how to switch from one fund to another

Let us say you have an investment in HDFC EQUITY FUND. If the fund does not do well as when compared with other funds in HDFC like HDFC TOP 200 or HDFC GROWTH - then you have the option of switching your investment from HDFC EQUITY to say HDFC GROWTH. Always do not switch until you have held the units atleast for 1 year - otherwise short term capital gain tax has to be paid. While switching there is no entry load for the new fund. Switching can only be done in the same fund house.
Also, remember, that it is always safer to switch from the same option i.e,. if you have invested in dividend payout, and you switch to dividend reinvestment, there will be no entry load., but if you switch to growth option you will be charged entry load, because nav of each option is different.
Best of luck

Pension Amount

Mutual funds are ideal investment options for retirement and child planning. However they must form only a part of such portfolios. Here's why. Capital protection is one of the foremost requirements of a retirement or education fund. And there is not a single mutual fund that carries a capital guarantee on your principal amount. For this reason you cannot afford to ignore instruments such as the Public Provident Fund (PPF), National Savings Certificate (NSC) and the like. These instruments offer a decent risk-free return on investment. However, these may not suffice for your post retirement or child planning needs. For this reason you could look at equity-oriented mutual funds to boost returns. But when considering equity instruments, take cognizance of one's time horizon of investment. The longer you can stay invested, the more equity allocation you can afford. Hence, if you are 27 years old and plan to retire at 60, you can invest the bulk of your portfolio in equity oriented schemes. This is true for planning children's education as well. If your child is 16 years old and you need the money in two years, you should completely avoid equity funds.

As you near your goal, you ought to start redeeming your equity investments and re-invest these in safer debt-oriented instruments. Hence when you are about 56-58 years old, you can institute a systematic withdrawal plan and re-invest the money in safer instruments. The category of balanced funds is especially useful for such life stage planning. These funds invest at least 65 per cent of the corpus in equity and the rest is in debt instruments. Hence when the equity segment of the fund does exceedingly well, the fund rebalances the portfolio, booking profits in equity and transferring to debt. Thereby your risk exposure is kept in check.

Creating Pension Fund

It is a wise decision to plan your retirement. most of the pension plans offered in India by various Life Insurance Companies are not very high yielding products and are relatively new. Nowadays, companies are offering the hot selling ULIP (unit linked investment plans) which have high cost associated with them. Plus it's always tough to decode a ULIP because of its complex structure and various associated charges. After the vesting age, the companies propose to buy an annuity for you for the fund value amount.

But, it is advisable to invest in good diversified mutual funds. You can make a well balanced portfolio with a mix of equity and debt by choosing from various five or four star rated funds, from the equity diversified, balanced, debt or MIP category. The debt funds and the MIPs would help balance your portfolio as they invest primarily in debt. This would help you reduce the down side risk. Instead of putting all your amounts in one go, it is better if you spread the investment over 12 months. Once you invest the amount, you can continue to remain invested for 7-8 years. After that, as your retirement age nears, you can start moving your equity investments completely to debt for securing your corpus. This way you can build a huge retirement corpus.

Once you build your corpus in ten years time and wish to start having a monthly income, you can put the whole amount in a Debt Fund. From this fund you can choose a fixed amount that you need every month and enroll for a SWP (Systematic Withdrawal Plan). Alternatively you can put the whole amount in a Fixed Deposit or some post office scheme to get a guaranteed return.

Creating Pension Fund

It is a wise decision to plan your retirement. most of the pension plans offered in India by various Life Insurance Companies are not very high yielding products and are relatively new. Nowadays, companies are offering the hot selling ULIP (unit linked investment plans) which have high cost associated with them. Plus it's always tough to decode a ULIP because of its complex structure and various associated charges. After the vesting age, the companies propose to buy an annuity for you for the fund value amount.

But, it is advisable to invest in good diversified mutual funds. You can make a well balanced portfolio with a mix of equity and debt by choosing from various five or four star rated funds, from the equity diversified, balanced, debt or MIP category. The debt funds and the MIPs would help balance your portfolio as they invest primarily in debt. This would help you reduce the down side risk. Instead of putting all your amounts in one go, it is better if you spread the investment over 12 months. Once you invest the amount, you can continue to remain invested for 7-8 years. After that, as your retirement age nears, you can start moving your equity investments completely to debt for securing your corpus. This way you can build a huge retirement corpus.

Once you build your corpus in ten years time and wish to start having a monthly income, you can put the whole amount in a Debt Fund. From this fund you can choose a fixed amount that you need every month and enroll for a SWP (Systematic Withdrawal Plan). Alternatively you can put the whole amount in a Fixed Deposit or some post office scheme to get a guaranteed return.

TAX Funds

The tax benefit under Section 80C (exemption from income tax for investments in ELSS and other instruments) for investments of Rs 1 lakh is applicable for only one financial year. It's applicable only for the year in which the investment is made. So if you invested Rs 20,000 in a tax planning fund in FY 2006-07, you cannot use this to avail a tax breather for FY 2007-08, even if you didn't use the benefit in 2006-07.

Zilch! You don't pay any tax on the capital gain at the end of the three-year lock in. However, if these tax provisions change in the future, you may be in for a surprise.

Why SIP

Here's our advice to everyone waiting for a correction. There may not be one. The laws of physics do not apply to stock markets; therefore what goes up need not come down. At least not in the near and immediate future.

Stick to a simple principle of investing regularly. If you have a lump sum amount, invest it in an ultra short-term debt fund and institute a Systematic Transfer Plan into an equity fund. Else stick to a plain vanilla SIP. Once done, all you need to do is monitor your fund for slackness in performance. If you are invested in a Value Research rated fund, look out for a re-rating of the fund. It's really as simple as that.

Fund not the fund manager

have the right strategy in place where saving for your child is concerned: starting early and saving periodically. The issue is where you should deploy your funds. The biggest hindrance against unit linked insurance plans (ULIPs) is the high commission costs associated with such packaged products. It is for this reason we suggest you separate your investment and insurance needs. Take a term policy and invest separately in mutual funds. The overall cost is much lower. Also, investing through mutual funds gives you greater flexibility in managing your portfolio. If the fund performance slackens, you have the the option of moving your money elsewhere without incurring any surrender charges or discontinuing your insurance cover.

As regards the process of selecting a fund, you need to look beyond the fund manager managing your money. Consider the objective, investment style and risk profile of the fund. You need to align a fund's objective with your overall portfolio's objective. For starters, you could look at growth oriented schemes in the large-cap category. Select two core holdings in which can infuse money periodically. For easier fund selection you can pick five- or four-star rated diversified equity funds.

FD verses Mutual Funds

Near double digit returns on FDs that have been available for sometime now are soon being phased out. Even a pure debt mutual fund will find it difficult to compete with such returns. So if your primary concern is capital protection with an assured return then stick to a FD. However the obvious problem with FDs is their illiquid nature. But today the processes at banks are such that breaking an FD doesn't take much time and effort. As to your search for a good mutual fund goes, there is an inherent flaw in your comparison between an FD and a mutual fund. For one thing, mutual funds do not guarantee safety of capital and neither do they offer assured returns. At best you can pick a mutual fund that invests in highly secure instruments such as government bonds, but even on these investments you can expect a negative return over a very short term of a month or so.


As far as costs are concerned there isn't any difference between approaching the mutual fund company directly and going through an agent.

ULIP is not as good an investment vehicle as a combination of pure term insurance + mutual fund investment. If you are still not convinced - then put 50% in ULIP and 50% in term + mutual fund and check it out yourself. It will take time to realise this - remember time is money. Mutual fund is more transparent and gives you much more liquidity than a ULIP. Just think it over - Why does an Insurance company give 25- 40% commission on the first year's premium to the agent? Pure term insurance is the cheapest and best. INSURANCE IS NOT INVESTMENT.
Investment in ULIP schemes can not be a prudent move considering the returns given by even the most conservative equity schemes. ULIP has some Unique Selling Points (USPs) to attract the retail investors. Insurance & investment bundled in one investment product as in ULIP is having a cart with two bullocks both are moving in a different direction.
Some conclusions are here for u.

1. ULIP is a long term contract between the person & the Ins. co. so remain there.
2. Charges are front loaded, hence one need time to recover money lost in initial charges thru market return.
3. there are 2 types of ULIPs in the market - TYPE-1, u get either Sum assured or Fund value whichever is higher at the time of claim. Type-2, u get both sum assured & fund value at the time of claim.
4. Almost all Ulips are started during last 3-4 years (with current bull run) so performance of these during bear phase is remain to be seen.
5. ULIPs are not as transparent as MFs.
6. Exit costs are very high if u want to.

If your reason of investment in ULIPs are same what I understand then invest only after considering all the Pros & Cons of it.

One more important point -
Due to differance of front & recurring charges Term+ ELSS combo is more beneficial during initial 10 to 15 years & after that ULIPs are ahead (if we assume the same returns from elss & ULIPs)

I hope u can better judge urself now, what is the best in ur interest?

entry load

it is not good for those agents those who advice mf and given the service to their clients. i dont know why sebi are so hurry regarding this issue.it just a matter if 2.25 entry load .if u see insurance compaines they charaged more then 35 % for the first year premium from the investor. mutual funds in india are statting phase and if sebi puts so many restructions on then like requirments now kyc norms. i think sebi encraze the investor to go directly to shere market not through mutual funds.

Pick of Mutual Funds

See, ultimately the basic idea of all investments is earn healthy returns without compramising on capital protection. Your idea of Sip is really laudable. My pick for you is as follows. Remember this is just a suggestion, actual recommendation can be made on knowing your financial status, security, requirements. But anyway, here goes Birla Sunlif Frontline Equity Fund DSPML World Gold Fund Fidelity Equity Fund HDFC Prudence Fund Lotus India Agile Fund Reliance Growth Fund SBI Magnum Commandites Fund Sundaram Rural India Fund Tata Infrastructure Fund UTI Dividend Yield Fund I have given 10 you can pick your choice., Best of luck

Dividend or Growth?

There is practically no difference between dividend reinvestment & growth options. The advantage under dividend reinvestment option is that you can switch to payout freely anytime later and enjoy tax free dividend when you need an extra income. This option is not there under growth option.

3i Infotech

3i Infotech has been able to differentiate themselves from an normal midcap software company through these acquisitions. All them have been EPS accretive with about 10-15% net margins. Its help them to build a good spread of banking products for itself. Another thing is that they are very strongly present in the domestic market. There is a lot of strong growth expected in this space and more specifically in e-governance space in which they have already won couple of orders from the Government of Gujarat and Government of Harayana, so going forward I expect this also to drive growth for them."

Lotus India Agile Fund

Lotus India Agile Fund

Lotus Mutual Fund's recent fund Lotus India Agile Fund is a unique fund which uses mathematical module to buy stocks. This is a Quant based Fund. their backtesting over past 11 years has shown that they have beaten Nifty by over 100% percent, and that too in this bullish market. And their negative performance over a period of 5 years is ZERO!.I for one, was really floored by their presentation. And I saw to it that almost all my clients invested in this fund. Just another 1 year, this fund will be definitely among the top 10 performers. I feel that this fund is a must have in every one's portfolio.Best of luck.

Lotus Agile Fund

Lotus Agile Fund

Well, everyone is entitled to his/her opinion. But I would like to my money to grow rather than see other people's money grow and only then invest. If as an advisor, you are not able to analyse and foresee growth in a fund/investment, than what is your knowledge for?. My analysis and experience says that Quant Funds have given good returns all over the world and I find no reason why Lotus Agile Fund will be an exception
Lotus India Agile Fund will be an outperformer. Just watch. As far Lotus Mutual Fund's performance, they have not been bad. Their Tax Plan has given more than 50% return over 1 year. and more than that the fund house itself is not more than 1 year old. Give them time to prove.

Where to Invest

Where to invest

Dont go by star ratings alone., for past is past. Always go for clearly defined investment ideas by fund managers. My advise would be that you invest 50% in Large Cap Funds which have great performance, backed by reputed fund houses and have good potential namely Birla Sunlife Frontline Equity Fund,Franklin Templeton Bluechip FundFidelity Equity FundHDFC Top 200 Fund Reliance Vision FundAnother 20% should ideally be invested in Sector funds , and here ideally it is better if you take the option of Dividend Payout and my selection of funds would be Reliance Diversified Power Sector FundDSPML Tiger FundJM Basic FundSundaram Rural India FundTata Infrastructure FundAnother 20% could be in Aggressive Funds which which are potentially high risk high reward.Here too take the option of Dividend Payout and my selection would beHDFC Capital builder fundICICI Power FundHSBC Dynamic FundFranklin FlexicapLotus India Agile Fundand finally 10% in mid cap and small cap fund and they should beReliance Growth FundSundaram Select Midcap FundBirla Mid cap FundBest of luck