How to diversify mutual fund portfolio?

1. Tata Banking and Financial Services Fund

   An open ended equity scheme investing in Banking & Financial Services Sector

   Exit Load	Risk Level	Benchmark
   0.25%	Very High Risk	Nifty Financial Services TRI

   Tata Banking and Financial Services Fund is an open-ended equity scheme that invests at least 80% of its assets in shares of companies from the banking and financial services sector in India. 

   You can start building your mutual fund SIP portfolio by investing ₹100 or ₹5000 in a lump sum.

   The fund selects companies classified under the financial services sector by AMFI. It tries to invest following the “Growth at Reasonable Price” approach. 

   However, there is no assurance or guarantee that the investment objective of the Scheme will be achieved. The Scheme does not assure or guarantee any returns.

   

2. Tata Gilt Securities Fund 

   An open-ended debt scheme investing predominantly in government securities across maturity. A Relatively High Interest Rate Risk and Relatively Low Credit Risk

   Exit Load	Risk Level	Benchmark
   NIL	Moderate Risk	CRISIL Dynamic Gilt Index (AIII)

   This debt mutual fund invests mainly in government securities of various maturities. It can offer low credit risk but has a higher sensitivity to interest rate changes. 

   The goal of this scheme is to achieve long-term capital growth and income. Tata Gilt Securities fund also studies economic and interest rate trends to adjust its portfolio by buying securities through:

    - Public issues

    - Secondary markets

    - Auctions

   It may also hold money market instruments with strong ratings. You can include this scheme in your mutual fund portfolio if you have a 3+ year horizon.

   

    

3. Tata Gold Exchange Traded Fund

   An Open-Ended Exchange Traded Fund replicating / tracking domestic price of Gold.

   Exit Load	Risk Level	Benchmark
   NIL	High Risk	Domestic Price of Gold

   This is a gold exchange-traded fund (ETF). This scheme aims to match the returns of physical gold based on domestic market prices. However, there could be minor differences called “tracking errors”. Also, it does not guarantee returns. 

   As an investor, you can include this fund in your mutual fund portfolio to gain gold exposure without holding the metal physically. The minimum SIP amounts start from ₹100.

   

4. Tata Large and Mid-Cap Fund

   An open ended equity scheme investing in both large cap and mid cap stocks.

   Exit Load	Risk Level	Benchmark
   NIL	Very High Risk	Nifty Large Midcap 250 TRI

   Tata Large and Mid Cap Fund is an equity scheme that invests in both large and mid-sized companies. The fund selects stocks through detailed research and focuses on companies with:

    - Consistent performance

    - Low debt

    - Strong cash flows

   It also follows a “Growth at Reasonable Price” approach and the fund also actively adjusts allocations between large and mid-cap stocks. The minimum SIP amount is ₹100.

   

5. Tata Small Cap Fund

   An open ended equity scheme predominantly investing in small cap stocks

   Exit Load	Risk Level	Benchmark
   NIL (after 12 months)	Very High Risk	Nifty Smallcap 250 TRI

   Tata Small Cap Fund invests in smaller companies with:

    - Strong balance sheets

    - Good cash flows

    - Potential to grow earnings over the next 3 to 4 years

   This fund focuses on reasonable valuations and follows a “Growth at Reasonable Price” approach. It tries to select businesses that can deliver consistent earnings growth and generate free cash. 

   Furthermore, the fund prefers long-term “compounder” stocks and uses a bottom-up selection process. It keeps portfolio changes low and avoids global commodity companies. You can build a mutual fund SIP portfolio with this fund starting from ₹100.

   

By making a diversified mutual fund SIP portfolio, you can create an ideal balance between “risk” and “returns”. This can be done by spreading investments across:

• Asset classes
• Market caps
• Industries/ Sectors

In 2025, you can combine equity, debt, and commodities mutual funds as per your risk appetite, time horizon, and investment goals. Additionally, you can consider sectoral and market-cap diversification to further cushion the impact of market volatility. 

Remember that diversification cannot eliminate losses. However, it can reduce the impact of a single underperforming segment on your total portfolio returns. 

For more information, you can visit www.tatamutualfund.com. The Investor Service Centre of Tata Asset Management Pvt. Ltd. is located at Mulla House, Ground Floor, 51, M.G. Road, Near Flora Fountain, Mumbai – 400 001, Maharashtra. The office hours are Monday to Friday, 9:00 AM to 5:30 PM, and Monday to Saturday, 9:00 AM to 5:30 PM. For assistance, you can also call (022) 6282 7777 or email service@tataamc.com.