InvestorQ : What does portfolio mean in mutual funds and how to make that?
indhumathi Sayani made post

What does portfolio mean in mutual funds and how to make that?

3 years ago
A portfolio is basically a grouping of financial assets such as bonds, commodities, currencies, stock, etc. and their fund counterparts, including mutual funds, closed funds, exchange-traded funds. 

Portfolio in mutual fund simply means grouping different types of mutual funds, deciding risk on them, making different strategies. There can be a combination of a small-cap, large-cap, medium cap, foreign stock, equity, bond, debt, etc.
To build a portfolio, one must decide the structure according to its needs.

Core and satellite portfolio design:
 A common and time-tested portfolio design is Core and satellite. In this, you begin with the core- a large-cap stock fund, which can be the largest proportion of your portfolio and builds around the portfolio with satellite funds, which can be the smaller portion of your portfolio.

Different categories of fund for structure:
When you have large-cap as core there can be other components to complete the structure such as mid-cap funds, small-cap stock, bonds, money market funds, etc.

Risk tolerance:
Before building any portfolio one must have a clear idea of how much risk they are willing to take. As your risk tolerance is a measure to assess your ability to handle market fluctuations.

Best Funds:
If you have a vast choice of funds, you can begin by using a fund screener or comparing performances to a benchmark. There are other aspects to be considered such as fund fees and expenses and manager tenure.