Thursday, June 19, 2008

Investment Advise for a newcome to Mutual Funds

Hello Sir,

My name is Srikant and I am 29 years old. I am new to mutual funds
I can invest 5-10k every month in mutual funds. I am looking at next 10-15
years time frame for my investment to give me good returns.
I need your advise on 2 items.
1. What funds to invest, around 5-10 funds.
2. Which is the easiest way to invest in Mutual Funds. I mean paper
application based or online.
I have kotaksecurities trading/demat account but around 2.25% is
charged as entry load on most of Mutual funds.
Also it is difficult to approach different AMC and invest in their
Mutual funds online to save the entry load.
I heard that CAMS is one place where I can invest in multiple AMC's
without any entry load. I am not sure.
Suggest me some approach where in I can save on entry load and easier
way to invest in Mutual Funds.

Srikant sharma

Srikanth Shankar Matrubai replied : " Hi, Shrikanta Sharma,
At the outset, you have chosen the right investment avenue for your funds. And the best method ., SIP and the icing on the cake is, your time horizon, 10-15 years!.
First of all I will answer your 2nd question, I dont find much difference between online and offline investments. Most people are sentimental about their invesments and prefer to SEE their investment and therefore go for offline invesments and prefer Account Statement in paper form.
You can go to Cams and save Entry Load. But I would prefer to invest through a Mutual Fund ADvisor purely for the sake of Professional Advise he gives., and also save a lot of time (visiting cams, etc) and most importantly he would do all the follow up work rather me leaving my work and doing the same.
For all these efforts, 2.25% is a pittance. Especially when you compare the Commission you give to your Insurance Agent, above 25% in most cases and in some cases even 40% commission!!
Regarding the funds to invest, I would like you to invest in 10 different Funds with equal amount and regularly review your investments every 6 months or so. My choice of funds is based on your age and assuming that you have adequately insured yourself and do not need the money for at least 10 years.
1. Birla Sunlife Frontline Equity Fund.
2. DSPML World Gold Fund.
3. Fidelity Equity Fund.
4. HDFC Prudence Fund.
5. HDFC Top 200 Fund.
6. Lotus India Agile Fund.
7. Reliance Growth Fund.
8. Reliance Vision Fund.
9. Templeton India Equity Income Fund.
and the 10th fund is a surprise,
it is the new fund in the market MIRAE ASSET GLOBAL COMMODITY STOCK FUND.
The reason for the NFO is Mirae people are very good in managing returns in volatile markets as established by their funds performance in South Korea.
I could go on, but time does not permit me.
You can get more information on my blog www.
Best of luck."

No comments: