A recent investor query highlights the growing need for portfolio consolidation and rebalancing among investors with multiple mutual fund accounts. According to financial expert Reetika Sharma, a Certified Financial Planner, investors with two or more MF portfolios in different demat accounts often face over diversified and overlapped fund breakdowns that require professional guidance. The expert emphasizes that while the overall investment amount may be very good, the current breakdown needs systematic improvement through expert advice and professional portfolio management.
Financial experts recommend increasing exposure to large-cap funds as the first step in portfolio rebalancing. As reported by Mint, adding a balanced advantage fund or dynamic asset allocation fund can serve as a risk stabilizer while maintaining growth asset exposure. The strategy focuses on creating a balanced portfolio of small-cap, mid-cap, and large-cap funds rather than individual fund selection. According to Reetika Sharma, while direct funds are popular due to their less expense ratio compared to regular funds, investing in regular funds via advisor gives much better results than direct DIY portfolios, as advisors provide periodic performance tracking and personalized fund recommendations based on age, requirements, financial goals and risk profile.
The expert analysis reveals significant advantages of working with professional advisors for portfolio consolidation and rebalancing. Reetika Sharma notes that periodic portfolio review by advisors provides much better results than direct DIY management, as advisors can track performance and guide with exact funds to invest in keeping with individual investor profiles. This professional approach ensures that over diversified and overlapped fund breakdowns are systematically addressed while maintaining the overall investment amount's effectiveness, making it essential for investors seeking optimal portfolio management strategies.
Beyond equity markets, experts suggest diversifying into debt and commodity markets through small steps. According to Mint, this can be achieved by investing in assets like gold and silver to reduce overall portfolio risk while maintaining growth potential. The diversification approach aims to provide stability without compromising long-term growth objectives, complementing the smart rebalancing methodology that advocates for multi-asset class exposure to manage overall portfolio risk.
