InvestorQ : How to balance the mutual fund portfolio to outperform Nifty 50?
riya Ranade made post

How to balance the mutual fund portfolio to outperform Nifty 50?

riya Ranade answered.
11 months ago
It's very difficult to pick the right formula so that your portfolio will outperform Nifty. If your portfolio is concentrated only on large-cap funds, this will be a hard feat to accomplish. You need to slowly accumulate mutual funds that hold small or mid-sized stocks. Diversifying your capital between a wide sub-category of mutual funds has the potential to beat Nifty. Adding funds from the small-cap, mid-cap, Flexi-cap, and global categories can help here.

However, you should vet the schemes thoroughly. Only schemes that have largely outdone the index consistently should be a part of your portfolio. You will need to be persistent with your investments and keep up with them for the long term. Keep an eye on how these schemes perform relative to the benchmark as well as against other schemes within the category. In case you find a fund underperforming for some time, you should be ready to reshuffle your portfolio.

You should also ensure that your expectations are realistic. Your portfolio may or may not beat Nifty. As long as your portfolio gives you inflation-beating returns in the majority of instances, you should consider it a win!