Friday, September 5, 2008

56yrs NRI investment in Mutual Funds

A boarder wrote :
i am 56yrs old NRI and new to MF.i have invested 1 lakh each in Reliance growth,Sund,select focus and Tata bal.i am plannining to invest 8 lakh every year in MFs over a period of another 5 yrs,Please advice mr to construct my portfolio


Dear Moin,
First of all, welcome to the Mutual Fund world.
considering your age and being a newcomer, you have to be complimented for selecting Good Funds, as your initial investment. But, the fact that you have invested in one go is not at all laudable. You should have staggered your investment through the SIP or STP method.

Considering your age profile, you should have at least 50% of your investment in Fixed Instruments/Debt Funds to avoid volatility and ensuring steady revenue. You can also include some Arbitrage Funds, as they too provide stabilised returns.

Among Debt Funds, you can consider
HDFC Monthly Income Plan (with 30% equity exposure)
DSPML Savings Plus Aggresive
Birla Sunlife Income Plus among others.

Among Equity Funds, you should preferably invest in Large Caps, and some Diversified Equity Funds and strictly avoid Sector/Themetic Funds. Also use the SIP/STP method of investment to take advantage of volatility in NAV.

Among others, you can consider the following for your equity portion of investments.
Birla Sunlife Frontline Equity
DSPML Top 100 Fund
Fidelity Equity Fund
HDFC Prudence Fund
HDFC Top 200 fund
Kotak K30
Reliance Vision Fund

Best of luck,

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