For](https://reseuro.magzter.com/100x125/articles/242/1821247/y_FZfSbmu1725430716100/crp_26-SPIELS-YOU-SHOULD-NOT-FALL-FOR.jpg)
26 Spiels You Should Not Fall For
We have a list of 26 traps that you should avoid in your journey to creating wealth
![Unified Pension Scheme](https://reseuro.magzter.com/100x125/articles/242/1821247/HCYMDGvv31725437258017/UNIFIED-PENSION-SCHEME.jpg)
Unified Pension Scheme
The Union Cabinet approved the Unified Pension Scheme (UPS) on August 24, 2024, guaranteeing 50 per cent of the salary as assured pension for central government employees.
![Unlocking Financial Freedom with Freedom SIP: A Beginner's Guide](https://reseuro.magzter.com/100x125/articles/242/1821247/Pqf5yC9L11725437068051/UNLOCKING-FINANCIAL-FREEDOM-WITH-FREEDOM-SIP-A-BEGINNERS-GUIDE.jpg)
Unlocking Financial Freedom with Freedom SIP: A Beginner's Guide
Freedom SIP is the smartest way to finance your retirement because it allows you to ride the compounding rocket to build wealth, even by investing a small monthly sum.
![Asset Allocation Strategy to Safeguard Against Market Fluctuations](https://reseuro.magzter.com/100x125/articles/242/1821247/UBdhWHYLh1725436958228/ASSET-ALLOCATION-STRATEGY-TO-SAFEGUARD-AGAINST-MARKET-FLUCTUATIONS.jpg)
Asset Allocation Strategy to Safeguard Against Market Fluctuations
Invest in different asset classes, such as equities, debt, gold, etc., so that if a particular segment doesn't perform in a given situation, others will come to the rescue.
![The Role of Asset Allocation in Investing](https://reseuro.magzter.com/100x125/articles/242/1821247/w97yHtBX-1725436699429/THE-ROLE-OF-ASSET-ALLOCATION-IN-INVESTING.jpg)
The Role of Asset Allocation in Investing
A proper mix of asset allocation that aligns with investor's goals is key to the portfolio's long-term performance and reaching milestones.
![Why Retirement Planning is Crucial in Life](https://reseuro.magzter.com/100x125/articles/242/1821247/G6jfRa-NE1725436561006/WHY-RETIREMENT-PLANNING-IS-CRUCIAL-IN-LIFE.jpg)
Why Retirement Planning is Crucial in Life
Retirement planning is the key if you want a financially secure life in your sunset years.
![IS SENIOR HOUSING FOR YOU?](https://reseuro.magzter.com/100x125/articles/242/1821247/Z67pwefN-1725436065002/IS-SENIOR-HOUSING-FOR-YOU.jpg)
IS SENIOR HOUSING FOR YOU?
Many seniors have taken refuge in senior living facilities in their twilight years as their children have moved abroad. While that may help them ward off boredom, they often come at a huge cost
![WITH OR WITHOUT INDEXATION: WHEN DO HOMEOWNERS PAY LESS?](https://reseuro.magzter.com/100x125/articles/242/1821247/r06uc7azn1725435307977/WITH-OR-WITHOUT-INDEXATION-WHEN-DO-HOMEOWNERS-PAY-LESS.jpg)
WITH OR WITHOUT INDEXATION: WHEN DO HOMEOWNERS PAY LESS?
Calculating taxes under both methods-considering inflation and property appreciation-can yield a more precise result
![Flexing Its Way Across Market Cycles](https://reseuro.magzter.com/100x125/articles/242/1821247/5e9TKVRLe1725434989147/FLEXING-ITS-WAY-ACROSS-MARKET-CYCLES.jpg)
Flexing Its Way Across Market Cycles
Very few funds meet investors' expectations of delivering superior returns across market cycles, and HDFC Flexi Cap Fund is one of them.