Friday, September 5, 2008

Investing for Child

It is always desirable to start investing for your child's carrer, security as early as possible. And what better investment avenue is there, other than Mutual funds?

Mutual Funds give better returns, provide greater transcerpancy, flexiblity, tax benefits, etc.

When you are investing for your child, obviously it is safe to assume that the investment is for Long Term.

In that case, I do not find logic in going for Balanced Funds like SBI Balanced Fund or HDFC Prudence Fund. These Funds are very good but they should form only a part of your portfolio and not occupy the entire folio itself.

When investing for long term, always preferably go Diversified Equity Funds. These tend to generate a higher returns than any other Asset Class and there is enough evidence to prove this.

In such a case, I would like you to look at some Large Cap Funds, like
Birla Sunlife Frontline Equity Fund
DSPML Top 100 Fund
HDFC Top 200 Fund
HSBC Equity Fund

You can also consider investing in DWS Tax Saving Fund. This not only saves taxes for you, but also give you Free Life Insurance as a bonus. And the Funds performance is also very good. Upto 5 times of your investment amount is given as Insurance.

Among Child Specific Funds, HDFC Children's Gift Plan (Investment Plan) should also suit you.
And also ICICI Child Care Plan should also be thought of.
Both HDFC and ICICI offer Free Personal Accidental Insurance as an additonal benefit. ICICI also Free Scholarships for Deserving Students.

Take your time. It is the matter of investing for your child.

Always consult your Financial Advisor before investing.
BEst of luck.

No comments: