Saturday, July 19, 2008

Want to Invest 10000 in sip


I want to invest Rs 10000 per month through SIP in the following 5 mutual funds (Rs 2000 in each fund) for 5 years.
1. Sundaram select focus
2. Kotak 30
3. HSBC Equity
4. Birla Sunlife frontline equity
5. Magnum Contra

Please advise.

Thank you

Srikanth's reply ::
You should consider spliting your investment of 2000 into 500 or 1000 and invest in different dates to take advantage of volatility in the fund value.
Your fund selection seems good at face value. But it could be improved upon. I will analysis each one and this is what I feel

1. Sundaram Select Focus : INVEST. Good Fund with a good track record.

2. Kotak 30 : RECONSIDER. Although has been a consistent performer, as your choice of funds lacks a Opportunity Fund, you can consider investing in Kotak Opportunities Fund or DWS Investment Opportunities fund rather than Kotak 30.

3. HSBC Equity : INVEST. Again a good performer over a long period of time.

4. Birla Sunlife Frontline Equity : INVEST. A all time favourite of mine. Definitely a must in every portfolio.

5. Magnum Contra : RECONSIDER. Although Most Mutual Fund experts would blindly, without battling an eyelid would recommend an investment in this fund, I beg to differ and would suggest you rather consider HDFC top 200 or HDFC Prudence. Or if you are thinking of a Contra, you can as well consider JM Contra.
Magnum Contra may have given a great performance in the past. But I doubt whether will it have the same success in the future. For one, the change of Fund Manager. Second, the stocks in the portfolio of the fund suggest that rather than a Contra Fund, it is more of a Diversified Fund, where there is already a exposure taken by you in form of HSBC Equity and other Funds.

You can also consider investing, though in small quantities, in the following funds;
DSPML World Gold Fund
Templeton India Equity Income Fund
Sundaram Rural India Fund.

It would have more helpful in suggesting you funds, if you had given details of your age, investment horizon, etc.
Best of luck.


Srikanth Shankar Matrubai

No comments: