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Dear Mr. Srikanth Matrubai
I am an avid fan and follower of the MF investment advices posted by You, Ranjan, Pcspune and others on the money control message board. I kindly request you to review my portfolio and give your valuable advice for portfolio enhancements.
Thanks in advance for taking time to review my portfolio.
I am a NRI and investing via SIP an approx 45k per month in various MFs. Following are my current SIP status:
1. JM Financia (Div): 2 SIPs per month @ 1000/-
2. Fidelity Equity (Gr): 3 SIPs per month @ 1000/-
3. Birla Frontline Equity (Gr): 4 SIPs per month @ 1000/-
4. Sundaram Capex (Div): 3 SIPs per month @ 1000/-
5. Pru ICICI Infra (Div): 2 SIPs per month @ 2000/-
6. Reliance Banking (Div): 2 SIPs per month @ 1000/-
7. FT Prima Plus (Gr): 4 SIPs per month @ 1000/-
8. HDFC Growth (Gr): 4 SIPs per month @ 1000/-
9. Magnum Contra (Gr): 3 SIPs per month @ 1000/-
10. JM Basic (Div): 1 SIPs per month @ 2000/-
11. Tata Infra (Div): 1 SIPs per month @ 1000/-
12. Reliance Div Power (Div): 1 SIPs per month @ 1000/-
13. DSP ML Tiger (Div): 4 SIPs per month @ 2000/-
All above SIPs are done via Direct broker mode i.e. directly through fund houses or through their Investor Service Centres and hence I incur no entry load. Also except DSP ML, Sundaram and JM MF Fundhouse, in all other I opted for online transactions access via HPIN for ease of redeemptions in future and easier tracking of portfolio. I also spread out my SIP dates across all possible dates in a month to gain rupee cost averaging.
I am aged 35, have dependent parents in India and planning to get married this year. Since you are from Bangalore, just to let you know, I worked in Bangalore for 2 years from 2003-5. I still can't forget the fantastic taste of the food in udipi restaurents the likes of Shathisagar and other eateries.
Plz give your valuable suggestions about the rework/modifications needed in my above portfolio. I am risk taking long term investor looking for wealth creation by sustain investments over a period of time. I am generally patient with my investment and quite lazy to sell or comeout of ant investments, only expert advice trigger me into action. 10-15% downswing don't throw me in anxity - I can be patient with my MF investments. I am quite aware about the technicalities in MF investments.
Lastly I want to add SIPs in DWS Investment Opportunity (Div) and Reliance RSF equity (Gr) (as suggested by you and Pcspune) in my portfolio. Plz suggest which current SIPs I should replace from my above portfolio to include them, as I do not want to increase the number SIPs in my portfolio. Also plz suggest the monthly amount and frequency of SIPs for the DWS Investment Opportunity (Div) and Reliance RSF equity (Gr).
Apart from the above portfolios, I also do the following as investment diversification:
1. Investment in FD (I do in HDFC Bank via online using short term and long term route, whenever I have extra cash I put them into FD for 7 to 30 days (Short Term) and If I have cash for longer duration I put them in FD for 1 year 16 days at 8.75% (Long Term)).
2. Every year I invest 20000/- in PPF.
3. Term Plan from ICICI for 10L 20 Years.
4. Medical covers provided for my company. Thinking of taking medical covers for my aged parents. Can you plz suggest which medical insurance cover will be good for aged parents (dad at 70 and mom at 61) interms of service and premiums?
5. LIC Jeevan Anand policy for SA 2 Lakh - yearly premium approx 12000/-.
6. Tata AIG Nirvana Plus Pension Plan - yearly premium approx 11000/-.
6. Bajaj Allianz Personal Guard accident and disability plan - yearly premium approx 2200/-
I have some more investment in MF worth 8-9 lakh NOT via SIP route. Those are accrued over time or one time purchases - honestly those are not doing that good due to current market turmoil since Jan 15th 2008, though before 15th Jan 2008 those are appreciating haeavily - I have not sold them as I am a long term investor - but now realized the hard way that profit booking is equally important even in MF when going is too good, as such too good time never persists and any amount of long term or long wait can not guarantee the windfall prevalining before 15th Jan 2008. Though I am equally lucky that I have sold a part of my MF holding in Nov - Dec 2007 in good positive gains - may be the smartest thing I have done with my MF investments. I will write about them in my next mail as I do not want to bog you down with a long mail.
Lastly, again a sincere thanks in advance for your time and valuable advice.
Regards
Rahul
M: +65 9756 8356
The water in a vessel is sparkling; the water in the sea is dark. The small truth has words which are clear; the great truth has great silence.
- Rabindranath Tagore""
I had to whack to brain to answer this one, because he seemed to know everything still wanted my opinion. My honest answer went like this ::::
"""Dear Rahul,
At the outset, thanks for placing confidence in me and putting me on the same platform as Ranjan, which I don't feel I am worthy of that position.
After going through your longish mail, I am convinced that you have got sufficient knowledge about Mutual Funds and don't really require any Expert Advise. But since you have asked, I will try my level best to analyse your portfolio and see if any change is required, if at all.
Since you have mentioned that you have a penchant for risk and willing to ride short term volatility, it makes my job easier. I will not go through your PPF, Insurance investments because I admit I am not an expert in these matters. I am good in Mutual Funds and I will deal with these only.
1. JM Financia (Div): 2 SIPs per month @ 1000/-
2. Fidelity Equity (Gr): 3 SIPs per month @ 1000/-
3. Birla Frontline Equity (Gr): 4 SIPs per month @ 1000/-
4. Sundaram Capex (Div): 3 SIPs per month @ 1000/-
5. Pru ICICI Infra (Div): 2 SIPs per month @ 2000/-
6. Reliance Banking (Div): 2 SIPs per month @ 1000/-
7. FT Prima Plus (Gr): 4 SIPs per month @ 1000/-
8. HDFC Growth (Gr): 4 SIPs per month @ 1000/-
9. Magnum Contra (Gr): 3 SIPs per month @ 1000/-
10. JM Basic (Div): 1 SIPs per month @ 2000/-
11. Tata Infra (Div): 1 SIPs per month @ 1000/-
12. Reliance Div Power (Div): 1 SIPs per month @ 1000/-
13. DSP ML Tiger (Div): 4 SIPs per month @ 2000/-
Out of the above investments, it is quite clear your portfolio is quite diversified and slightly titled towards sector funds, which is obvious due to your risk taking capability. Your portfolio needs very little changes only due to the fact your portfolio is too much focussed on Infrastructure Funds. I tend to prefer Diversified Funds because the Fund Manager in the Diversified Fund will also definitely include sector stocks if he feels these will give good returns.
1. Even though Banking and Financial Sectors look as good long term story, having two funds in a portfolio is not recommended. You could consider stopping one of the two fund in JM Financial and Reliance Banking fund, preferably in Jm Financial Fund.
2. Fidelity Equity Fund is a "go anywhere fund" which is my long time favourite and recommend you to continue your sip and stay invested.
3. Birla Sunlife Frontline Equity Fund has been a good performer and is again recommended to continue investing in the same.
4. Sundaram Capex has been a excellent performer and yet again this fund can be continued.
5. Pru ICICI Infrastructure Fund has had a great last year. Though it may not give as good returns it gave in the past, you can continue to be invested in the same.
6. Reliance Banking Fund, has been volatile due to its high sector concentration and you should continue in the fund only if you are stopping the JM Financial Fund.
7. FT Prima Plus fund has a good track record. But in the recent past, almost all Franklin Templeton Funds have been struggling to even match the benchmark returns. Of course, you do not have any Opportunity Fund in your portfolio, but I feel you are better off by switching to Templeton Equity Income Fund, which invests in High Dividend Yield Stocks Worldwide. this will not only give your portfolio Geographical Diversification but also give some kind of a protection in a declining market.
8. HDFC Growth Fund has been a sort of Decent Performer who does not want to be in limelight. It tends to be in the top quartile in terms of performance but never seems to be a Blow-Out Performer nor a Dud Performer. Worth continuing., Be invested.
9. SBI Magnum Contra has a 5 Star Rating by most Research Houses. But, I personally, have my own doubts. You can see my messages about the fund in the moneycontrol mutual fund message board and you will know that I would rather have my clients invest in JM Contra fund, if they want to have a Contra fund or SBI Magnum Comma fund if they want to continue investing in SBI Fund House. Same goes for you.
10. JM Basic has had a phenomenal turnaround in its fortunes since Sandeep sabharwal joined the Fund House. Its ranking has risen from a lowly 165 to even 1 at one point of time. Even though it has slipped recently, it is more due to market correction rather than any change in the portfolio of the Fund. Continue to invest in the same.
11. Tata Infrastructure Fund has been a Star Performer since its launch. But it too is slipping recently. Since you have already have ICICI Infrastructure and DSPML Tiger Fund, I would recommend you to switch to Tata Growing Economies Infrastructure Fund which invests upto 35% in stocks outside India or if you have no attachment to the fund and would rather have High Returns, Stop the SIP in the fund, continue holding the old investments and redeem the same at the opportunate moment and start a fresh SIP in Reliance natural Resources Fund which still holds upto 65% of its corpus in Cash and gives a different flavour to your portfolio.
12. Reliance Diversified Power Sector Fund may have given above average returns in the past, but the future may not be as rosy. Power Sector will have Execution Problems, Raw Materials Problems to deal with in coming months. Already you are invested in ICICI Infrastructure, DSPML Tiger Fund., both these funds do hold many Power Stocks in their portfolio and you are only duplicating your folio rather than diversifing them. You can stop the sip in this Fund.
13. DSPML Tiger Fund has been a consisten performance and deserves to be in your portfolio.
Finally, your portfolio lacks a Good Opportunity Fund which can add zing to your returns. Among these, I would like you to look at DWS Opportunity Fund, Kotak Opportunities Fund, Lotus India Agile Fund, Mirae India Opportunities Fund.
You could also add some Balanced Funds in your portfolio just to give some protection during volatile times., so that you will not be needing to redeem your equity funds in an emergency.
Best of luck.
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