Many investors are puzzled when deciding on an MF category. However, it is entirely dependent on your risk tolerance and investment time horizon. If you are a very aggressive investor with a long investment horizon, you can choose an aggressive category; it is so simple, yet so challenging.
Irrespectively, one should always prioritize the CORE portfolio, and the remainder can be distributed in the SATELLITE portfolio.
A Core portfolio is the base allocation or strategic allocation to large-cap, flexi-cap, and multi-cap schemes that should not be less than 65% of the portfolio.
A Satellite portfolio allocates no more than 25% of portfolio weight to mid-cap and small-cap schemes. You can also have a tactical allocation to sectoral or thematic funds within the Satellite portfolio, but no more than 10% of the overall portfolio.
Have you ever looked at the percentage of your portfolio that is allocated to these categories?
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