Saturday, July 26, 2008

Investment option for 2-3 years

One Boarder Mr.Milind Parmar wrote :
""Hello Experts,
I am a new investor and need your help for making a good portfolio.
I have below funds in my basket so far.
1)UTI Infra. (G)
2)UTI Lifestyle
3)UTI Eqt. Tax saving (D)
I want to invest 50K in near future and need your help in it. My age is 24 and I am looking for long term investment(2-3 years).Also I have read much about SIP and want to try it but not sure how to distribute investment among funds.
Appreciate your help!""

Srikanth Shankar Matrubai replied ::

"Dear Milind,
I feel like laughing. 2-3 years is long term?!!!!. That's what the Bull Market has made Indian Investors.
Sorry, for me, Milind, 2-3 years is not long term. Even 5 years is strictly not Long term. But may be given consideration as Long Term.
For your horizon of 2-3 years, it will be difficult to suggest anything out of hat, maybe Large Cap Funds like HDFC Top 200 Fund, Birla Sunlife Frontline Equity Fund will do.

But if you are ready to hold for 5 years or more than
DWS Investment Opportunities Fund
Reliance Growth Fund
Sundaram Select Focus Fund
DSPL Equity Fund
would make good choice.
Considering your age, I would say, 5 years should not be any problem for you, even a 10 year horizon would be a wise thing to do.

I recommend you visit my blog goodfundadvisor dot blogspot dot com for better understanding of the mutual funds investments.
Regarding your existing investments, sadly, all your investments in one Fund House, UTI. UTI Mutual Fund is among the Top Fund Houses in the country, but sadly, expect for UTI Infra, their funds are struggling to perform in Bear Market.
UTI Infra can be held, if you are bear the volatility associated with the sector and stay on for atleast 3 years.
UTI Lifestyle is a Close-ended Fund. Its Launch was held with great fanfare tomtoming the fact that Anoop Bhaskar would be managing the Fund. But, in line with the market conditions, the Fund's performance too has been insipid. Hold the fund till it becomes open ended and then take a call.

UTI Equity Tax Saving has given a 'ok' kind of return and could be held on to.

However, avoid fresh investments in any of the above funds, and looking at future scenario of the Markets, it would be prudent and advisable if you would switch from UTI Infra and UTI Equity Tax Saving (if lock-in is over), to a Large Cap Fund from UTI like UTI Leadership Fund or better still switch to UTI INDEX SELECT EQUITY FUND which has a better track record and hold better promise.

best of luck,

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