If your exiting mutual fund portfolio is bleeding or you are still struggling to make your first investment – list of Best Mutual Funds to Invest in 2012 may help you. I have covered 12 diversified equity funds & couple of debt funds in this list so that you can make a proper diversified portfolio.
I have also attached consolidated factsheet of Best Mutual Funds at the end of this article – this includes investment objective, past performance, ranking in their category, chart, expense ratio, sector/stocks these funds have invested in and some other relevant information.
Best Mutual Funds to invest in 2012 – Equity Funds
Any fund with holding of more than 65% in equity can be considered as an equity fund. But to keep things simple I have just taken 4 categories of diversified equity funds & ignored balanced funds, sector funds, international funds or Equity Linked Saving Schemes. Equity funds are divided according to Market Cap (size of the company).
If you are still not convinced with Mutual Funds – you should read Magic of Systematic Investment Plan (SIP).
Best Mutual Funds to invest in 2012 –Large Cap Funds
Mutual Funds with more than 80 per cent of assets in large-cap companies over the last three years are added in this category. Large cap funds can provide stability to any portfolio.
|
Best Large Cap Mutual Funds |
1m |
3m |
6m |
1yr |
3yr |
5yr |
10yr |
| DSP BlackRock Top 100 Equity | -8.07 | -5.03 | -16.07 | -20.02 | 17.76 | 8.03 | |
| Franklin Templeton Franklin India Bluechip | -5.36 | -2.45 | -11.64 | -16.65 | 22.83 | 7.44 | 25.86 |
| ICICI Prudential Focused Bluechip Equity | -4.07 | -0.07 | -10.91 | -14.5 | 26.67 | ||
| Category Average | -5.5 | -2.29 | -14.6 | -21.56 | 14.64 | 3.32 | 16.6 |
Best Mutual Funds to invest in 2012 –Large & Mid Cap Funds
Mutual Funds between 60 to 80 per cent of assets in large-cap companies over the last three years. They are definitely bit aggressive than large cap funds but still can get part in conservative investor’s portfolio.
|
Best Large & Mid Cap Mutual Funds |
1m |
3m |
6m |
1yr |
3yr |
5yr |
10yr |
| Fidelity Equity | -5.99 | -4.64 | -13.88 | -19.28 | 23.04 | 7.69 | |
| HDFC Top 200 | -6.02 | -4.44 | -16.79 | -22.21 | 22.74 | 9.65 | 28.87 |
| UTI Opportunities | -3.77 | 0.04 | -6.33 | -10.80 | 27.61 | 12.87 | |
| Category Average | -5.79 | -4.13 | -14.74 | -21.65 | 15.62 | 2.88 | 18.8 |
Best Mutual Funds to invest in 2012 –Multi Cap Funds
Funds with between 40 to 60 per cent of assets in large-cap companies over the last three years are categorized under Multi-Cap. It’s been noticed that Multi-caps funds also keep moving from one category to other as couple of month’s back Reliance Equity Opportunities was in Multi-Cap category but now it is part of Mid & Small Cap funds.
|
Best Multi Cap Mutual Funds |
1m |
3m |
6m |
1yr |
3yr |
5yr |
10yr |
| DSP BlackRock Equity | -9.42 | -9.89 | -19.34 | -24.19 | 19.42 | 7.95 | 26.81 |
| HDFC Equity | -9.42 | -9.89 | -19.34 | -24.74 | 24.87 | 8.79 | 28.16 |
| Quantum Long Term Equity | -9.42 | -9.89 | -19.34 | -18.89 | 27.78 | 9.86 | |
| Category Average | -9.42 | -9.89 | -19.34 | -23.58 | 17.47 | 3.78 | 22.79 |
Best Mutual Funds to invest in 2012 – Mid & Small Cap Funds
Funds with at least 60 per cent of assets in small and mid-cap companies over the last three years will come under this category. Mid & Small Cap Funds are very volatile in nature but has delivered better returns over long period of time.
|
Best Mid & Small Cap Mutual Funds |
1m |
3m |
6m |
1yr |
3yr |
5yr |
10yr |
| Birla Sun Life Dividend Yield Plus | -6.69 | -7.64 | -13.82 | -18.51 | 25.62 | 11.75 | |
| IDFC Premier Equity Plan A | -6.15 | -8.96 | -11.53 | -17.34 | 28.95 | 16.44 | |
| Tata Dividend Yield | -5.27 | -1.48 | -13.48 | -16.19 | 26.44 | 11.30 | |
| Category Average | -7.16 | -9.20 | -17.95 | -25.24 | 18.84 | 0.90 | 21.56 |
Rational behind selection of these funds is five star rating from value research – ratings can give you first level check to fund selection.
Best Mutual Funds to invest in 2012 – Year on Year Returns
You can see year on year performance to check the consistency of the funds.
Performance of different equity fund categories
You can clearly see that multi-cap & midcaps have given better returns than large cap but were more volatile.
Best Mutual Funds to invest in 2012 – Debt Mutual Funds
The objective of these Funds is to invest in debt papers. Government authorities, private companies, banks and financial institutions are some of the major issuers of debt papers. By investing in debt instruments, these funds ensure low risk and provide stable income to the investors. (Read – Debt Fund Guide)
Best Mutual Funds to invest in 2012 – Short Term Fund
Short-term plans invest in shorter dated paper, i.e. debt paper with lower maturity. There is also significant chunk invested in cash/call money. This tends to insulate the fund from volatility in debt markets which impacts longer dated paper. Short term funds invest in debt securities that mature in the next 15 – 18 months. They invest mostly into AAA or AA+ rated debt securities and interest rate hikes mildly impact the returns. Short term funds are best suited for investors with an investment horizon of 1 – 2 years.
|
Best Short Term Mutual Funds |
1m |
3m |
6m |
1yr |
3yr |
5yr |
10yr |
| DSP BlackRock Short Term | 0.82 | 2.13 | 4.45 | 8.76 | 6.34 | 6.84 | |
| Franklin Templeton Templeton India Short Term Income | 0.77 | 2.22 | 4.53 | 9.04 | 8.81 | 9.14 | |
| Category Average | 0.91 | 2.30 | 4.50 | 8.74 | 6.55 | 7.57 | 6.92 |
Best Mutual Funds to invest in 2012 – Monthly Income Plan (MIP)
MIPs are hybrid investment funds. They invest a minor portion (5% to 35%) in equities and the rest into debt securities. They aim to provide regular and periodic income. The income periods can be monthly, quarterly, half-yearly and yearly. But a point to be noted is that the income is not guaranteed. The fund will only be able to distribute income if it has surplus distributable income. These plans are suitable for people looking for regular income rather than capital appreciation.
|
Best Monthly Income Plans |
1m |
3m |
6m |
1yr |
3yr |
5yr |
10yr |
| HDFC MIP Long Term | -0.76 | 0.00 | -1.59 | 0.02 | 12.67 | 9.43 | |
| Reliance MIP | 0.51 | 0.65 | -0.04 | 0.80 | 9.57 | 9.53 | |
| Category Average | -0.34 | 0.99 | 0.69 | 2.00 | 7.29 | 6.11 | 8.03 |
Hope this best mutual fund list will give you a point – to start building a good mutual fund portfolio. You can download consolidated factsheet of above mentioned funds by clicking here. If you have questions – feel free to add in comment section.
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{ 192 comments… read them below or add one }
Hi Hemant
A very useful article. However, I feel that you should not have ignored Balanced Funds ( Equity Oriented Hybrid Funds ) as you have already included MIPs. In my view it makes sense to invest in funds like ICICI Prudential Balanced, HDFC Balanced, Canara Robeco Balanced and Birla Sunlife 95 even though these funds do not enjoy Value Research five star rating.
Under the present condition of the market periodic asset rebalancing is very important. This can be very easily implemented automatically by mutual fund investors by investing in balanced funds.
Over the last five years, the average equity-oriented balanced fund has given better returns than all diversified fund categories.
I just want you to consider writing one article on equity oriented hybrid funds since you do not appear to have written on balanced funds so far.
Hi Anil,
I have completed the sentence
I will definitely write one article on balanced funds.
Well said Anil… One should not forget HDFC Prudence also which is best in category. Also gilt/bond fund should be considered in 2012.
Hi Hemanth
Excellent article. I am new to MF & ELSS. Had some ULIPS. Have couple of queries regarding MF. In MF & ELSS switching option is there, like in ULIPS to switch between funds? And do we need to switch between funds in MF also, by monitoring the market conditions?
Thanks & Regards
Muniraju
Hi Muniraju,
Switching option is there but there will be taxes – read this
http://www.tflguide.com/2011/12/mutual-fund-taxation-in-india.html
Also you can’t exit ELSS before 3 years.
no one has written anything about ELSS, What will be the future?
Hi Ankur,
You can read this
http://www.tflguide.com/2011/11/elss-after-new-direct-tax-code-dtc.html
Hi Sir,
it is really very useful article for us in the begining of year 2012. Thanks for it.
please suggest two fund , one from large cap and other from mid & small cap , monthly SIP 2000 each for period 15 years, i am very confused to select fund listed above.
please help
Hi Kanika,
You can choose any 2 funds as my selection criteria for funds in above list is same.
Hi Kanika
Since you are very confused I offer my help. You can consider ICICI Prudential Focused Bluechip Equity and IDFC Premier Equity. However do not forget to track the performance of your funds regularly.
You can without an iota of doubt go for DSP BlackRock Top 100 Fund and Mirae Asset India Opportunities Fund…..
Both are very good and have done well even in Bearish phases…
Hi Srikanth
Overconfidence in the performance of funds is not good. Tracking fund performance is very important.
Long Term Debt Funds:
Why not toinclude GILT and Long term Mutual fund on the list?
Dobt funds will give mor returns as interest rates will be sliding soon.
Hi Vinayak,
I will be write a separate post on this as gilt/income funds are complex animals for most of the investors.
Hi Anil/Hemant,
I have been investing on
1.ICICI Prudential Focused Bluechip Equity
2.UTI Opportunites Fund
3.HDFC Opportunites Fund
4.Reliance Equity Opportunites fund.
As Hemant suggested ,Reliance equity Opp fund termed as mid & small cap now. Should I stop this SIP and start any one of the above muti fund category?
Please advice!
Hi Deb
All the funds in your portfolio are very good. There is no need to stop any SIP. Keep on tracking your funds. Think of getting out of a fund only if it consistently performs poorly over a long period of time. However you can add a multicap fund if you think it is required.
Hello,
I’m new to investing & was thinking to start my investment journey from new year. But I don’t want to invest in more than 1 funds. Also, I want to try with little money at first, so i was thinking to invest only Rs. 500 or Max Rs. 1000 in above MF as SIP. Can you please guide which of the above fund would be best for me? And do they offer Rs. 500 as in investment?
Thanks.
Hi Hyderali
Investment in equity mutual funds done to meet your long term goals and you have to remain invested at least for five years to see any meaningful returns. In the short term you should be prepared to even lose your money. You must have risk appetite for investing in equity funds. There is no point in investing without any goal just for the sake of trying.
Yes Anil, I’ve goal that is why I’m ready to invest, but its just I want to start with little & yes I’m ready to go with it for more than a year where I can get fruitful returns. Actually, I’m in college & therefore don’t have huge money to invest in diversified funds & wanted to start in atleast one fund. Could please tell me which would be better options to start with?
Thanks for the reply.
Hi Hyderali
You can not hope to get any fruitful returns if you invest only for one year in equity mutual funds. Chances are that you will lose your money and will never think of investing in mutual funds again. If you go through the tables given by Hemant you will find that even the best mutual funds have given negative returns in the past one year and even in the past five years the returns of equity mutual funds have not been spectacular. The lesson for you is that investment in equity mutual funds is a long term play of more than five years. I would advise you to stick to only bank/post office deposits for short term investments . Don’t try to burn your fingers by investing in equity mutual funds for short term.
Hi Anil,
I really appreciate your help to other readers but please click on REPLY button
Hi Hemant
Yes, you have pointed it out to me earlier also. Sometimes I just forget to hit the reply button.
Hi Anil,
Really appreciate for your help but I’m little bit confused as I didn’t said anything about equity funds in my previous comments.
Okay as you said I’ll not invest in Equity mutual funds but which bank/deposit funds are best for short term investments. Please let me know.
Thanks again for your help.
Hi Hyderali
For short term investment of small amount you can consider bank/post office recurring deposits.
Nice article
want Anil’s & your opinion about Canara robeco equity diversified (G) & ICICI PRUDISCOVERY (G).I have sip in this 2 funds since 2 years & want to continue sip for 10 years.
Are this good funds?
Also i want to the returns given in above table are of sip or lumsump investment??
Hi Bhavna
Canara Robeco Equity Diversified is a five star large and midcap fund and ICICI Prudential Discovery is a four star mid and small cap fund. Hence both are obviously very good funds. You can continue your SIPs in these funds. Since your time horizon is for ten years I would suggest that you must continue to track the performance of these funds on a regular basis at least once a year. Some funds do lose their stars in the long term.
Regarding the returns given in the tables I do not think that these are SIP returns. However, Hemant will be in a position to clarify.
Thanx for the reply.
Where can we get both the lumsump and sip return of a particular fund for 3 to 5 years duration?
Hi Bhavana
You can refer to the fact sheets of mutual funds issued by fund houses to get all the information pertaining to the funds.
Hi Bhavana
Hemant has provided a link which can be used by you to download the condensed fact sheets of the funds. These fact sheets do not provide SIP returns. I am sure SIP returns can be obtained from the detailed fact sheets provided by the fund houses.
Dear Hemant/Anil,
I am 29 years old and started investing in the below funds thru SIP since last 2 months. I am planning to continue my investment for 10 years.
Kindly check and let me know any modification is needed. Thanks in advance.
Large cap
Franklin India blue chip (Rs.2000)
Icici focused blue chip (Rs.2000)
Large and mid cap
HDFC top 200 (Rs.3000)
Multicap
HDFC Equity (Rs.2000)
Mid and small cap
IDFC Premier Equity (Rs.2000)
Gold
Reliance gold savings fund (Rs.4000)
Total: Rs.15000 per month.
Regards,
Karthick.
Your portfolio is well diversified. You can continue investing in them for longer term provided you check the performance of each once a year. You can consider another multicap fund just to avoid bias towards one fund house. However looks like gold is having 25% weight in your overall portfolio which may not be appropriate, normally one should not invest more than 5-10% in gold. Do you also understand the disadvantage, charges etc.. of any of the gold funds?
Hemant please write article on various gold funds. As i can see many people are now stating SIPs in such funds.
-Purvesh
Hi Purvesh
I think Hemant has already written a lot regarding investment in gold and gold funds. Yes, many fund houses have come up with their gold funds last year but it does not make any sense to me. All gold funds are more or less similar.
Hi Karthik
I am in complete agreement with what Purvesh has written. Your exposure to gold seems to be on the higher side. Moreover you should not be investing in two funds of the same fund house even if two funds are quite good. It makes sense to retain only one fund from HDFC fund house to have proper diversification across fund houses.
Hi Purvesh/Anil,
Thanks a lot for your valuable inputs. Will modify my portfolio as per your suggestion.
Regards,
Karthick
Crisp and to the point article, thanks Hemantji. Past 1 year performance are scary. I wanted to ask you something about how Mutual Funds operate.
So, every year, does fund house deduct their expenses (expense ratio) from our investment, be it a year of loss or gain, and that continues for the life of the investment, is it?
Hi Mansoor,
They deduct expenses on daily basis from the assets – this does not depend on profit or loss.
Hi Hemant
I want to know HDFC Prudence Fund comes under which category, many people call it as a awesome MF, but you did not mention anything about this MF, can you please clarify.
Thanks
Hi Anwar
HDFC Prudence Fund comes under the category of balanced funds.
Hi Anil
Thanks for your reply.
So we should invest in Balance Funds or not, because nothing hase been discussed regarding balance funds in the above article.
Also, What is your suggestions about Balance Funds and INDEX Funds.
Hi Anwar
Please read my first comment at top to get your answer regarding balanced funds. Index funds are passively managed funds. During the last year a large number of actively managed funds have managed to beat the index. Hence it is better to invest in actively managed funds which can consistently beat the index.
HDFC PRUDENCE FUND is a “must” in any investor’s core portfolio.
HDFC Prudence Fund will provide good hedge against sharp equity falls.
If any investor wants to invest in only ONE Mutual Fund, then THIS is the Fund, the HDFC PRUDENCE FUND.
Hi Srikanth
I am surprised to see your infatuation with HDFC Prudence Fund. While I have nothing against this fund but getting emotionally attached to a fund is surely not a good sign. There can never be a one size fits all type of solution as far as investment in mutual funds is concerned. Every investor has to build his own portfolio based on his requirements and risk profile. No fund can ever become must in any investor’s portfolio.
Investing in only one fund can never be a sensible approach.Two or three funds are required to have diversification across category of funds and fund houses to spread the risk.
Herd mentality in investment is not desirable.
Hi Hemant,
Thanks for sharing this article. But it has left a lingering worry in my mind regarding my SIP investments. I had started investing in May 2011, and since then as you know, the markets have fallen and my capital has eroded by about 10%. I had carefully selected funds based on my appetite, and at the time all were 5 star funds.
My investments were in HDFC Top 200 (3500), Quantum Long Term Equity (3000), IDFC Sterling Equity (2000), DSPBR Small and Midcap (2000) and HDFC Prudence (2000).
I had mentally decided many times that I will rough it out and play the waiting game during market crashes, and intend to stay long term. But over time I felt that I made a mistake with DSPBR. I should have just kept one Small&Midcap Fund, and that too IDFC Premier Equity Plan A.
I am 30 years old with a good risk appetite, and I have diversified in FD for my short term goals and PPF as a long term tax saving debt instrument, and all my insurances are in place.
My question to you is that, since star ratings keep changing over time, and sometimes nobody is perfect in choosing the perfect fund, some selected funds appear weaker compared to competition which is only noticed months or years down the line. So what should one do in such a situation?
I hope you understood my question.
Thanks,
Sunnydoc
Hi Sunnydoc
Yes, I have understood your question and I can understand what you are going through. Last year , the benchmark index Sensex fell 22%. It is inconceivable for an equity fund to deliver positive returns in times like these. The next best thing for funds to do is to atleast do better than the sensex or their own benchmark. The silver lining in the dark clouds in 2011 has been that 58% of the diversified equity funds and 79% of Mid/small cap funds did better than their respective benchmark index. Doing better means falling less in this case.
Someone has rightly said that equity investing is an art of creating wealth. Unfortunately it does not fit neatly into yearly baskets. Sometimes you may be rewarded very soon and sometimes it takes much longer. The story works because if you buy cheap, you will be eventually rewarded for your patience. You never lose if you buy cheap even though you may make meaningful returns after a considerable period of time.
Thanks for the encouraging reply. So then I will just wait and watch. Will reassess at the end of one year.
Sunnydoc
Yes, Sunnydoc that is the correct approach.
Thank you.
Hi Hemant & Anil.
I am long term investor with following portfolio in Mfs. Kindly suggest i m on right way or i have to switch out from some funds?
HDFC Growth fund 1000 P.M
ICICI Pru Dynamic Plan 1000 P.M
ICICI Prudential Focused Bluechip Equity 2000 P.M
IDFC Sterling Equity 1500 P.M
Reliance Equity Opportunities fund 1500 P.M
Reliance Gold Saving Fund 1000 P.M
Hi Kawardeep Singh
Diversification across fund houses is desirable to spread risk. it is preferable to select only one fund from a fund house.
Thx Alot Mr. Anil
I will try to diversify my funds in different fund houses once it complete there lock in period to avoid exit load.
Hi Anil,
Thanks for your advise. Do i need to switch out some funds and buy new funds of different fund house or i have to stop future sip in existing funds?
Hi Kawardeep Singh
Review the performance of your portfolio after you complete one year.Then you can think of exiting the non performing funds and build a new portfolio diversified across different category of funds as well as fund houses.
Hi Hemant,
I want to take SIP of ELSS can u suggest me which one is gud & is it necessary to open a Demat account for the same.
Hi Asha
Demat account is not required for investing in ELSS mutual funds. You can go for Canara Robeco Equity Tax Saver.
Good selection of funds based on the basics.
One suggestion to consider the evergreen hero – HDFC Prudence Fund. This really helps an investor with a decent equity, debt mix and takes care of re balancing to some extent.
Hi Melvin Joseph
No doubt HDFC Prudence is a very good balanced fund. One golden rule of investment is that one should never fall heads over heels in love with any fund.Tracking the performance of a fund is very important. During the last year many balanced funds have performed better than this fund.
HI Hemant,
I am very thankful for your suggestion on mutual funds, may u answer my some of questions? I’ll be grateful to you
i am investing through S.I.P. in following funds
ICICI focused bluechip equity retail Fund growth-1000/month
HDFC equity fund growth-1000/month
Hdfc top 200 growth-1000/month
Relaince gold saving fund 1000/month
Reliance pharma Growth-1000/month
Idfc premier equity fund groth-2000/month
Idfc Sterling equity fund-1000/month
Birla Sunlife Midcap fund groth invested 25000 rupees through SIP now terminated this SIP because it was giving least performance as investment is 25000 but current value is 20240 rupees.
my question is did i do right to stop BSL Mid Cap fund SIP?
as you have given return of Mutual funds, is it return thorough SIP or one time investment?
what are the returns through SIP of these funds?
Am i carying a right portfolio of Mutual fund SIP?
Thanks & Regards
Ashish Bansal
Ghaziabad
Hi Ashish
Your portfolio lacks diversification across fund houses which makes it risky. You should be investing in only one fund of a fund house. You can get SIP returns from fact sheets of fund houses.
Thanks Anil, Y0u mean to say i should quit of 1 fund of a fund house if i am holding 2 funds from a same fund. as i am having 2 funds from HDFC 1 is top200 and another equity growth then from which fund i should quit? same from IDFC i am having 2 funds i.e. Premier equity plan A growth and idfc sterling equity, then from where i should quit. and same in reliance i am having Relaince Gold saving fund and relaince pharma gold, here which fund i should quit, as i have read hare there are some funds which gives tax rebates which fund is giving best return and what return? please answer.
Thanks & Regards
Ashish Bansal
Hi Ashish
You can keep HDFC Equity and IDFC Premier equity. Merge other fund of HDFC and IDFC with these funds.
ELSS Funds are meant for tax saving. Check the returns of the selected fund from its fact sheet.
Dear Anil, as i asked u first time also about the returns of mutual fud through SIPs. my question is you showed returns of many mutual funds, these returns are based on 1 time investment or on the bases of 12 instalments of SIPs? like if a fund is giving 30% return in 3 year then this return is on whole 3 year amount including last month’s sip? or its on completion of every instalment’s 36th month, then what is the average returns of these funds through sips. like if i m investing 1000 rupees/month what will be the return and what will the actuall value as per the last performance. i know it’s not sure bcos its based on market but i m asking as per last performance
Hi Ashish
Please refer to the fact sheets of the fund houses to get SIP returns.
from where i can get the fact sheets of the fund houses to get sip returns?
in this article i could not find this……
regards
Ashish Bansal
Hi Ashish
You can get all information from the fact sheets which are provided by the fund houses.Moreover, you can get information regarding all possible types of returns from Value Research website.
HI Hemant,
I am investing Rs 1500 monthly through SIP in SBI magnum tax gain. The performance of the fund is not good in these days. Can I stop the SIP or continue? Please advice.
Hi Givind
If you are not happy with the existing fund, you can look for a better performing fund.
Dear Anil,
Thanks for your reply.I will stop the further SIP in the fund and try some other fund in the category.
hi anil/hemant my income is 25k unmarried ….as market is very low so cant we invest directly into equities per month 2000 or 3000 rs or its good to go for any mutual fund because so many people told me that your saving will be almost double in 3 years …almost every share is at its low…..please suggest me 2 mutual funds where should i start ….and to whom we have to contact…shall i go by any broking firm or what…..thanks…what should be my overal money if i invest 3000 per month for 10 years in sip…..and what we have to do if we dun wan to continue through the 1 fund…after how many years we can take back our money…
Hi Varun
While it is true that investments in equities have potential to give high returns in the long term, no one can say how much returns you can actually get. You can also lose your money. Keeping track of markets and stocks is not possible for everyone. Mutual funds are a better option. You can start your investments with one large cap and one large and midcap fund. You can get in touch with the fund houses for this purpose.
Hi Hemant / Anil,
Now i am 30 and i am planning to start my investment via SIP. I planned to invest on the following schemes :
Fidelity Tax Advantage – Rs.1000 (It will run for more than 10 Years)
HDFC Top 200 Equity – Rs.1000 (It will run for more than 10 Years)
DSP BR Short Term – Rs.1000 (As i may need some cash at the end of 2 years)
I will increase my investment in coming months.
Hi Prabhu
It is unlikely that your ELSS fund will exist for 10 years. Keep tracking your funds.
Hi Anil,
So does the ELSS schemes change for every 5 years or so. I am not clear anil as i am just a novice. Can you suggest me a plan otherwise.
I need a long term equity scheme which i am planning to continue for more than 10 years minimum. Then i need a ELSS scheme for tax saving purpose.
Hi Prabhu
After implementation of direct tax code no tax benefits will be available from ELSS funds. So the fate of all ELSS funds hangs in balance. We don’t know when DTC is likely to be implemented. Let us wait and watch.
Thanks for the explanation Anil. So i will pick up one more diversified fund instead of ELSS, which will not impact if DTC is into picture.
Hi Hemant,
First of all i want to say thanks for all your articles as they provide good understanding of financial planning and
investment. I have gained a lot of knowledge (atleast to think seriously about investments)
I am 30 Years old modrate risk taker investor and just started investing in SIP. Following is my SIP portfolio.
—————————
1- Large Cap
Franklin India Bluechip Fund – 1000/-
2- Large and Mid cap
HDFC Top 200 (Equity) – 1000/-
3- Mid & Small Cap funds
SBI Magnum Sector Umbrella – Emerging Business Fund – 1000 /-
4- Balanced
Canara Robeco Balance fund) – 1000/-
5- Tax saver
Reliance Tax Saver Fund – 1000
6- Dept fund
Not decieded (Birla Sun Life Income Fund can be an option) 1000/-
———————————
Please review it and give me your suggestion which can help me in future. I still have to decide on one fund (6th one) so i can act accordingly.
Hi Ashish Singh
There is no need to consider one more fund. If you want to make additional investment, it can be made in one of the existing funds. Keep tracking your funds.
Hi Anil,
Can you give your point of view on first 5 performance from long term perspective? I am ready to invest for 15 to 20 years. Increasing an additional amount is not an issue.
Thanks for your comment. But I also wanted to know about the diversification of my portfolio according to me (moderate risk taker). I wanted to invest in dept fund so that it can give me some assured return even if market misbehaves
Hi Ashish
No fund can give you assured return. For assured return consider bank fixed deposits. You already have some exposure to debt as you have invested in a balanced fund.
Hemanth, Anil,
Can you please tell us how to exit a fund when it starts loosing its star?
For e.g. how long should we keep it under watch before deciding to exit?
How should we exit at one shot or STP?
Should we stop the SIP as soon as it starts loosing star and keep monitoring its performance?
As I can understand from this article, 5 and 4 star rated funds are good, then does it mean we need to become alert at soon as a fund becomes 3 star or what is the threshold point?
I think, having a good strategy for exit is as important as entering into equity MF investment otherwise there is a chance of becoming Abhimunya
Hi Kannan
I agree that a good strategy to exit is even more important than entry strategy but it is very difficult to implement. There can not be any hard and fast rule applicable to all investors as each investor has to build his portfolio based on his requirements. Same fund in different portfolios can have different significance. Funds in core will probably require different treatment than funds in satellite. It will also depend on the exposure a particular fund has in the portfolio.
If the funds initially selected for building the portfolio were all five star funds, it is unlikely that all funds will suddenly become two or three star funds. Moreover this is also possible that a three star fund may actually perform better than a five star fund. Star ratings are to be used only as initial filter while selecting the funds.
It is important to track the performance of all funds in the portfolio atleast once a year. The performance can be compared to the index as well as peers. If a fund performs consistently poorly based on this criteria for a considerably long period, only then should one think of exiting the fund. Performance of past three and five years should be a guide. Short term performance can not form the basis for exiting the fund.
Initially only the new investment in the fund should be stopped. Redemption should be considered only if the funds are urgently required. Withdrawing money when markets have corrected drastically is not advisable.
Hi Hemant/ Anil,
I am 28 and married. I havent done any investment in MF/ELSS till now, but want to start as early as possible. My financial goal is to receive surplus amount over long time. For long term saving i am going to invest in PPF.
I plan to invest 10k/month through SIP in MF. Can you please guide me with the MF investment considering all facts and figures.
Thanks,
Shashikant
Pune
Hi Shashikant
Your financial goal is not clear to me. You must be clear about the target amount as well as the time horizon of the investment. If your time horizon is around ten years you can consider investing in diversified equity mutual funds. Select three or four funds of different categories with not more than one fund from each fund house.
Hi Anil,
My i want to invest for around 10-15 yrs and target amount should be 50Lakhs.
Please provide me the list of MF to achieve the goal.
Thanks,
Shashikant
Hi Shashikant
Select one large cap fund, one large and midcap fund, one multicap fund and one mid and small cap fund from the tables given above.
Dear Hemant / Anil,
I was started a SIP in IDFC SME MF. But now I found that all sites suggesting IDFC Premier Equity MF for small and mid cap.
So what should I do now? Should I stop current and start new SIP in IDFC Premier Equity?
Also in that case what should I do ? leave the money as it is or withdraw ?
Hi Kiran
It is always preferable to ask first and invest later. You can start SIP in IDFC Premier Equity if you want. Normally one should withdraw money only if one badly needs it.
Hi Hemanth,
to introduce myself I am Archana Kodati, and a fresher in Investment
.
When searching for best investments into gold, came across your blog. this site is so useful and informative for planning who is on cross road of Investment and not knowing how to save money for greater gains. Thanks a lot. But before getting into it, I would like to know more about MFs and markets, is it possible for you to educate me on the same?
Hi AKodati
Just click on Hemant’s Free e Course.
Hi Anil / Hemanth,
After going thru the free e-course and lot of thinking, starting SIP with the below plan, pls suggest if that sounds good
1- Large Cap – 3 Yrs
ICICI Prudential Focused Bluechip Equity – 1000/-
2 – Large & Mid Cap – 10 Yrs
HDFC Top 200 – 1000/-
3 – Mid & Small Cap – 5 Yrs
IDFC Premier Equity Plan A – 1000/-
4 – Short Term Mutual Funds – 1Yr
Franklin Templeton Templeton India Short Term Income – 1000 /-
Also pls suggest how to start these? Can I do it online or meet an agent in any MF company?
Hi Anil / Hemanth,
Thanks a lot for the reply and the free e-course.
After going thru the e-course and lot of thinking, starting SIP with the below plan, pls suggest if that sounds good
1- Large Cap – 3 Yrs
ICICI Prudential Focused Bluechip Equity – 1000/-
2 – Large & Mid Cap – 10 Yrs
HDFC Top 200 – 1000/-
3 – Mid & Small Cap – 5 Yrs
IDFC Premier Equity Plan A – 1000/-
4 – Short Term Mutual Funds – 1Yr
Franklin Templeton Templeton India Short Term Income – 1000 /-
Also pls suggest how to start these? Can I do it online or meet an agent in any MF company?
Hi AKodati
Your fund selection is good.I find that you have fixed different time frames for different funds. Do you have different goals in mind?Investment in equity mutual funds is done to meet your long term goals.You can hope to get some meaningful returns if you remain invested for more than five years.In the the short term it is quite possible for you to lose your money. Hence, I would not advise you to invest in equity mutual funds if your time horizon is less than five years.If you can increase your investment horizon then you can consider investing in these funds.
For investing you can approach the offices of the fund houses.
Thanks a lot Anil for replying.
I have a daughter of 1.5 yrs old, all the investment is planned for her at different stages and hence different time frames.
In the above article I have come accross some short term plans hence thought tht wud be a gud one to opt to meet short term requirements. If MF is not the right one for short term, cud you please suggest what will be the best one?
Hi AKodati
For time frame of up to three years invest only in bank recurring/fixed deposits.
For time frame of three to five years you can consider investing in some balanced fund like HDFC Balanced Fund.
For time frame of more than five years consider investing in diversified equity mutual funds.
Hi Anil,
Waiting for your reply.
Hi Hemant,
great article. can you write something on “Trail commissions” and other innovative ways the agents make money? regds
Hi Shreedhar
I have recently come across a very interesting article by Monika Halan -In defence of trail commissions.
A payment gateway that facilitates appropriate compensation for the distribution of and advise on financial products, without being clunky, remains elusive. Can trail commission, with regulatory caps and handshakes, be the way forward?
You can read it at Mint Money.
Hi Hemant
It seems age is finally catching up with me. Another instance where I forgot to hit the reply button.
Hi Hemant
Good article ….
Please let me know about SBI Magnum Emerging Business Fund in Mid & Small Cap category to invest (SIP mode for long term)
Thanks in advance ..
Nagarajan S
Hi Nagrajan
It is a good but risky fund. You can consider it for investment if you have risk appetite.
Hi Hemant n Anil, U both r really doing an awesome kind of an education initiative about investments. Well done. I was new when i started reading ur articles. But now i am understanding the basics. Since i am new, i first want some secure returns, so I’ll deposit in PPFs and FDs. But later on say in 2-3mths I’ll start using MF. Thank u both n pls be educating like this.
Hi Prashant
Have proper asset allocation in both debt and equity and build a diversified portfolio.
Hi Brother,
My name is Ravi Age 30. My 9 month daughter name is VIDUSHA. i am planing her marriage @2035. So now i am ready to invest monthly SIP @ rs.2500 on mutualfund @24 years . please tell me which mutual fund (fund name please) is best…i am ready to take risk .
Hi Ravi
You can consider investing in ICICI Prudential Focused Bluechip Equity and UTI Opportunities Fund by dividing the amount. Investing in two funds will spread your risk across two fund houses. Since your time horizon is long it is important for you to keep tracking your funds regularly.
Hi Anil & Hemant,
Thanks for the great article and sharing your expert views. Recently, I have opened Term &Health insurance w.r.t protection n health guard.
Now, I want to invest in MF SIP. I’ve plans to invest around 3-4K per month fpr period of 5-10 yrs (it may increase too gradually). But i am totally new to MF n need need your advice.
After doing some online research like Value Research/Rupeetalk n your article here my selection/picks. Please help me with the money break n whether shoud invest in all this funds some amount or few :
LARGE CAP : ICICI Prudential Focused Blue Chip Equity
LARGE & MID CAP : UTI Oppurtunuties
MID & SMALL CAP : – Tata Dividend Yield Fund
– Birla Sun Life Dividend Yield Plus – Growth
MULTI CAP : HDFC Equity Fund
-Jai
Hi Jai
Your fund selection is very good. Select only one of the two funds in mid and smallcap space. You can invest Rs 1000/- in each of the four funds. Keep tracking the funds after starting your SIPs.
Thanks for the update Anil. Currently, i’ve budget of only 3K p.m so can let me know which one to drop. I was also interested in ELSS but bcoz of DTC not sure if make sence to invest only for a year.
Hi Jai
You have to take a call on this.You can drop any fund.It will not make any difference.
Thank u sir thanks for ur advice .. i am start to invest tat 2 funds.. thank u sir.
Ravi, you are welcome.
Anil & Hemant,
What your view on fundsindia. Whether if’s safe to go with them?
Hi..
Gr8 work TFL. I’m glad that i came to this website before i started investing. I am 27 yrs, just started my career and a novice in the field of MF. I’ve picked few MF to invest from this mnth onwards. Can you comment on my selection. I’m aiming at a long term of 15+ yrs for my child’s eduction/ marriage. I’m also planning to invest in gold ETF later. Thanks in advance.
DSPBR Top 100 Equity : 1000/ mnth
ICICI Prudential Focused Bluechip : 1000/mnth
HDFC Top 200 : 1000/mnth
Birla Sunlife Dividend : 1000/mnth
IDFC Premium Equity Plan A : 1000/mnth
SBI Emerging Business Fund: 1000/mnth
Hi docanoop
I think the minimum investment permitted in IDFC Premier Equity is Rs2000/- per month. Please check it from the fund house. Your fund selection is fine.
Hi Anil,
For monthly Rs.6000 I think Docanoop can select max of two funds. He can invest Rs.3000 in two good funds. I guess to0 many diversification across funds for small amount will not yield good returns. Kindly share your opinion.
Hi Karthik
Yes, I agree too much of diversification is not needed.If you select four funds one from each category,that should be fine.
Hi Anil
Thanx a lot for your reply. I’l check it up.
Hi Heman/Anil
Can you guys please suggest us a book on Finance & Investment for Beginners.
I want to study about Mutual Funds, Equity Funds, Debt Funds, Shares and Stocks, and how does a common man start investing in Indian Share Market.
It will be great help for all of us, and then we can ask you more logical questions
Thanks in advance.
Hi Anwar
Instead of looking for a book it will be better if you start reading some personal finance magazines.To start with you can consider Mutual Fund Insight.Later on you can go for Wealth Insight.Both these are from Value Research and contain useful information.
Personally I feel that if you go through old articles of Hemant, you will not need any other book.
Hi Hemanth/Anil,
TFL provided me a great idea to start my investments in mutual funds. Keep Going..
I have decided to invest in these below funds in SIP. Please advice me if this is good selection or need any changes. My age is 30 and my salary is 40,000 and married. I can invest 15000 in a month towards savings.
Already started my investment in PPF 5000 per month. And having HDFC SLClassic Insurance with a premium of 2500 per month. Please advice on these investments.
Large Cap Funds:
DSP BlackRock Top 100 Equity (2000)
Large & Mid Cap Funds:
HDFC Top 200 Fund-Growth (2000)
UTI Opportunities Fund (1000)
Multi Cap Funds:
Quantum Long Term Equity Fund – Growth (1000)
Mid & Small Cap Funds:
IDFC Premier Equity Fund – Plan A – Growth (1000)
Expecting you valuable response. Thanks
Hi Kumar
Your fund selection is very good. I think you will have to probably increase your investment in IDFC Premier Equity to Rs2000/- per month which is the minimum amount permitted.You can check this up with the fund house.
Hi Hemant/Anil,
I think u miss the below question raised by Karthick, I have also same doubt, please clarify.
========================================
karthick January 18, 2012 at 4:31 PM
Hi Anil,
For monthly Rs.6000 I think Docanoop can select max of two funds. He can invest Rs.3000 in two good funds. I guess to0 many diversification across funds for small amount will not yield good returns. Kindly share your opinion
Hi Anwar
Yes, I had missed Karthick’s question.Thanks for pointing it out.It has been answered now.
Thnx Anwar for the suggestion. As i said, i’m a beginner and appreciate your valuable suggestions. Can you pl tell me which MFs i should go with and which all to omit? Thanx
Hi,
Excellent article. I am 32 yrs old. For the last 1.5 yrs, i am investing around 12000/month on MF SIP. Can you please review and give ur comments on my portfolio:
HDFC Top 200 (4000)
ICICI Pru Dynamic (2000)
HDFC Balanced(4000)
ICICI Pri Discovery(2000).
I am planning to invest for the next 10 yrs atleast and looking to increase my investment (3000/ month) on SIP. Could you please suggest some good funds for my portfolio?
Regards
Sundar
PS : As on date, my portfolio is on the RED.
I have added IDFC premier equity (G) -2000/- to my SIP portfolio today. Let me know your views.
Regards
Sundar
Hi Sundar
Your fund selection is good but your portfolio lacks proper diversification.This makes your portfolio very risky. You have two large &midcap funds and two mid & smallcap funds where as there is no pure large cap and multicap fund. Moreover you have two funds each from HDFC and ICICI Fund house.
You can consider changing your portfolio by including the following funds :
ICICI Prudential Focused Bluechip Equity
UTI Opportunities
Quantum Long Term Equity
IDFC Premier Equity
HDFC Balanced
This portfolio is properly diversified across the categories of funds as well as fund houses.
Thanks Mr.Anil for your valuable advice. My next question is how often do i need to evaluate my SIP portfolio if I have long term investment plan (say 10-15 yrs). I am looking to modify my portpolio as given below:
ICICI Prudential Focused Bluechip Equity – 3000/-
UTI Opportunities – 2000/-
Quantum Long Term Equity – 2000/-
IDFC Premier Equity – 2000/-
HDFC Balanced – 3000/-
I am planning to retain HDFC Top 200 – 2000/- since I have some confidence on Mr.Prashanth Jain (fund manager).
Could you please check and let me know whether it looks OK.
Regards
Sundar
Hi Sunder
While I have nothing against either HDFC TOP 200 or the fund manager as both are good, my advice to you would be not to get emotionally attached either to a fund or a fund manager.Your portfolio already has five good funds and it is properly diversified across fund houses as well as category of funds.Adding one more fund will not serve any useful purpose.It will only amount to over-diversification.
Tracking the funds atleast once a year is very much required so that corrective action can be taken whenever the performance of a fund is seen faltering.
Thanks again for your time. One more question. Since most of my MF-SIP investment is on RED as on date, is it better to withdraw the money fr0m one fund and transfer the deeds to purchase another fund or close and retain the money in the existing fund and start a new SIP. please advice.
Regards
Sundar
Hi Sunder
You have been investing in mutual funds for only the last 18 months.Last year the benchmark index sensex fell 22%. It is inconceivable for any equity fund to give positive returns in times like these.So it is not surprising that your mutual fund portfolio is giving you negative returns.You should not be concerned by this.This is an extremely inappropriate time to redeem your investments. Just stop your SIPs in the funds you do not want to retain in your portfolio and start your SIPs as per your new portfolio.
Thanks alot for your advice. As suggested, i have cancelled my existing SIPs(not redeemed) and started new SIPs. Can you please advise on what i should do with the corpus on my existing funds. Do I redeem the money from the existing funds when the return from the investment is on the positive side and reinvest it on the new funds? Please advice.
Regards
Sundar
Hi Sunder
Normally we go for redemption when either we are badly in need of money or we have better option available for investing.For the time being there is no option but to wait and watch. Remember, investing in mutual funds is a dynamic process. It is quite possible that the funds in which you have discontinued the SIPs may actually turn around and give you good returns later on because they are basically good funds.
Moreover it is also quite possible that some fund in your portfolio may lose its shine after a few years. So the key is to keep monitoring your funds and take the call at the appropriate time.
Thanks alot Mr.Anil for your time. As suggested, i will review my SIP portfolio every year.
Regards
Sundar
Dear Sir,
Kindly review my selection and comment/advice.
I have selected following mutual funds and want to invest around 10000 per month. I have only long term goals. Kindly breakup the amount in following funds:
ICICI pru focussed bluechip equity fund(g)-Large Cap
IDFC premier Equity Plan A(g)- Mid & Small Cap
HDFC Equity Fund(G) – Multicap
UTI opportunities- Large & Mid cap
BSL 95 fund ( Balanced Fund)- or Suggest any other in this category( if required)
Please correct my errors and help me. I will start investing after your precious comment.
Many Thanks.
Hi Inder
Please read my comment to Sundar above. Your fund selection is good.The money can be invested equally in four or five funds.
sir,i would like to know where can i start sip mutual fund?where should i go?
Hi Dhanya
You should go to the offices of the fund houses.
Hi Hemant
I have come across one very interesting comment regarding ULIP of UTI. I would like to know your view on this.
UTI’s ULIP is Different
UTI’s ULIP is different from the other ULIPs, in which you invest a fixed amount and you get insurance for a very less amount. UTI’s scheme is predominantly a mutual fund, and 2.25 per cent of your invested money is considered as insurance premium.
We have always advised investors to not mix insurance with investment. But if you consider the UTI ULIP to be a mutual fund, you get free insurance coverage from it because any mutual fund charges around 2.25 per cent as fees.
hello sir, i want yo make a sip of rs 3000 pm in hdfc top 200 mf. how can i invest in this plan and where and to whom should i contact . can i make sip through internet banking or should i pay cheque for that.
Hi Sushil
You can go to the office of HDFC Mutual Fund or CAMS.
sir can u please suggest me that whether to go for value averaging investment plan(vip) or sip…..because peple r saying that vip is giving much better returns than sip…..thanks
Hi Varun
Simple monthly SIP is the best.
Dear Sir,
I have a query..It may sound stupid but its creating doubt to me.
As per your advise, I have started SIP last week in 3 funds and registered these SIP’s for 120 months.
Now, my doubt is- If I wish to continue SIP after specified time of 120 months, then what I will have to do? Register again for SIP of same fund or I can extend the same SIP.? I mean that will the new units get added to earlier accumulated units or the new SIP will start accumulating from zero again?
Does extending the SIP later, affects Compounding Power?
Which is better way, elongating the interval now at starting, or later, or both options are equivalent???
kindly clear my doubt. I wish to invest for 20-25 years.
Thanking You.
Hi Inder
Whenever you invest in any fund of a fund house a folio number is created in your name. With that folio number you can invest anytime in any fund of the fund house. It is always possible to increase or decrease the duration of the SIP. Initial tenure of the SIP is not important. A couple of months before the expiry of the tenure of your SIP you get the forms from the fund house for extending your SIP. You can avail the facility if you want. It does not make any difference whether you extend the same SIP or start a new SIP. So long as your folio number is same all the units are reflected in the same statement.
Thankyou very much sir for clearing my doubt.
I am 34 years, new to SIP investiments , my target 13 years for son eduction , monthly Rs 6000 at the moment.
Franklin India Bluechip OR ICICI Pru Focused Bluechip Eqty (G) – Rs 2000
HDFC Top 200 – Rs2000
IDFC Premier Equity – A (G) – Rs 2000
Could you please suggest above my port folio is very good ? any suggestons
I contacted HDFC but they only have funds from HDFC ,
Do let me know whom to contact to invest on above funds?
Hi Eswar
Your fund selection is fine. You can contact Fund houses or CAMS.
Hi Anil.
Thanks for quick reply. You said my port folio is fine. but can I expect your comment as very good or excellent , so what should I add / remove to get such rate from you ? so that I will more confident.
Contacted fund houses ex, HDFC, They said I can choose any fund from HDFC but not other funds , CAMS is that correct ?
how about moneycontrol ?
Can I buy and manage through online ?
Hi Eswar
Investing is a dynamic process. You can not sit on your portfolio after selecting the funds. The performance of the funds has to be constantly monitored. It is possible that the performance of even the best fund can falter. Hence it is not proper to use the words like excellent.
CAMS are registrars and transfer agents for fund houses and you can contact them for all the fund houses handled by them.
Hi Anil,
Thank you for suggestions, How frequntly I should monitor 6 / 12 months once or yearly , then switch over to other funds if the performancy is not good ?
incase if it not performing well then what to do for all ready invested. can we withdraw them or let it and choose otherfunds?
I heared most of the funds exit load is 2%, CAMS will charge for the service?
can i buy or sell online ?
Hi Eswar
Monitoring should be done atleast once a year. However one should not be in a hurry to exit the funds. The performance of the funds should be checked against the benchmark index of the fund and category average/peers. You must think of exiting a fund only when for a considerable period of the time the fund performs poorly consistently. Exiting should not be based on short term poor performance.
Normally redemption is done only when the money is badly needed or a better option of investment is available.
Exit load is normally applicable only when you decide to exit before completing one year.
CAMS are registrars and transfer agents of the fund houses, They don’t charge anything for their services to the investors.
Hi Anil,
Thank you very much for your detailed information.
Hi Mr. Anil
I have doubt in my mind, if i want to switch one of my fund i.e icici pru infrastructure to icici pru bluechip equity.
1. Should i need to sell all units of my existing fund and buy units of new fund and continue SIP in new fund ?
2. Should i need to continue further SIP in new fund only. units of old fund remain in old fund ?
Or what if i want to change fund house ?
Hi Kawardeep Singh
If you give request to ICICI Prudential fund house to switch from your existing investment in ICICI Prudential Infrastructure fund to ICICI Prudential Focused Bluechip Equity then the amount already invested in the old scheme will be switched to the new scheme but your SIP in the old scheme will continue.If you don’t want to continue in the old scheme then you have to tell them to stop your SIP in the old scheme.
For starting your SIP in the new scheme you have to give another application. You can retain your folio of old investment if you want.
Thx alot sir. Now i m clear about it.
Hi Kawardeep Singh
If you want to change the fund house then it will be entirely a new investment.
Hi Kawardeep Singh
While making a switch it is not necessary to switch all units of the old scheme to the new scheme. Partial switching based on the number of units or the amount is also permissible.
Sir what is ur suggestion to switch old units in to new units on lump sum then continue through SIP. As per my thinking value of money is same so u should not need to worry before switching.
Hi Kawardeep Singh
It is difficult to predict the future performance of both funds.Right now the performance of ICICI Prudential Bluechip Equity is better than that of ICICI Prudential Infrastructure fund.You have to take the call for switching now.
Hi Anil,
I’m 31 years old with moderate risk appetite. I had SIPs in
1. DSP top 100
2. HDFC top 200
3. Reliance RSF (G) &
4. Reliance Growth for Rs. 2500 each for 12 months from May 2010 to April 2011.
I stopped the SIPs for a while as I needed money for the downpayment of our new house. I would like to resume contributing 10k every month towards MFs for another 10 years for my son’s education.
As you know, my MF investments are in Red now. Please suggest whether I can continue with the same fund selection. I’m not very impressed with both of the reliance funds as their CRISIL rating is poor for sometime now. I don’t want any mid & small cap fund. Perhaps, I need a balanced fund too in my portfolio? Please advise. Many thanks in advance.
Hi Lakshmi
I am glad that you are very clear about your thinking.Since your risk appetite is moderate it will be a good idea to go for only balanced funds.You can consider investing in HDFC Balanced Fund and Birla Sunlife 95.
If you want to have three funds then you can also consider ICICI Prudential Focused Bluechip Equity.
Since you are investing for ten years it is important to keep tracking your funds atleast once a year.
Hi Anil,
Thanks for your prompt reply. I’m under the impression that DSP top 100 & HDFC top 200 are of the moderate risk category as they are in the large & multicap categories respectively. Is that correct?
Please clarify whether you suggest HDFC Balanced Fund, Birla Sunlife 95 &
ICICI Prudential Focused Bluechip Equity in addition to the DSP top 100 & HDFC top 200 or just go with the 3 funds that you have suggested.
Thanks, again.
Hi Lakshmi
As you have already stopped your SIPs in the funds mentioned by you I am suggesting that you should not resume your SIPs in these funds again and instead go for a new investment portfolio. However you should not redeem your investments in these fund unless you are badly in need of money as this is not the most appropriate time for redemption.
As far as risk is concerned some amount of risk is there in all types of mutual funds.Balanced funds are less risky as they are not pure equity funds due to the presence of debt element in them.Next in the risk are pure large cap funds.Then come large and midcap funds.
While building your mutual fund portfolio you should adopt core and satellite approach.80% of your portfolio should have core funds such as balanced funds,pure large cap funds and large & midcap funds. Core portion of your portfolio provides stability to your portfolio as it consists of funds which have proven long term track record and carry comparatively less amount of risk.
Satellite portion of your portfolio can have multicap funds, mid & smallcap funds, gold funds, sector funds and thematic funds. Satellite portion which is only 20% of your portfolio consists of risky funds which have a potential for higher returns.
Since you have a moderate risk appetite I have not suggested any satellite funds.
hi,
really its a good source of information and really help us in planning our future investment plans, pertaning to present market sceneario.
Thanks!
Hi Anil, I am 44 years & I have been investing on following funds-
UTI Oppoturities Fund (G) – Rs 1500
HDFC Top 200 – Rs.1000
HDFC Equity (G) – Rs.1000
IDFC Premier Equity – A (G) – Rs.2000
HDFC Prudence (G) – Rs.1500
Reliance Pharma (G)-Rs.1000
Reliance Gold Saving fund (G)-Rs.1000
Could you please suggest above my port folio ? any suggestons.
Should I do any changes and start any others fund category?
Please advice!
Hi bku
Your fund selection is very good.However your portfolio has not been properly diversified across fund houses.You have used three funds from HDFC fund house.When you select three funds from a fund house chances are that the funds are managed by the same fund manager.Firstly it reduces the diversification as one fund manager tends to use many common stocks for all the funds.Secondly if the fund manager falters in his selection of stocks it adversely affects the performance of all funds managed by him.Hence using three funds of the same fund house deprives you from the benefit of diversification and increases your risk.
While building your portfolio you should adopt core and satellite approach.The core will consist of large cap and large and midcap funds.The core will provide stability to your portfolio.Normally 70 to 80% of your investment in diversified equity funds should be in core.You have invested in two large and midcap funds but there is no investment in any pure large cap fund.I would suggest that you include one pure large cap fund like ICICI Prudential Focused Bluechip Equity in your portfolio.
Your portfolio has a satellite tilt which makes it risky. By investing in pure large cap fund you can restore the balance of your portfolio.
I am want to invest in Mutual fund around 30k for 20 yrs for my kids.
So, i am new to this. can you please recommend the MF that i can invest.
Hi Anil
You can consider investing in the following funds.
1 ICICI Prudential Focused Bluechip Equity
2 UTI Opportunities fund
3HDFC Equity Fund
4 IDFC Premier Equity
Invest around 75 to 80% in no 1 and no 2 and the remaining in no 3 and no 4.
Review the performance of these funds at least once a year.
Thanks Anil for your reply.
Hello Hemant Beniwal sir
I’m totally new to mutual funds can you please suggest me SIP’s for long term of 20 years or more
Hi Faseahuddin SD
Please read my comments to Anil above.
Hi Hemant,
I’ve two SIP of Rs. 2000 – ICICI Prudential Regular Gold Savings Fund (G) & ICICI Prudential Focused Bluechip Equity Fund (G). Planiing to start another five SIP 0f Rs. 2000 each – Quantum Long-Term Equity Fund (G) / ING Dividend Yield Fund (G) , HDFC Top 200 Fund (G) / HDFC Mid-Cap Opportunities Fund (G), DSP BlackRock Top 100 Equity Fund – Regular Plan (G), IDFC Premier Equity Fund – Plan A (G) and Reliance Monthly Income Plan (G).
Please guide & help me to select the two from first two options.
Regards,
Nirupam
Hi Nirupam
You seem to be investing in the reverse order. Normally one should look at investing in gold after having a portfolio of diversified equity funds. Exposure to gold should not be more than 10% of that to equity funds.
For proper diversification across fund houses only one fund should be selected from a fund house.
Reliance monthly income plan does not fit in the portfolio.
What is your objective of these investments?
What is the time frame of investments?
thanks Anil !
I’m 32 years old, this investment is for my retirement plan & time frame is 20 years.
I’ve started both the SIP (ICICI Fund House) from Oct.’11.
Please suggest now.
Hi Nirupam
Please adopt core and satellite approach. Large cap and large & midcap funds will form core. Mid & small cap, multicap, gold fund will form satellite. Invest around 75% in core and balance in satellite.
You can add these funds to your portfolio :
1 DSP Blackrock top 100
2 HDFC Top 200
3 Quantum long term equity
4 IDFC Premier Equity
These funds are enough.No need for Reliance MIP.
Invest Rs 2000/- each in 3 & 4 and divide the remaining between 1 & 2.
Thanks Anil,
one more query i have. I’m planning to invest Rs. 50k onetime in Kotak PSU Bank ETF for 1 year.
Please guide whether my decision is right or any other fund which you think better .
Hi Nirupam
It will be better to divide the amount among the existing funds.You can also think of adding one balanced fund to your portfolio.
Hi Hemant,
I m new in this feild ,so
guide which are to be good for me,. How to invest in SIP and where ?
Hi Gopal
Before starting investments it is important to know about you.
What is your age?
What is your income?
What is your marital status?
How many persons are financially dependent on you?
How much can you save per month?
How much can you invest per month?
What is your risk profile?
What is the objective of your investment?
What is your time frame for investment?
I have started investing in SIP since last year.at present I have sip’s in
UTI div yield 1000
ICICI bluechip 2000
BSL Dynamic bond 2000
HDFC Prudence 2000
Kindly suggest a suitable gold fund whether Reliance or SBI
are the above good choices to give me a good return of say appx 12%.
how much more should i invest so that after 10 to 12 yrs I have built a corpus of 20 to 25 lakhs
Hi Hemant,
You are doing a great job by educating common people of financial investments. Hats off!!
I have a query… My husband has been investing Rs.40,000 every year in a ULIP policy, ICICI Lifestage RP. He has paid for three and a half years, total Rs.1,40,000. And the returns are in red. Should he keep paying and wait for 5 yrs to complete, for good returns…. or should he stop paying and take out the money now? Please suggest.
Thanks in advance
Sir,
Right now, I am investing in following funds. started investment last month.
Icici bluechip equity fund(G)- 2500/m
UTI opportunities(G)-3000/m
HDFC Equity fund(G)-2500/m
IDFC premier Equity Plan A(G)- 2500/m
Also, I have DIYSIP in UTI Gold ETF-around 2500/m
Is my portfolio balanced?I dont think so. Kindly advise
—My wife also wish to build MF portfolio for 10-15 years horizon. and can invest 6000 per month. Kindly suggest, should she invest in funds/fund houses different from mine? How to choose the funds for her?
Many Thanks.
Hi Inder
Your fund selection is fine but your portfolio is risky as you are investing less in core funds and more in satellite funds.You should be investing around 75% amount in funds no 1&2. Your wife also can have similar portfolio but she should not be investing in gold.
Hello Sir,
Thanks for your precious response. Kindly help me in the balancing process, how to adjust it.
Hi Inder
Since your wife has not started investing so far she should invest only in balanced funds or large cap funds.You can also think of investing in HDFC Balanced Fund instead of HDFC Equity Fund which is riskier. This way your combined portfolio will become balanced and less riskier.
Dear Hemant,
I am a regular reader of financial articles.Some of your articles are praiseworthy.But what’s about HDFC MIP,TOP200,PRUDENCE fund?For the last two years they are giving either negligible or negative return.FRANKLIN BLUECHIP also falls in the same category.Can you tell me why one should invest their hard earned money in M.FS?The word “LONG-TERM” Is also farce.I can show you several funds are giving negative return for years.you say aged or retired people should invest in MIPs.But is their any future?
Hi dibyendu
Are you not aware of the disclaimer that all mutual fund investments are subject to market risks and past performance of the funds does not imply that in future also you will get that type of returns.If we see the performance of markets for the past five years, the returns from most mutual funds are very poor.The fate of all mutual funds is linked with the fate of the market.If the market gives negative returns you can not expect mutual funds to deliver positive returns.Those people who have no risk appetite should not be investing in mutual funds.
hello Anil and Hemant,
I am deepanshu age 23.
Your article and replies helped me lot to understand about investing in MF. As m too a novice to MF and planed to invest in them for my future goal. I am planing to invest Rs8000/ month through SIP.So want your advice on my investment plan:
large cap
DSPBR Top 100 Eqt Reg-G-2000/month
large and mid cap
HDFC Top 200-G-2000/month
equity multi cap
Tata Equity PE-G-2000/month
mid and small cap
ICICI Pru Discovery Inst I-G-2000/month
please let me know if this plan is ok or i need to do changes in it. My plan is to continue these fund for 7years atleast. So please enlighten me.
Hi Deepanshu
Your fund selection is very good.You have selected all funds with Value Research five star rating. However the ICICI Prudential Discovery fund mentioned by you is meant for institutional investors. You will have to invest in the fund scheme meant for retail investors which carries a four star rating.
Normally allocation of around 75% in core funds and 25% in satellite funds is suggested.In your case it is 50% in each.This gives your portfolio a satellite tilt and makes it riskier.Instead of investing Rs 2000/- per month in each fund you can consider increasing your investment in Large Cap and Large & Midcap funds to Rs 3000/- each and reducing to Rs 1000/- each for Multicap and Mid & Smallcap funds.
thanks Anil
So now i’ll go for ICICI Pru Discovery-G and TATA Equity PE-G 1000/m ecah and increase the amount in other two. Hey can you tell something about discounting rate??
Hello Hemant,
I am very new to SIP and mutual fund.
My age is 27 and now i am planning to take two SIP’s 1000Rs each for long term(10 years).
1.Reliance Equity Opportunities Fund
2.Franklin India Bluechip.
Please suggest.
Thanks,
Aditya
Hi Aditya
The funds selected by you are good.However, since you are a first time investor and the investment amount is small, I would suggest you to start with a balanced fund like HDFC Balanced Fund.After some time when you have more money to invest you can build a portfolio of diversified equity mutual funds following core and satellite approach.
So for a new investor in MF like me should select top fund in each category and start investing……I need to invest around 10000rs pm in MF….
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