Wednesday, April 9, 2008

Mutual Fund Advise

One investor wrote :
i\\`ve just inherited some money about 4 Lacs, was wondering what\\`s the best way to invest this. Looking at a time frame of 5-7 years. I\\`m 32 and willing to take risks. Especially looking at Mutual Funds. Any advice is appreciated."

My reply was
Dear Mr.Paraveen,
At the outset congratulations for inheriting 4 lakhs. Your decision to invest in Stock Markets through Mutual Funds is an apt one and appreciable.
It would be prudent to invest through SIPs for high returns and avoiding short term losses due to market volatility. You could invest your 4 lakhs in 4 funds firstly through Arbitage Fund and then give Systematic Transfer Plan., This way not only your money will be earning you higher than SB returns but also you will also participate in SIP without any hassle.
Here I have given 5 funds, you can choose 4 fund of your choice.
1. Birla Sunlife Equity Fund
2. DSPML Top 100 Fund
3. HDFC Prudence Fund
4. SBI Magnum Comma Fund
5. Reliance Growth Fund
If you are not comfortable with SBI Comma Fund you can consider Sundaram Select Focus Fund.
My personal view is SBI Comma Fund should be an outperformer in coming days due to its high exposure in Commodities Stocks.
Avoid Theme Funds, NFOs as far as possible. You can also consider investing a small sum (say5%) in DSP ML World Gold Fund.

Best of luck.

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