Monday, February 23, 2009

Portfolio advise needed

Mr.Raghu wrote ;
Hi


I would like to thank you for providing wonderful guidence for us. Your goodfundadvisor.blogspot.com has helped me to choose the best funds.


i am 32 yr old and my investment plan is 5-10 yrs.

my portfulio is 1000 rs SIP in the following funds.


DSP Top 100 Equity
DSP Balanced
Reliance RSF Equity
Sundaram Select Focus
Fidelity Equity
Templeton Equity Income


iam also putting money requied for short time in DWS money plus dividend fund on time to time.


i can put another 3000 rs as sip in equity. in which of these funds i should increase sip or should i add any other fund missing from my portfolio


SRIKANTH SHANKAR MATRUBAI replied :

Dear Raghu,
First of all, thank you for your nice words.
You have a good mix of funds in your portfolio. Your portfolio need very little tinkering. You can reconsider your sip in Reliance Regular Savings Fund-Equity Fund because of its slight overexposure to mid-caps and small caps. It sure had a terrific run in the past one year or so, but I would be more comfortable with Reliance Growth Or a Reliance Vision fund rather this fund.
You can also consider adding DSPML/Reliance Natural Resources fund to your portfolio. Going forward, most fund managers are of a view that natural resources should be a outperformer.
Best of luck,
Srikanth Shankar Matrubai

Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

loss in existing sips, what to do?

Rajeev Bora wrote :

Substantial Loss in existing SIPs (over last one year) –portfolio
as in following funds– may please advise for future course of action.

Birla Sun Life Frontline Equity-D
DSPML T.I.G.E.R. Reg-D
HDFC Top 200-D
Kotak Opportunities-D
Magnum Contra-D
Magnum Multiplier Plus-G
Reliance Diversified Power Sector Retail-G
Reliance Diversified Power Sector Retail-G
Reliance Growth-D
Reliance Natural Resources Retail-G
Reliance NRI Equity-G
Reliance Regular Savings Equity
Sundaram BNP Paribas Select Focus Reg-D

Tata Indo Global Infrastructure-D
Tata Infrastructure-D
Tata Infrastructure-G

Please advise....
Rajeev Bora



SRIKANTH SHANKAR MATRUBAI replied :
Dear rajeev,
My sympathies lie with you. This Market Meltdown has not spared anyone and you are no exception. Most of your investments are into good funds and need very little tinkering.
While I would advise you to completely switch from Reliance Diversified Power Sector Fund into Reliance Vision Fund, even at a loss, as Reliance Vision has better prospects than Reliance Diversified Power Fund.
You also have two other Infrastructure Fund in Tata Infrastructure Fund and Tata Indo Global Infrastructure Fund. You need to again switch over here from Tata Infrastructure fund to Tata Pure Equity fund, which has a very Good Track Record.
However, all your other funds are very good and do continue your sip in these, you are sure to not only get back your investment but also make decent profits in about 3 years time.
If possible, add Franklin Templeton PE Ration Fund of Funds, which is my latest recommendation to ALL clients. This Fund automatically increases/decreases exposure to Equity/Debt depending on PE Ratio of the Sensex and would compliment your portfolio.
Best of luck,
Srikanth Shankar Matrubai

Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

FDs or Mutual funds?

Purvesh asked :
Hi is investing in FDs or mutual funds a better idea in current market conditions a goof idea, if MF then which funds are safe to invest

SRIKANTH SHANKAR MATRUBAI replied :
Hi, purvesh,
If your outlook is short term of say below 6 months, then FDs are the best option for you, anything above 6 months, definetely you should consider Stock Markets seriously.
The ongoing volatility clearly shows that the stock selection, entry exit points are best left to experts, and who better than Mutual Fund Managers to manage our money. If you look at the recent history, almost all Funds are sitting on cash of above 30%, and in some cases, even 40%, which clearly shows that they had a feeling of this meltdown.
Of course, the meltdown was so savage that even the most intelligent Fund Manager would have been stumped.
But, still, my vote is go for Mutual funds through SIPs. Invest in good Diversified funds with Good track record. some of them you can consider for investing are
Birla sunlife Equity fund
DSP Equity fund
DWS Alpha Equity Fund
Fidelity Equity Fund
HDFC Prudence Fund
HDFC top 200 Fund
Kotak K 30 fund
Reliance Growth Fund
Sundaram Select Focus fund

Best of luck,
Srikanth Shankar Matrubai

Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

Lesson learnt by me in this Market Crash

The five year Big Bull run made everyone that there will always be sunshine. We tended to ignore warning signs and just brushed them aside as an aberration. I was no exception. Have I lost money?. Yes and no. Yes, because I am stuck with an asset which at a given point of time would fetch a lower valuation. NO, because, the loss is only notional.
I have seen two Bear Runs. First, post the Harshad Mehta Scam in 1992-93, next the Technology Meltdown in 2001. I learnt two Different Lessons in these Bear Runs.
In the first Meltdown, I learnt that "Never Invest All your Money at one go, it may the peak you are investing". In that Meltdown, where I burnt my finger as speculator, I qualified to become myself as an Investor. Lesson Learnt : Invest regularly at periodic intervals.
In the second Meltdown, I learnt that "Never Overexposure yourself to One Particular Sector". Lesson Learnt : Do not put all your eggs in 1 Basket. And the Biggest lesson which I learnt from this Bear phase is that I sold Good Stocks to protect my Huge losses in my Bad Stocks. So, ultimately, I was left with Dud Stocks and devoid of Blue Chips. And it took nearly 3 years to get my portfolio on the right track.
And in this present Meltdown, I have learnt not one but Two Big lesson, First, Book Profits Periodically.
Second, Spread Your Investment across Asset Classes including Debt.
I have taken these losses as tuition fees that I have paid to learn from the Markets.
The Biggest Reason why investors lost heavily in this market was due to the prolonged Bull run of 5 years, which made people invest without doing any research due to stocks going up almost every other day.
For me, the market is like an ocean. Anything you throw into the ocean always come back. Whatever you throw into the market will ultimately come back, provided you follow the market discipline.

I may sound naive, but I don't think I've lost anything. That is I have lost money on paper, which I had bought long long time age, and I am sure they will be back up sooner rather than later. The stock market going down doesn't mean the end of the world. The compaines I hold still continue to rake in profits.

But, yes, my faith to be completely invested in equities has been ripped to shreds, as the even the bluest of blue chips have got hammered. So, while I have not changed my current holdings, I will be looking to change my future asset allocation with a provision for debts and a bit of cash reserves to go with.
But, thankfully, I am not even 40 yet, so retirement is still a long way. I am sleeping peacefully, for I know I do not need this money for another 15 years at least.

My advice would also be on the same lines. It is always wise to have a properly diversified investment strategy based on your risk tolerance and as you age, you should become more conservative and shed your aggressiveness and shift towards debt and Large Cap Mutual funds.
I also plan to diversify further by investing in some International Funds.
I also plan to invest through SIPs to take advantage of NAV volatility (and indirectly time the market!) and restrain myself from making Lumpsum Investment.
I also plan to diversify further by investing in Other Asset Classes too like Gold, Silver and commodity funds by committing a small percentage.
I have decided not to borrow funds for investing. (this lesson I learnt in 1992-93 bear run).
I have decided to avoid ULIPs.
I intend to invest only for Long Term.
Best of luck,
Srikanth Shankar matrubai


Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

Good Funds in these Crisis Times....

One blogger Mr.Kumar, queried :
"
Sir,


Your blog has really helped me gain a fair amount of knowledge about mutual funds.


In this time of crisis, please let me know which MFs are good to buy. After buying them, I can wait for a minimum of 3 years. I am new to MFs, about 7-8 months ago bought SBI's Tax gain and Tax advantage, each 25k worth, one time investment, both not doing well, and recently about 2 months ago bought 5k worth of Reliance Natural Resources growth fund units. I can invest/save about 10k per month. Please advise me as to which funds I can invest in at the moment. Thank you.
G S Kumar


SRIKANTH SHANKAR MATRUBAI advised :

Dear G,
Your present investments are not doing well in line with the market. So, there is no point in worrying about them. You seem to have invested during the peak of the markets and hence the decline. Out of your 3 existing funds, two, namely, SBI Tax Gain and Reliance Natural Resources Fund are good and can be held on. However, SBI Tax Advantage is not a good investment, moreover, it is a 10 year Close ended Fund. You have very little option, expect to hold on this fund also.
While 3 years is a good enough time for a fund to deliver above average market returns, it would be wise if you spread your investment into 5 fund with 2000 each. Go for different dates.
My pick of funds for you are :
1. Birla sunlife equity Fund
2. DSP Top 100 Fund
3. Fidelity Equity fund
4. HDFC Prudence Fund
5. Sundaram Select Focus fund
You can split your sips into 1000 each (500 in Fidelity and Sundaram) and invest on different dates to take maximum advantage of NAV Volatility and earn that extra. \
Best of luck,
Srikanth Shankar Matrubai

Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

Want to have 2 crores in 10 years

Blogger Prathibha Mahesh asked :
Please review my portfolio and advice on my next financial move.

Age 30

Looking for a retirement kitty of 2 Crores by 40.

Current Investments:

SIP 25 K per month ( Current Value : 5.75 Lakh )

Fidelity Equity Fund - Gr 2500
HDFC Equity Fund - Gr. 10000
HDFC Prudence - Gr. 10000
Reliance Vision Fund Gr 2500

ICICI Life Time ( 30k Per Year Started in 2003 ) Current Value 1.9 Lakh

PF 2.9 Lakh
PPF 1.04 Lakh
401 K : 1.07 Lakh ( will be investing here for next 2 years to get company match as I am in US right now )
NSC : 10 thousand
Flat in Bangalore bought in 2004 for 15 Lakh. Current Price is around 35 Lakh. Loan Amount left 5.9 Lakh 13.5% interest

Fixed Deposit : 8 Lakh
Emergency Fund : 2.3 Lakh
Stocks : 30K

I want to invest another 10 K per month through SIP. Pls suggest some funds.

Thank you,
Pratibha Mahesh



SRIKANTH SHANKAR MATRUBAI advised :
Dear Pratibha Mahesh,
You seem to be on the right track to accumulate 2 crores in about 10 years time. Your present sip investments are all very good, a tad conservative I feel. However, because of this, you have been saved the pain of the BIG downturn other funds had to face. Going forward, you should consider switching your 10000 sip of HDFC Equity into two sips of 5000 each in
Sundaram Select Focus Fund
Birla Sunlife Equity Fund.
Since your goal is 10 years, you do have sufficient time on your hand to allow your fund to grow. Your 25k sip should at a conservative estimated return of 15% easily give you 65lakhs.
You intend to invest another 10k per month, so your investment of 35k per month should give 92 lakhs in 10 years time at a conservative return assumption of 15%. So, you are on the right track.
You also need to rejig your existing 25000 sip. So, ultimately your 35000 sip should go to the following funds, in the manner explained:
Birla Sunlife Equity fund -- 5000
DSPML Top 100 Fund -- 5000
HDFC Prudence Fund -- 7500
HDFC Top 200 Fund -- 5000
Reliance Growth Fund -- 5000
Reliance Natural Resources Fund -- 2500
Sundaram Select Focus -- 5000

These funds should over a period of 10 years give you Good Returns and help you in accumulate your retirement kitty of 2 crores very easily.
Best of luck,
Srikanth Shankar Matrubai

Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

Advise on my portfolio

Hello sir

I have gone thrugh your while searchin for SIP ivestment.It provided me with some useful insights regarding SIP.I am a 21 year old working software professional, i would like to invest 3000 in SIP that would be a part of MBA expenses.So i'm investing 1500 which would give me tax benefits and d other 1500 in equity growth fund the following is my portfolio.

1000- Sundaram paribas BNP tax saver
500- principal tax saver
1000- reliance growth ( targetted at small and midcap )
500- Sundaram Select Focus ( targetted at Large cap )

Plz advice on my portfolio.should i go for reliance growth or hdfc growth or reliance rsf growth.
Thanking you

swamy

SRIKANTH SHANKAR MATRUBAI advised :
Dear Vemula Swamy,
Congratualtions Vemula Swamy, your portfolio is one of those rare ones which is perfect and needs little or no changes. Say thanks to your advisor. Your portfolio is a perfect blend of Large Cap and Diversified Equity. Continue with the same.
Regarding your second query, between reliance growth or hdfc growth or reliance rsf growth, I prefer HDFC Growth as you already have Reliance Growth. However, I would prefer you add Fidelity Equity Growth rather than the above mentioned 3 funds.
Best of luck,
Srikanth Shankar Matrubai.

Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

Is my SIP investments in the right funds?

One blogger Mr.Nishan Asher queried "

Hello,



I have an SIP plan in the following companies, please let me know if should continue stay invested with the same amount or should I stop or reduce the amount I invest monthly.



I am right now investing a Rs 5000 per month in each SIP



Birla Sunlife Mutual Fund – BSL Midcap Fund – Growth (B251G)


DSP Merill Lynch Mutual Fund – DSP India T.I.G.E.R Fund Grow-Reg (D13)



SBI Mutual Fund – Magnum Global Fund – G (L021G)


Sundaram CAPEX – Growth (S82)



Regards,


Nishan


SRIKANTH SHANKAR MATRUBAI replied :

Dear Nishan Asher,
Sadly, your portfolio lacks Good Solid Large Cap Funds. Stop your sips in all the existing funds IMMEDIATELY!!!!!.
Birla Midcap Fund, as the name suggests, is a Mid Cap Fund, which had a good run in the bullish times but now as with the case of all Mid Cap Funds, had a horrendously poor run. Mid cap funds do not look attractive even with a 3 years perspective. Stop your sip and for your existing investment, think about switching to Birla Sunlife Equity Fund.
DSP Tiger Fund and Sundaram Capex fund are both Thematic Funds. Both funds are heavily invested in Infrastructure stocks. With the economy taking a breather and Infrastructure Sector's future not looking rosy, you need to look elsewhere. Stop your sip in both the funds. Stay invested in both the funds for now.
SBI Magnum Global Fund is a Diversified Fund, but had a terrible past and a very poor track record. Stop your sip immediately and switch to SBI Bluechip Fund.
You can look at investing your 5000 * 4 sip into these funds, with different dates in each fund to take maximum advantage of NAV volatility.
1. Fidelity Equity Fund.
2. HDFC Prudence Fund
3. Reliance Growth Fund
4. Sundaram Select Focus Fund
All these funds have had a good track record both in bull and bear markets. Split your sip investment into different dates.
Review your investments every 6 months or so.
Best of luck,
Srikanth Shankar Matrubai.

Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

Buying Opportunities Galore!!!!

The current fall is an excellent opportunity for long-term investors to build up a portfolio of good, stable stocks/funds.
Cast your mind back to the market crash of 1992 or the dotcom bust of 2000. At that time, these seemed to be major crises for stock markets. But if we look at the historical chart of the Sensex versus time today, they appear to be minor blips in an otherwise upward trending graph.
It is a natural human tendency to attach disproportionate importance to current events which have had a major impact on them and ignore all other factors which they would otherwise take into account as rational investors.
The world is not coming to an end, but the way the stocks are getting hammered 70% down from the top, it gives you a feeling as if the world is going to end
But contrary to investor perception, this is the best time to (buy more and) average out,And SIPs are an ideal vehicle to do that. SIPs should be continued to benefit from the lower prices prevailing now. And, I am sure, it is a great time to buy. Somebody putting his money at this point of time, is sure to get amply rewarded over the next 24-30 months. During market lows, human psychology plays a strong role. Fear takes over greed and people undertake panic selling. SIPs help to keep emotions away from your investment decisions and are a great vehicle to build long-term wealth. So keep your cool and take a long term view.
Equities are long-term investments. A short term blip creates fluctuations in prices but sooner or later, fundamentals will kick in.With India expected to grow at an average of 7% over a 5-year period, Crude down by 43%, nobody is taking note of these bright spots, BUY before others do, otherwise you will regret for a lifetime.
THIS IS A ONCE IN A LIFETIME OPPORTUNITY. BUY AND SIT TIGHT FOR 3-5 YEARS, YOU WILL BE AMPLY REWARDED.
Best of luck,
Srikanth shankar Matrubai.

Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

Shall I redeem DSP even at Loss?

A senior Citizen Mr.Sen wrote:
i understand that because of amalgamation of dsp ml with a singapore company called hardrock, investors have been asked to redeem if they wish at current nav

i have an investment of rs 15000 in dsp top 100, 30,000 in tiger and 20,000 in opportunity eq. these are doing so badly even my principal has been heavily eroded.

i shall be very grateful if please advise.should i redeem even at a loss of 23,000 rs.or should i let it be for a few months. here let me mention i am a senior citizen

thanks a lot
sen


SRIKANTH SHANKAR MATRUBAI replied

Dear Sen,
Being a Senior Citizen, you should have to invest in Good Large Cap Funds and not Sector/Theme Funds and not even Opportunity Funds, as these funds take lot of time in giving you returns.
But, first of all, let me assure you that DSP ML is now DSP Black Rock, as Meriyll Lynch People had already their Asset Managemnt Company Worldwide long back. DSP had not yet changed the name of the company, which they have now done. Also, in India, all Mutual Funds are run by Trust where even a change in Company which forms the Trust to run the Mutual funds has NO say in the Day to Day Affairs of the AMC.
Coming to your investment, your investments seem to have been done in the Peak of the bull market and hence, seeing such a HUGE erosion. The Best option for you is to 'JUST STAY INVESTED' and hold on for now.
The funds are good except for DSP Tiger which is a Infrastructure Fund and does not look promising even on a three year horizon. You can switch the same to DSPML Equity fund and stay invested for some time till the markets stabilise and then take a call accordingly.
Best of luck,
Srikanth Shankar Matrubai.

Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

Student's investment query

Chet had a investment dilemma and queried :

hello sir,
myself chet and currently I have 25000/- rupees with me and i want to invest in SIP.

I am an engineering student and my age is 23. I also get a scholarship of 8000/- per month and will be continued up to may 2009 so the total amount will be upto 35000/- saving minusing the tuition fees and living expenses.


Currently i have got an RD of 1000Rs from post office.

Please sir suggest me which SIP i should go with and my plan is to invest 1000Rs per month or 1500/- and also suggest me the period of investment.


With Best Regards,
Chet

SRIKANTH SHANKAR MATRUBAI advised :
Dear Chet
Even though you have age on your side, so I would advise you to go for Diversified Equity Funds, simply because Sector/Theme Funds tend to be volatile and you being a student, you may require money at a very short notice.
I advise you to Stop your 1000 RD in Post Office immediately, as these tend to give very low returns even eroding your investment value when you consider Inflation too. Unless this amount is for an Emergency, you should stop this RD immediately and switch the investment into Mutual Funds.
I suggest you to consider investing 1500 in 4 Funds as follows:
500 * 1 in DWS Tax Saving Fund (500) (You can avail Added Bonus of Free Life Insurance of 5 times your Investment)
500 * 1 in Fidelity Equity Fund (500)
250 * 2 in Reliance Growth Fund (500)
250 * 2 in Sundaram Select Focus Fund (500)
These Funds are low on Risk and Above Average on Returns and Should Serve you all.
Best of luck,
Srikanth Shankar Matrubai.

Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

Add More ELSS??

Mr.Rohan Agarwal wrote back with a new query :
Dear Shrikanth,

Thanks for replying to my last query.

To pay 0 tax on my income , i need to claim deductions of 45,000 under section 80c.

To do that i am investing 30,000 in ELSS and 15,000 in PPF.



I have invested 2,000 in each of the following ELSS Schemes.



DWS Tax Saving G

Fidelity Tax Advantage G

HDFC Taxsaver-G

Sundaram BNP Paribas Taxsaver

Principal Personal Tax Saver Fund G



I will further invest 4000 more in each of these , total of 30000.

Do you thing this is a good balance of ELSS Funds and currect number of funds for investing 30,000.



Thanks in Advance.



Rohan Agarwal.


SRIKANTH SHANKAR MATRUBAI replied :
Dear Rohan Agarwal,
You have the right mix of ELSS funds and you can continue to not only stay invested in these but also add more of the same.
You can however consider adding DSPML Tax Saver Fund which is more into Large Caps and could add stability to your portfolio.
Your exposure to Mid Cap and Small Cap is more through ELSS funds and not via Diversified Equity Funds, which means an automatic lock-in of 3 years, which should reward you by the end of lock-in term. And also, age being on your side, you need not at worry on this front. Your open-ended funds investment are in 3 Very Very Good Funds, which you can encash anytime without too much of a bruising.
Carry on without a worry and full of confidence.
Best of luck,
Srikanth Shankar matrubai.


Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

STAR PERFORMERS OF THE WEEK

Star Performers
Fund Nature 1 Yr Return %

UTI SPREAD Fund Arbitrage Fund 9.6
ICICI Blended Plan A Balance 7.94
Birla Int Equity (A) Equity -28.44
Tata Tax Advantage Fund - 1 ELSS -42.07
UTI Index Select Equity Fund Index -42.57
Gold BeES ETF 28.08
LICMF Floating Rate STP Floating Rate 10.05
ICICI Gilt fund Inv Plan Gilt 28.82
Canara Robeco Income Income 28.85
Birla MIP II-Savings MIP 17.29



*For the week ended February 20, 2009
source : Faaida

Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

Tuesday, February 17, 2009

I need your advise

Mr.Sunder requested for advise :
Hello Mr Srikanth,



I am planning to invest Rs 10000/- per month in Mutual Funds and was researching the various options when I came across your blog. Your specific and clear advice in your blog is very helpful and easy to understand.





I am 39 years old and am at present saving about Rs 20000/- per month. I have some insurance policies for about Rs 8 lacs but not much of savings otherwise. I had a housing loan which I prepaid and closed in May this year. Now I need to build up some savings for the long term.I request your advice regarding the correct portfolio for me.



Thank You and Best Regards



sunder


SRIKANTH SHANKAR MATRUBAI replied
Dear Sunder,
It feels great to know that you have already closed your housing loan. And your insurance of 8 lakhs is also enough for now. Maybe you need to take a Term Insurance of about 12 lakhs which will cover you for about 20 lakhs which is quite a substantial amount. This may set you back by just about 500 per month.
That leaves about 19500 per month of savings of which you can channelise 9500 through Mutual Funds for maximum returns.
Since you are only 39 and also not having any BIG expenses in the near foreseeable future, you are ideally placed to earn Good Returns through investment in mutual funds through Sips. I have prepared a shortlist of funds for you investment. Do consider investing in them.
1. Birla Sunlife Equity Fund 1000 * 1 sips per month (1000)
2. DSPML World Gold Fund 1000 * 1 (1000)
3. DWS Tax Saving Fund 500 * 1 (500) (Here you will get the added Bonus of Free Life Insurance cover of 5 times your Investment)
4. Fidelity Equity Fund 500 * 1 (500)
5. Franklin Templeton India Equity Income Fund 1000 * 1 (1000)
6. HDFC Prudence Fund 1000 * 1 (1000)
7. HDFC Top 200 Fund 1000 * 1 (1000)
8. HSBC Equity Fund 1000 * 1 (1000)
9. JM Contra Fund 1000 * 1 (1000)
10. Reliance Growth Fund 250 * 2 (500)
11. Reliance Natural Resources Fund 250 * 2 (500)
12. Sundaram Select Focus Fund 250 * 2 (500)

These funds are carefully selected after a through analysis and should help you build up a Substianal Savings Kitty in about 10 years time.
Do review your investment every year.
Best of luck,
Srikanth Shankar Matrubai.


Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

Is Portfolio Balancing Necessary?

One reader of my blog Mr.Nester Dias wrote a brilliant letter and here it goes :
Hi ShareSher
I am 32 years old, newly married and would like to invest upto 40K per month on mutual funds ( SIP based ) . That is around 45% of my income post tax - I consider myself a safe investor and would like to make steady returns and not lose money . Basically I am a new entrant to Mutual Funds ( entering in phases since Feb 08 ) but am thinking that this present moment would be the rite time to a) learn more about mutual funds/stocks b) very importantly make money :) . I am looking at making money in the long run ( say 5 years + from now ) .
Been doing a lot of reading and have noticed that most of the fund do have the same stocks - this applies to contra funds also..So I am not very sure about how the financial experts evaluate funds . Anyway having said this can you lend me your expert opinion on my portfolio
Would appreciate your input and your reasoning why . Thanks
Reliance Diversified Power Sector - Dividend Plan 25000 One time
Principal PNB Long Term Equity Fund - Series 2 10000 One time
JM Contra Fund - Dividend Plan 10000 One time
DSP Merilly Lynch TIGER Fund - Dividend Regular 25000 One time
Kotak Global Emerging Market Fund 10000 One time
Birla Sun Life International Equity Fund- Plan B - Dividend 30000 One time
Tata Indo Global Infrastructure Fund - Dividend 30000 One time
Tata Pure Equity Fund - Dividend 2500 SIP for 1.5 years
Tata Equity Oppurtinity Fund - Dividend 2500 SIP for 1.5 years
DSP Merill Lynch Top 100 Equity Fund - Dividend 2500 SIP for 1.5 years
DSP Merill Lynch Tax Saver Fund - Dividend 2500 SIP for 1.5 years
Kotak Tax Saver - Dividend 2500 SIP for 1.5 years
DSP Merill Lynch Top 100 Equity Fund - Dividend 25000 One time
DSP Merill Lynch Top 100 Equity Fund - Dividend 2000 SIP for 1.5 years
HDFC Top 200 Fund - Dividend 2500 SIP for 1.5 years
DSP Merill Lynch TIGER Fund - Dividend 25000 One time
DSP Merill Lynch TIGER Fund 2500 SIP for 1.5 years
Sundaram BNP Opportunities CAPEX Opp Fund - Dividend 2500 SIP for 1.5 years
Kotak 30 - Dividend 25000 One time
Kotak 30 2500 SIP for 1.5 years
ICICI Prudential Infrastructure Fund (Dividend ) 30000 One time
ICICI Prudential Infrastructure Fund 2500 SIP for 1.5 years
Century SIP - BIRLA SUNLLIFE Frontline Equity Fund ( Growth ) 2500 SIP for 1.5 years
Reliance - Regular Saving Fund (Growth ) 2500 SIP for 1.5 years
Regards
Dear Nester Dias,
You have a good exposure of your savings to Equities. But considering, that you call yourself a 'Safe" investor, it surprises me that you have more than 40% of your lumpsum investment into Infrastructure Funds and 25% of your sip investments going into again Infrastructure Funds. You need to reduce your exposure to Infrastructure Funds and add more of Diversified Equity Funds to add Stability to your portfolio. While Infrastructure as a Sector looks highly promising, its short and medium term outlook does not look all that rosy because of the slowdown in the economy and the high interest rate scenario. If you are willing to hold for more than 5 years or so, you can continue to stay invested in these funds.

I agree with you that most of the funds do have same set of stocks. But the key differenciator as to why some funds become outperformers and some laggards, is because of the percentage of the stocks they own. Suppose Fund A owns more Reliance and Fund B owns more L&T. And, if say, Reliance spikes up due to some news, then Fund A gains more thant Fund B and thus becomes a better performing fund.
Also, it also depends on Cash component held by fund at each stage of market. Fund A holding more cash in a Bearish Market will definitely gain and will be able to outperform others due to its ability to keep picking stocks at every fall.
Also, some funds perform better because of their Enter/Exit Strategy. Example, ICICI Fusion Fund II has bought Subhiksha (unlisted) at a very low low price, and since the scrip is not listed, the Fund could not exit and would lose heavily.
These and some more factors are considered while evaluating funds and their future performance.
As far as your portfolio is considered, while you can continue to stay invested in most of your lumpsum investments for now, do take a call around April 2009 when the Full year's Annual Results are announced.
However, since you already have sufficient exposure in Infrastructure Fund, I recommend you stop/switch your sip in all the three Infrastructure funds, and consider investing in Diversified Equity Funds. So, stop sips in DSP Tiger, ICICI Infra and Sundaram Capex Funds.
Alternatively, you can consider investing in HDFC Prudence Fund, Sundaram Select Focus Fund and DWS Alpha Equity Fund.
Best of luck,
Srikanth Shankar Matrubai.

Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

Too many Infra funds in Portfolio

Mr.Saurabh Bhatia wrote back :

Hello Sir, First of all, thanks for your comments to my previous mail. I began investing in November last year and as the situation is, have already lost a lot of unrealised value owing to the great market fall. I would like to know your thoughts on my current portfolio which I begin to feel is not very good and pretty polarised.


1. Tata Indo Global Fund - 15%
2. UTI Infrastructure Fund - 9%
3. Sundram Capex - 9%
4. Reliance Power Sector- 12%
5. JM Agro and Infra - 9%
6. UTI Infrastructure - 9%
7. JM Basic - 12%
8. Birla Sunlife Tas Saver - 10%

9. Principal Personal Tax Saver- 15%

Please advice about my decisions so far. I am a medium to long term investor with a time frame of more than 2 years. Please also tell as to which ones can be discontinued. I also hear commodity based funds tend to outshine others in difficult scenarios. Please provide your valueable comments. Thanks


SRIKANTH SHANKAR MATRUBAI replied :
Dear Saurabh Bhatia,
Yes, Mr.Saurabh, you are right, your portfolio is not showing a rosy picture, not just because of the Bearish Market but also some bad investments.
It is unbeliveable that 75% of your investments is in Infrastructure and Related Sectors!!!. A sure reciepe for Disaster. Your portfolio needs a makeover and a very urgent one at that.
To begin with, let me clarify, that I am not considering your ELSS investments as they have a lock-in period and both your ELSS funds are pretty good one at that.
The changes/switches you need to do is as follows:
Tata Indo-Global Fund - 15% (Retain 5%, and balance 10% , divide into 5% each and shift 5% to Tata Pure Equity fund and 5% into DSPML Top 100 Fund)
UTI Infrastructure Fund - 9%. (Sell in entirety and invest 5% in Birla sunlife Equity Fund and balance 4% invest in HDFC Prudence Fund)
Sundaram Capex Fund - 9% (Shift entire 9% into Sundaram Select Focus Fund)
Reliance Power Sector Fund - 12% (Shift 6% each into Reliance Growth Fund and 6% into Reliance Natural Resources Fund)
JM Agro and Infra Fund - 9% (This is a Close ended Fund and you will have pay High Exit Charges, if you switch out or exit now. So, with heavy heart, I have to say, you have no other option but to continue and stay invested)
UTI Infrastructure Fund - 9% (Obviously, this is UTI Infra Advantage Fund, which is again a Closed ended Fund and with the same reasons as above, continue)
JM Basic Fund - 12% (Sell and invest 4% each in Fidelity Equity Fund, HSBC Equity fund and DWS Investment Opportunity Fund)
Note, I would have recommended JM contra, but you already have a good exposure to JM Fund House, so it is better you diversify across Fund Houses also.
After the above switches and shifts, your portfolio would look something like this:
Sundaram Select Focus Fund - 9%
JM Agro and Infra Fund - 9%
UTI Infrastructure Fund - 9%
Reliance Growth fund - 6%
Reliance natural Resources Fund - 6%
Birla sunlife Equity Fund - 5%
DSPML Top 100 Fund - 5%
Tata Pure Equity Fund - 5%
Tata Indo Global fund - 5%
HDFC Prudence Fund - 4%
DWS Investment Opportunity Fund - 4%
Fidelity Equity Fund - 4%
HSBC Equity Fund - 4%
and of course your existing ELSS Funds
Birla Sunlife Tas Saver - 10%
Principal Personal Tax Saver- 15%


And, Mr.Saurabh Bhatia, you need to find a Good Mutual Fund Advisor immediately, so that the previous mistakes are not repeated.

Best of luck,
Srikanth Shankar Matrubai

Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

Zero Entry Load - A Failure

Recently, there were reports in Financial Chronicle and other Business papers that there were "few takers for zero entry load option in Mutual fund Investment". This was evident even before the introduction of the concept. There is huge list of funds and to choose one which is best suited to you, is not an easy task. Mutual Fund Advisors (also popularly called as Independent Financial Advisors) play a major role in this.
If investors go through these IFAs, it becomes easier for them in case they want any alteration or when they face any problem regarding dividends, etc. If the investors buy directly from fund houses, they need to approach each different Fund houses themselves, wasting nearly a day.
Even in developed nations, a major portion of funds are sold through the IFAs.
Many investors avoid going DIRECT becoz they do not want a Biased from the Fund house, but a Good unbiased advise which only a Qualified Mutual Fund Advisor can give.

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Funds other than ELSS for sip

Mr.Saurabh asked :

Hi



I am a new user to this site and I must
say you are doing a great job!!



My Portfolio includes a SIP of a total
of 6,500 amongst these funds



1. SBI Tax saver,93

2. Birla Tax Saver,96

3. Sundaram Tax Saver Fund



I hope to open another SIP in HSBC Fund
which can give me free Critical Illness cover. Could you please advice
if it is ok.



Also, please comment on the best fund
(irrespective of free moolah or tax saving scheme) in which a SIP can be
started for a long term perspective. I have adequate insurance as well.



Thanks



Saurabh


SRIKANTH SHANKAR MATRUBAI replied

Dear Saurabh,
Thank you for your kind words.
Are these the only funds in your portfolio or any there any more?. Why only ELSS funds?. You should be investing in Diversified Equity Funds which are not only more liquid, but also have given more returns.
All the three funds you have invested are very good and you can stay invested in the same. However, you can discontinue your sip in SBI Tax Gain 93 Fund, as its corpus has become bloated and also its recent performance has been below average. And moreover, the change of Fund Manager, would have some impact on the performance, which has to be seen.
Instead, you can consider investing in DWS Tax Saving Fund, which has a very good performance since its recent inception. The Free Life Insurance of 5 times your investment given by the Fund is an added Bonus. Even without this offer, you could consider investing in the Fund. It is that good.
As for your investment in HSBC Fund, it would have been better if you had given the name of the fund you have invested in. If it is HSBC Equity Fund, it is a very wise decision.
For non-ELSS funds, from a long term perspective, you can consider investing in the following funds through SIPs:
Birla sunlife Equity Fund
DSPML World Gold Fund
Fidelity Equity Fund
HDFC Prudence Fund
JM contra Fund
Mirae Asset India Opportunities Fund
Reliance Natural Resources Fund
Sundaram Select Focus fund
continue investing through sips. Do review your portfolio regularly.
Best of luck,
Srikanth Shankar Matrubai

Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

do I need to Balance my Portfolio?

Hi Srikanth,
Thank you very much for your advices on this goodfundadvisor blog.
Really they are very helpful. Please give me some suggestions to improve my
port folio. I feel it is not properly balanced currently. It has too many funds.
I am 30. can invest 25000 per month in MFs. I can take High risk as I dont have any
serious financial commitments. I am planning to invest for a 20 years.
My investment goals is long term and for retirement.

current investments

DSP-ML Top 100 Equity - RP (G) SIP Rs 2000 per month
DWS investment opportunity (G) SIP Rs 2000 per month
Fidelity equity (G) SIP Rs 2000 per month
Kotak Opportunities Fund (G) 25th August SIP with Rs 3000 per month
Reliance Growth Fund - RP (G) SIP Rs 3000 per month with SIP insurance
Sundaram Select Focus - RP (G) 25th August SIP with Rs 2000 per month
SBI Magnum Multiplier Plus (G) Rs 20000 Lumpsum in july
HDFC Growth Fund (G) SIP Rs 2000 per month
Kotak Opportunities Fund (G) SIP Rs 3000 per month with starkid insurance
Reliance RSF - Equity SIP Rs 2000 per month
SBI Magnum Contra Fund (G) SIP Rs 2000 per month
Tata Infrastructure Fund (G) SIP Rs 2000 per month
ICICI prudential Infrastructure Rs 5000 Lumpsum

Thanks,
Anjan


SRIKANTH SHANKAR MATRUBAI replied
Dear Anjan,
Thank you for your kind words. I hope you have taken sufficient Term Insurance to secure your future. If not, do that on priority basis.
You have a very good selection of funds. You do not need to tinker too much with them. Your 2 lumpsum investments in SBI magnum Multiplier Plus and ICICI Prudential Infrastructure can continued to be held for now.
You have 2 sips in Kotak Opportunities Fund of 3000 each. While you continue with the Starkid Insurance sip, you discontinue with the other one and consider investing in
2000 Sip in Birla Sunlife International Equity Fund - Plan A (An international fund, and added bonus of Free Life Insurance of 2 lakhs)
1000 Sip in JM Contra Fund (Although you have SBI Contra, note that SBI Contra is more of a Diversified Fund rather than a Contra Fund)
Also, switch your sip investment in HDFC Growth Fund to HDFC Prudence Fund. This Fund has been a stellar performance since inception and continues to work its magic even in Bear Market conditions.
Just because you can stay invested for 20 years, does not mean "Invest and Forget". Keep reviewing your investments every 6 months or so to see any noticeable change in any fund's mandate/performance/attribute.
Slowly, as the years progress, switch out from Opportunities Funds to Large Cap Funds to give better stability to your Portfolio.
Anyway, good work. Keep going on.
Best of luck,
Srikanth Shankar Matrubai.

Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

23 year old's portfolio

Dear Shrikanth,

I am a regular visitor of your Blog. Keep up the good work.

I am 23 year old and investing 6000 every month through SIP's. I am a long term investor , planning to invest for atleast 5 years.



2000 in HDFC Growth Fund.(Growth)

2000 Birla Sunlife Frontline Equity Fund. (Growth)

2000 DSPML Top 100 Equity Fund. (Growth)

Do you think that is this a good distribution as i can take higher risks at my age.

Would you suggest any changes?



Thank you in advance.



Rohan Agarwal



SRIKANTH SHANKAR MATRUBAI'S REPLY

Dear Rohan,
It is very heartening to see that such an young age, you have started investing in Mutual Funds, and that too with a Long Term view. Good Going.
You seem to have tilted your investment too much towards Large Cap Funds. While Large Cap Funds do protect you form Downside when the Market is Bearish (like we are in now), but they tend to lag a bit compared to Diversified Equity Funds over a Longer Term.
With Age on your side and consider your long term view, you can consider investing in some Good Diversified Equity Funds which also have some exposure to Mid-Cap and Stocks which are Growth Oriented. These Funds do not have any Cap bias nor Sector bias, concentrating purely on Growth and can thus give you Better return than Pure Large Funds.
While you can continue your investment in HDFC Growth Fund, you may reduce your sip in Birla sunlife Frontline Equity fund and DSPML Top 100 Fund.
With the 2000 saved, you can invest in
DWS Investment Opportunity Fund
fidelity Equity Fund
Best of luck,
Srikanth Shankar Matrubai.

Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

Funds for children education

Atul Patel asked
Dear Srikanth,
Suggest me a good MF and SIP to my childrens. So after 5-7 yrs they will get some good amt for their education.

SRIKANTH SHANKAR MATRUBAI replied
Dear Atul Patel,
It would have been better if you had also given your investment amount and target amount for me to suggest suitably. Anyway, as a Thumb Rule, I have suggested the following funds. Before investing in them, do secure your future by taking adequate Term Insurance Cover. And then, you can invest in the following.
Consider investing in Large Cap Funds and Diversified Equity Funds,
Birla Sunlife Equity Fund
DSPML Top 100 Fund
DWS Tax Saving Fund
Fidelity Equity Fund
HDFC Prudence Fund
Sundaram Select Focus fund

Preferably invest through sips. While investing in Birla Sunlife Equity Fund, invest through Century Sip, to avail Free Life Insurance.
Also, in DWs Tax Saving fund, you will be getting Added Bonus of Free life Insurance of 5 times your Investment.
True, combining Insurance with Investment is not wise. But that is for ULIPs, which are very costly, non-transperanct and high charges.
Best of luck,
Srikanth shankar Matrubai

Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

is DSPML World Gold Fund a Good buy?

Lot of my clients keep asking me Whether They should Buy DSP/AIG World Gold Fund. Here is my take on the same.
Investing in gold stocks allows investors to benefit from the growth potential of equities and the strong fundamentals of gold. This is the fund’s main investment premise. When gold prices rise, the operating profits of gold mining companies rise by a greater proportion. As a result, stocks of gold mining companies can significantly outperform gold as an asset class.

I personally believe that it is a product that combines the two themes of geographical diversification and an indirect exposure to gold. Another notable feature of the parent fund is that it has beaten its benchmark FTSE Goldmines index for the past twelve years. DSP ML is upbeat about the prospects of gold as increasing inflation across the globe and also the volatility in financial markets will mean an increased emphasis on gold as a safe asset class. Also, the fund house holds the view that it is within the realms of possibility that central banks of the world may revert back to the gold standard for parking their reserves. For example, if China decides to shift even 1% of its reserves to gold, it could mean a rise in global demand by 18%.
While all this is almost akin to speculation about the future, the fact remains that this fund does offer a cross border diversification to investors who are largely invested in domestic equity

While the price of gold is off its earlier highs, the fund continues to predict a strong rally in gold prices on the back of significant investment demand from Central Banks and investors, as they respond to rising inflation and a weakening dollar.

According to Black Rock, stocks in its portfolio have also underperformed because some mining companies have hedged their recovery prices and have not been able to really benefit from rising prices. With many of these companies de-hedging, they will be better placed to capitalise on the next leg of the gold rally.
While everyone is entitled to his/her opinion, I feel that having a Small Percentage of DSPML/AIG World Gold Fund in your portfolio will only enhance the returns and asset allocation and diversification in your portfolio.
Best of luck,
Srikanth Shankar Matrubai.

Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

Why SIP is Good

Systematic Investment Plans (SIPs) are much misunderstood. For one, investors often mistake SIPs as an investment avenue rather than a mode of investing in mutual funds. Then there are investors who invest in SIPs expecting quick results without fully appreciating the need to invest via SIPs for the long-term.

In an earlier article, we discussed how SIPs are perceived incorrectly by many investors as standalone investments. This explains why one of the most common queries we receive on the website is – which is the best SIP? Unfortunately, these investors have not been educated by their investment advisors about SIPs i.e. SIPs are only a mode of investing and not an independent investment avenue.
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Minimum tenure of an SIP
Another misconception investors have about SIPs is with regards to the minimum tenure. Most fund houses have a minimum SIP tenure of 6 months. This leads investors to believe that 6 months is the ideal time frame for investing via SIPs (just like a lot of investors invest Rs 5,000 in mutual funds simply because that is the minimum investment amount for several mutual fund schemes).

In our view, investors should ideally invest via SIPs over at least 2-3 years. This way they can exploit the most critical benefit of an SIP – rupee cost averaging. Let’s understand how this is possible.

For an SIP to deliver the goods, it must witness a falling market. This way the investor can average out his cost of purchase. If the investor does not witness a downturn, i.e. he is only exposed to a market rally, the average purchase cost of his SIP will rise over a period of time.
SIPs in a rising market
Month of investment NAV (Rs) No. of Units
January 11.00 45.45
February 12.00 41.67
March 12.50 40.00
April 12.90 38.76
May 13.25 37.74
June 13.40 37.31
Avg. purchase cost of 6 SIPs Rs 12.45
(The example is for illustrative purpose only.
We have assumed that the SIP is done on the first trading day of the month; SIP amount is Rs 500.)

In the above table the average purchase cost of the SIP is Rs 12.45. Clearly, the SIP has not worked in the investor’s favour. Why is that? Because if he had instead invested lumpsum in January, his purchase cost would have been Rs 11.00 as opposed to the average purchase cost of Rs 12.45 over a 6-month period.
SIPs in a falling market
Month of investment NAV (Rs) No. of units
January 11.00 45.45
February 12.00 41.67
March 12.50 40.00
April 12.90 38.76
May 13.25 37.74
June 13.40 37.31
July 12.10 41.32
August 11.20 44.64
September 10.30 48.54
October 10.10 49.50
November 10.50 47.62
December 10.20 49.02
Avg. purchase cost of 12 SIPs Rs 11.50
(The example is for illustrative purpose only.
We have assumed that the SIP is done on the first trading day of the month; SIP amount is Rs 500.)

However, if the investor had opted for a longer investment tenure of say 12 months, he could have benefited from greater fluctuations in the mutual fund’s NAV. These fluctuations which arise over a market cycle lower the average purchase cost of the SIP over the long-term.

This is apparent from the above illustration. As is evident from the table, if the investor had taken an SIP for 12 months (instead of 6 months) his average purchase cost would have declined to Rs 11.50. Compare this with the average purchase cost of Rs 12.45 for a 6-month SIP.

It can be argued that there is no way for the investor to know when there is likely to be a turnaround in the markets (in this case a downturn). That is exactly our point. Since the investor does not know when markets will fall (and lower his average purchase cost), he must opt for a longer SIP tenure. Or at least he must manage his investments in a manner so that when his existing SIP terminates without witnessing a dip in stock markets, he can extend it further. This way should the markets fall, his SIP can benefit from a dip in the mutual fund NAV which in turn will lower his average purchase cost.

Points to remember before opting for an SIP

1) Ironically, while SIPs are meant to eliminate market-timing, investors must opt for a long-enough SIP tenure so as to ‘time’ the market downturn.

2) SIPs are equally beneficial in a falling market. Most investors believe that lumpsum investments (as opposed to SIPs) prove more beneficial in a falling market. This is only partly true. Having an SIP in operation during a falling market can ensure that investors stand to benefit should markets fall even further.

Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

Buy GOLD NOW!!!!

Dear all,

Gold's inflation-adjusted price — $2,270 — has not yet been reached, indicating the price of gold can nearly TRIPLE from current levels.

If history is any guide, then there is nearly a 100% certainty that gold will reach $2,270 before gold's bull market is over. And quite possibly, even higher! Here's why.

Keep in mind that throughout history, asset classes always reach their inflation-adjusted price. They wax and wane, falling behind the inflation curve at times, and at other times, catching up and exceeding their inflation-adjusted prices.

That's true of all asset classes, be they bonds, stocks, commodities.

This is especially true in the post-1971 period when paper money's relationship with real money has been severed via the elimination of the gold standard.

Supply and demand fundamentals support a continuing bull market in gold.

In fact, demand for gold in dollar volume reached a record high in the second quarter of this year. Meanwhile, supplies seem to be tightening further.

South African gold production plunged more than 12%. And many major gold miners are now forecasting a slide in production for the second half of this year.

Plus, central bank sales of gold are running at their lowest level since 1999.

Both short and long term, the demand/supply equation in gold favors a long-term bull market
So, now that you have decided to invest in Gold. My advise is Do not invest in Gold ETFs.
In Gold ETFs you give your money to a fund manager and the fund manager buys gold only from certain place and keeps it at a certain place which is mandated by the law. So it is the only investment made by the fund company and the NAV of the fund that one owns, moves in line with the market price of the gold; less the expenses. So in that sense all gold ETFs are equal; they just do as well or as bad as any other. So fund selection of ETF is not important.
The Better alternative would be to invest in Funds like DSP BlackRock World Gold Fund and/or AIG World Gold Fund. Both these funds invest in Gold Mining Stocks Worldwide and have a terrific track record. As the Stocks tend to have a higher co-relation to Gold, they tend to rise higher than Gold and Fall faster than Gold. But, with Gold forming a Bottom and Looking Very Bullish, these Are the Funds you MUST invest in.
Don't miss this Golden Opportunity.
Best of luck,
Srikanth shankar Matrubai.

Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

Too many ULIPs

Mr. Arun wrote :
Dear Shrikant

Just gone through your blog. I would like to take ur advice on my investment. I am working abroad and planning to be here for another couple of years. I have the LIC policies of 5L,2.5L and prulife of 10L apart from that LIC ULIP market plus G of 10k halfyearly.
MF SIP 3000 each on DSP Merril Lynch TIGER Reg G , SBI Magnum Contra G, Kotak Opp G all six months old and 30K one time in ICICI prud infra G fund.

I am 30 now and just married. I can save 20K avg monthly. Now I see all my MFs are in red for the past couple of months. Can you tell me whether I am in right track of investment. Till I am abroad I can do investment taking risk. . Also I read that invest in many funds is not a good method.
Can you please guide me with funds I shud invest.

Thanks
arun


SRIKANTH SHANKAR MATRUBAI replied
Dear Arun,
Yet again, same mistake of treating Insurance as Investment. You can see my other posts and you will know that I hate ULIPs. Ulips are the most mis-sold (conned should be the word) product in this country. These Ulips have very little transperancy, high premium charges, tough exit conditions. Yet, people, even educated ones fall in the trap laid by the Insurance Sales Agents and blindly invest in them.
You continue your investment in Endowment Policies and Term Insurance products. But, please please, STOP and SELL your ULIP investments immediately and instead invest in Mutual funds, which are cheaper, more transperant and definitely easy to exit.
Stay invested in the Lumpsum investment of ICICI Infrastructure Fund for now. Do review again around March, when the conditions could be slightly for Infrastructure Stocks and thus, this fund.
Continue your 3000 sip in both SBI Magnum Contra Fund and Kotak Opportunities Fund for now. Both are good funds with a reasonable track record. Note that SBI Magnum Contra Fund is not a Contra Fund, with more than 60% in Large Cap Holdings.
However, you can discontinue your further sips in DSPML Tiger Fund, as Infrastructure Funds may take time to deliver returns and also, you have sufficient exposure to Infrastructure Sector through ICICI Infrastructure Fund also.
You should add a Good Large Cap Fund to your portfolio, which is sorely lacking now, especially in these Bearish Times. Do consider investing in
Birla Sunlife Frontline Equity Fund
DSPML Top 100 Fund
HDFC Top 200 Fund
HSBC Equity Fund
Sundaram Select Focus Fund
Of course, age is on your side. But that does not mean, you can invest in only High Risk High Return Funds. You do need to have sufficient Large Cap and diversified Fund in your portfolio.
Best of luck,
Srikanth shankar Matrubai


Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

20 lakhs in 3 years for Child Education.

Ms. Priya Sharma wrote :
Hi,


I accidently came across your blog while searching for advice on mutual funds. I want your help in investment. I have the following investment


AVIVA little master- 2000/ m SIP

Bajaj alliance unit gain-4000/m SIP

HDFC tax saver-2000/m SIP

PPF-2000/m SIP


The first two are ment for my kids education they are now 6 and 2

I can invest 15000/ month . Can you suggest some funds.

I require 20 laks after 3 years. I have 7 laks now


thanking you

priya

SRIKANTH SHANKAR MATRUBAI advised ::

Hai Priya,
I am very sorry to say this, but your investments are not at all good. Your investments in Aviva Little Master and Bajaj Allianz Unit Gain are both ULIPs. And as you may already be knowing, ULIPs are the most missold (conned by agents, I should say) products in this country. These ULIPs have high Premium Charges which eat into your returns and thus leave you with lesser returns when compared with Mutual Funds. If you can consider stopping and cancelling these Ulips, please do so immediately. They are a waste of your money.
You have much better options and alternatives for investing for your children's education. First of all, take adequate Term Insurance to give security to your family. Then start investing in Good Diversified Equity funds.
Your investment in HDFC Tax Saver is a good one. Stay invested in the fund for now. However, you can stop future sips and rather consider investing in DWS Tax Saving Fund. This Fund has not only a good track record in its short history, but also as a added bonus give FREE LIFE INSURANCE 5 TIMES YOUR INVESTMENT.
For your 15000 per month investment, You can consider investing in the following funds.
1000 * 2 (two different dates) in birla sunlife Frontline Equity Fund (2000)
500 * 3 (3 different dates ) in Fidelity Equity Fund (1500)
1000 * 1 in JM contra fund (1000)
1000 * 2 in Kotak K30 Fund (2000) (Invest through Kotak Star Kid Facility to avail Free Life Insurance)
1000 * 2 (2 different dates) in HDFC Prudence Fund (2000)
1000 * 2 in HSBC equity Fund (2000)
500 * 2 in Reliance Growth Fund (1000)
500 * 2 in Reliance Natural Resources Fund (1000)
500 * 3 in Sundaram Select Focus Fund (1500)
1000 * 1 in Tata Pure Equity Fund (1000)

Achieving 20 Lakhs in 3 years is bit difficult, even after considering that you have 7 lakhs right now. So, in effect, to get another 13 lakhs in 3 years, even at 20% returns, you need to invest nearly 27000 per month.
So, either scale down your expectation or increase your monthly sip outgo.
Best of luck,
Srikanth Shankar Matrubai.

Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

How is DSML Tiger and Reliance Power Fund?

Mr.Arun Jhakar wrote :
Hi Srikanth,


I have read few of your replies on goodfundadvisor bolgs regarding Mutual Funds and was thinking to get a second opinion about my funds from your side.


I have got following two MF in my portfolio where i am investing Rs 5000 (each of them) per month (SIP) since Nov 2007.

1) DSPML T.I.G.E.R. Fund

2) Reliance Diversified Power Sector Fund


As of now the absolute return is -21% and the current situation for DSP Meryll Lynch as well as Power sector is not too good.

What do you suggest -

-- should i continue or stop the SIP and wait.

-- should i invest in some other MF to get better results.


Can you please reply this mail with your opinion or send me the link where i can check your comment.


Thanking in anticipation!!


Arun


SRIKANTH SHANKAR MATRUBAI advised :

Dear Arun Jakhar,
Both of your investments are into Sector/Theme Funds, which I strongly advise AGAINST investing, especially if these are going to be the only funds in your portfolio. And the fact that you started your sip in the PEAK of the Bull Run has only compounded your losses.
You need to immediately stop your sips in Both the Funds. You need to invest in Diversified Equity Funds. Sector/Theme Funds do have huge volatility and tend to outperform the markets when the trend goes against their invested Sectors. Diversified Funds on the other hand, as their name suggests invest in a Basket of Stocks across Sectors and thus insulated from any Downturn in any sector. And also, most importantly, note that if the Fund Manager Does find any Sector (Power, Infrastructure, in your case) attractive, he WILL invest in these sectors.
DSPML Tiger Fund has a Better Track Record than most funds in Infrastructure Sector. But still, you would be better off by investing in DSPML Equity Fund or DSPML Top 100 Fund.
Your other investment is in Reliance Diversified Power Sector Fund. This fund had a great run. However, the same is very unlikely to be repeated in future. Even an Average Return should be difficult from this fund. This fund has the highest Corpus among all the funds in India right now. Servicing such huge corpus in these bearish times, should be a very very challenging task for the Fund Manager.
You can stop the sip in this fund and can consider investing in Birla sunlife Equity Fund and/or Fidelity Equity Fund. These funds would not only protect you from downside but also have the potential to give you more return than the funds you are currently invested in.
BEst of luck,
Srikanth Shankar Matrubai

Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

Reliance Diversified Power Sector Fund

mr.SHAKTI wrote :
which you suggest to change the reliance power sector fund ? Its going to give good returns in next 2 years.

shakti

SRIKANTH SHANKAR MATRUBAI'S REPLY
Dear Shakti,
I do not agree with you. I feel Reliance Diversified Power Sector Fund will face challenging and tough time going forward. The Power Sector itself is facing problems with regard to Raw Materials. The valuations are also on the higher side inspite of recent meltdown.
Most importantly, Reliance Diversified Power Sector Fund is the biggest fund in the country. With such a big corpus, and that too with a mandate to invest only in Power and Related Sectors, the fund will rather be an underperformer, at best a Average Performer. I suggest you to invest in this fund, only if are absolutely convinced about the Power Story and willing to ride out the volatility and stay invested for at least 5 - 7 years.
Otherwise, there are many other Good funds which are better placed than Reliance Diversified Power Sector fund.
Best of luck,
Srikanth Shankar Matrubai


Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

Shall I take another Insurance?

VEERU wrote :
Hi Srikanth,

I get a chance to see u r blog http://goodfundadvisor.blogspot.com. It
gives me good information related to the investment.
Please advise me on my investments. I am 32 (Male). I am having 2
kids. 1st KID 4 years and 2nd KID 2 months old.

My Investments:

I am paying nearly 1 Lac rupees towards an Insurance(Jeevan Sree +
endowment) for me+wife +1st Kid for every year. I have invested 1 Lac
rupees in Shares directly. Since Market is down and value also come
down. I am planning to keep them for long term. My concern is one of
friend suggested me insurance for 2nd Child "TATA-AIG Maha life Gold"
Policy where i need to pay 1 Lac per year almost 12 years.

After that every year till his life 1 Lac per year. After, all i went
thru u r blog i am planning to think my friends advice. I am not
interested in that. I am planning to switch to mutual funds + SIP.
Please suggest me which funds will suit to me and I can invest 5K to
7.5K per month in SIP. Totally these investments for long term use
only.

Thank you,
Veeru



SRIKANTH SHANKAR MATRUBAI'S REPLY ::::
Dear Veeru,
Paying 1 lac annualy, suggests to me, that you are already sufficiently insured. Of course, it can concluded only when I know your annual expense. The thumb rule says, One should insure for about 10 years of annual expenses. suppose your annual expense is say about 2 lakhs, then you should insure for 2 lakhs * 10 years == 20 lakhs.
And for Insurance, Term Insurance is the Best. The charges are very very low. Now that you already have Jeevan Shree + endowment, go for further insurance only if you feel you are underinsured. And go for only Term Insurance.
Remember INSURANCE IS NOT AN INVESTMENT.
My advise is give the "tata aig Maha life gold" a miss and say Tata to further Insurance.

I feel sad to see that your investment is down, it is of course expected, after the Big Correction that has happened. You have to keep them for Long Term, there is no other option. (All shares we buy, if it falls, automatically becomes Long Term Investment!!!)
Your mind veering towards Mutual Funds is but natural. Mutual Funds are the best avenue for Investments. They are transperanct, flexible, and give Best Returns among all the Asset Classes.
You can consider investing your 5k in the following funds which I feel should give you Above Average Returns.
1000 * 1 in Birla Sunlife Equity Fund (1000) (Investing via Century SIP will get you upto 1 lac Insurance Free)
1000 * 1 in DSPML Top 100 Fund (1000)
500 * 1 in DWS Tax Saving Fund (500) (Free Life Insurance of 5 times your investment is added Bonus)
500 * 1 in Fidelity Equity Fund (500)
1000 * 1 in HDFC Prudence Fund (1000)
250 * 2 in Reliance Natural Resources Fund (500)
250 * 2 in Sundaram Select Focus Fund (500)
This portfolio will have sufficient exposure to Large Cap, diversified Equity Fund and 1 Theme Fund (Reliance Natural Resources Fund)
Keep investing through sips.
Do review your investment every 6 months or so. Allow your funds to work by staying invested for long and reap the rewards.
Best of luck,
Srikanth Shankar Matrubai.


Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

Where to invest 1600 per month?

Sir,
I am a student. thank you very much sir.
I saw a video clip on sundarambnpparibas.com, the fund manager explaining about mutual funds that by investing REGULARLY,DISCIPLINED and having PATIENCE without much worrying aboutmarket ups and downs for longterm period you are probably aCROREPATHI in near future.
Sir, now i am 22 years of age worried about my future needs and like to invest atleast 10 years from now.for this i can invest 1600/month.
I selected HDFC TOP 200 = 1000/month ,
SUNDARAM select focus = 300/month ,
RELIANCE growth/RSF fund = 300/mth.
On my previous query u suggested birla and fidelity equity funds,but both are not available in my area location(hyderabad) and the funds which i selected are at the same place(all 3 are main
branches which reduces entry load) so i choosed these funds.
Sir in a week i am going to start my SIP through these funds.based on your experience plz suggest on my funds bcoz i am very much worried about future needs(children,health...etc).
Sir,i have one more query for you,why experts suggests not to go for new funds? always go for well performed and well rated fund with good returns?even the new funds occupies the top position some or the other day?correct me sir if i am wrong.finally,plz have a clear look on my funds,is there any modification required?
thank you very much sir :)


SRIKANTH SHANKAR MATRUBAI REPLIED :::::

Dear Ajay Kumar
At the outset I congratulate on starting investments at such a young age of 22. And your choice as Mutual Funds, is absolutely bang on target.
Your choice of funds,
HDFC Top 200 Fund
Reliance Growth Fund
Sundaram Select Focus Fund
are very very good and deserve to be invested.
But your amount of 1600 is too small for you to become a crorepati even if you invest for 10 years. Your 1600 per month even at 20% CAGR will leave you with a end value of 5,50,898 only after 10 years.
But your "Small" amount of 1600 per month will get you Rs.1 CRORE after 25 years!!!.
If you want Rs.1 crore at end of 10 years, at 20% return, you need to invest 29000 per month for 10 years.
However, if you invest for 20 years, you need to invest only 4000 per month!!!.
I prefer Fidelity Equity/Birla Sunlife Equity Fund over Reliance Growth Fund due to the bungling corpus of Reliance Growth Fund which may hamper swift movements by the Fund Manager.
You should not worry about distance. After all, you are going to the Fund House only once. And, later on, maybe, maximum of 1 time a year, if at all.
NFOs are best avoided because they take time for money to be deployed, and also since they do not have track record, the fund manager's capability will also not be known. It is always better to know the performance over all types of market movement, which a NFO can't.
Best some NFOs can be considered if they are promising and different in their investment approach.

Best of luck,
Srikanth Shankar Matrubai


Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

Retired Persons Portfolio

Mr.Anusirdi wrote :
Sir,
I am a retired and requires advice on tax payment.My income is ....
Monthly pension.... Rs.11000/-per month
Interest on FD... Rs. 6000/-per month
Rent on property... Rs 2000/-per month

My monthly expenditure on house loan Emi and insurance
House laon EMI... Rs. 5500/- per month
PLI... Rs. 1100/- per month

MY yearly premium of ULIP
Yearly... Rs 55000/- per anum
Can you help me in modifying my present MF portfolio for better returns after 2 years period
as on 26082008 Quantity Inv. Amt

Birla SL AAF -Conservative (D) 604.747 9,295
HDFC Prudence Fund (G) (2) 116.34 15,357
LIC MF Floater MIP-Plan A (AD) 2068.218 25,005
LIC MF Floating Rate Fund (G) 2272.767 27,991
LIC MF MIP (MD) 4885.623 50,029
Reliance Diver. Power - RP (G) (10) 148.744 10,000
Reliance Equity Fund - RP(G) 1000 10,000
Reliance Growth Fund - RP (G) (11) 61.347 24,000
Reliance Natural Resources (G) 977.995 10,000
Reliance Vision Fund - RP (G) (10) 43.137 10,000
SBI Magnum Contra Fund (G) (5) 1383.639 75,000
SBI Magnum Global Fund (D) (14) 1744.316 58,000
SBI Magnum Index Fund (G) 235.388 10,000
SBI Magnum Insta Cash (G) 546.747 10,000
SBI Magnum Tax Gain (D) 182.632 10,000
UTI VIS - Index Linked (D) 1759.201 25,000
Total : 379,677


SRIKANTH SHANKAR MATRUBAI'S REPLY ::::

Dear Anusirdi Sir,
As you are already on the wrong side of 50, it is better for you to be conservative while investing.
You do have good set of funds. Being a Retired Person having only Pension, Int on FDs and rent income, you need to supplement your income by investing in Large Cap Funds and Diversified Equity Funds, which you do have, but you could do with some Modification of your portfolio.
You have 16 funds in your portfolio, which is on the higher side. Your portfolio needs some trimming.
Immediately switch from Reliance Diversified Power Sector Fund to a Balanced Fund like Reliance Regular Savings Fund (Balanced option) or Large Cap fund like Reliance Vision Fund.
Also switch from SBI Global fund and SBI Index Fund to SBI Balanced Fund.
Redeem the following funds
LICMF Floating Rate Fund
Reliance Equity fund
SBI Insta Cash fund
UTI VIS Index Linked

From the proceeds you receive, you consider investing in Good conservative Large Cap Funds like
Birla Sunlife Frontline Equity Fund
DSPML Top 100 Fund
Sundaram Select Focus Fund
After effecting these changes, your portfolio will look something like this.
Birla SL AAF -Conservative
Birla Sunlife Frontline Equity fund
DSPML Top 100 Fund
HDFC Prudence Fund (G)
LIC MF Floater MIP-Plan A
LIC MF MIP (MD)
Reliance Growth Fund - RP (G)
Reliance Natural Resources (G)
Reliance Vision Fund - RP (G)
SBI Magnum Contra Fund (G)
SBI Magnum Balanced Fund
SBI Magnum Tax Gain (D) 182.632 10,000
Sundaram Select Focus Fund

Best of luck,
Srikanth shankar Matrubai
Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

MINIMUM INVESTMENT AMT FOR SIP

Hi Shri,

have a query.... you had mentioned that to go for 250*2 SIPs for Reliance growth.

my query...

for funds other than ELSS the first minimum purchase is 5000 and there inafter comes the sip of 500 or 1000....

pl let me know how to go for 250 sips without first minimum purchase..

thanks



Sharesher said...

Dear,
For sips, 5000 is not the Minimum purchase price. Reliance Mutual Fund and Lotus Mutual Fund allow sip of even 100 per month.
And for your information, Some Fund Houses like Sbi allow 1000 as Minimum Purchase price and Even Reliance in its Reliance Regular Savings Fund has only 500 as Minimum Investment amount.
Regards,
Srikanth Shankar Matrubai
Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

HELP ME CONSOLIDATE MY PORTFOLIO

Dear Srikanth,


I came across your blog last week and found it interesting
enough and thought of seeking your advice on my MF portfolio.
I have been investing in the following Mutual Funds since

January 2007 via SIP and wish to remain invested in them for the next 15-20
years.





Fund



Portfolio weight


DSPML Top 100 Equity Reg



3%


HDFC Equity



15%


HDFC Prudence



1%


HDFC Tax saver



5%


Kotak 30



3%


Magnum Contra



15%


Magnum Global



7%


Magnum Taxgain



6%


Reliance Diversified Power Sector Retail



7%


Reliance Growth



10%


Reliance Vision



14%


Sundaram BNP Paribas Select Midcap Reg



3%


Sundaram BNP Paribas Taxsaver



3%


Tata Infrastructure



8%



Please suggest as what needs to be done if I wish to consolidate
my portfolio to 5-7 diversified funds plus 1-2 ELSS funds.

Moreover, would this be the right time for portfolio consolidation

since most of the funds are in Red since January due to market downturn.

Warm Regards
Sandeep Nangrani



SRIKANTH SHANKAR MATRUBAI REPLIED
sharesher

Dear Sandeep,

As you have not given any details about yourself like age, risk profile, I have assumed you to be aged about 35 years with a medium risk profile considering your 15-20 years time horizon. It feels really good to see people like you who would like to stay invested for 15 years and above. Also, the fact that you are investing through sips only gladdens my heart more. Congratulations. With your kind of time horizon, you can definitely plan to earn high returns on your investments.

You have 31% exposure to one Single Fund House, Reliance. Normally, it is not considered good to have more than 20% exposure to 1 single Fund House.
Your exposure to HDFC Mutual Fund @ 21% is just about Ok.
You have 20% exposure to Large Caps.
You have 15% exposure to Sector Funds (Rel Diversified Power & Tata Infra)
You have 64% exposure to Diversified Equity funds (HDFC Equity, HDFC tax Saver, Magnum Contra, Magnum Global, Magnum Taxgain, Reliance Growth, Sundaram Midcap/Taxsaver).

You need to increase your exposure to Balanced Fund and also add an International fund to your portfolio.
You can stop your sip in the following funds and also cash out due to their below par performance and hazy future ::::
Magnum Global (Only the name is Global, but it invests in Indian Equities only)
Magnum Taxgain
Reliance Diversified Power Sector Fund (Bigger Corpus than even Reliance Growth and not so rosy picture for Power Sector)

Switch from HDFC Equity to HDFC Prudence Fund
Also switch from Sundaram Select Mid cap to Sundaram Select Focus Fund. (your mid-cap exposure will be taken care by Reliance Growth Fund).
Instead of Tata Infrastructure, you can invest in DSML tiger Fund which has wider range of stocks within Infra Sector (Financial, Power, Metals, etc) and is less vulnerable in a DownTrend as evidenced recently)
You can consider adding Fidelity International Opportunities Fund which would take care of your Intl Exposure.
For ELSS, you can continue to stay invested in HDFC Tax Saver and Sundaram Tax Saver, and for your furture ELSS tax funds, you can add
DWS TAx Saving Fund (Added Bonus is Free Life Insurance of 5 times your investment amount)
Birla sunlife Tax Relief 96 Fund
Lotus India Tax Plan
After effecting these changes, your portfolio will look like this :
Birla sunlife Tax Relief 96 Fund
DSPML Top 100 Fund
DSPML Tiger Fund
DWS Tax Saving Fund
Fidelity International Opportunities Fund
HDFC Prudence Fund
HDFC Tax Saver Fund
Lotus India Tax Plan
SBI Magnum Contra Fund
Reliance Growth Fund
Reliance Vision Fund
Sundaram Select Focus Fund
sundaram Tax Saver
Best of luck,
Srikanth Shankar Matrubai

Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

High Risk-High Return funds

Mr.Vipin asked ::

want to invest 2,00,000 rs in high risk mutual fund for 5-8 yr.what is maximum return i can get.and i want to get dividend quarterly .which mf provide maximum return in india

SRIKANTH SHANKAR MATRUBAI replied ::::

Dear Vipinenator, you seem to be very aggresive investor, going by the query you have posted, here and in other posts.
To get 2,00,000 in 8 years, through sip investment at 21% rate of return, you need to invest 877 per month. And at a reasonable 18%, rate of return, you need to invest 993 per month.

Of course, if your investment is lumpsum, then the arthimatic changes dramatically.
To get the same 2,00,000 after 8 years, at 18% returns, you need to invest in a lumpsum a amount of Rs.53208!!!
Even assuming a return of 21%, you need to invest Rs.43526 as a lumpsum.
so, it is always advantageous to go for sip.
the funds you should consider investing.
Birla Sunlife Equity Fund
DWS Opportunities Fund
JM Contra Fund
ICICI Dynamic fund
Lotus India Agile Fund
Mirae Asset India Opportunities fund
Reliance natural Resources Fund
sundaram Rural India Fund


these are all Aggressive Funds and should suit your risk profile. Do review your investment every 6 months or so.
Best of luck,
Srikanth Shankar Matrubai
Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

FUNDS WITH MINIMUM RISK

Mr.BABANI asked ::

I am 38 yrs old , i am in a private service hence my risk profile is minimal(also i have my parents to look after) , my investement goal is long term which can range from a minimum of 03 years to 10 years.

i am primarily investing to garner money for my children education who are prsently 04 and 01 yrs old

i am therefore not investing in stocks but in mutual funds only.


i have alredy invested rs 10000/*- in personal tax saver just now. in addition i want to invest a another 30000/- in mutual funds.
other than the aforesaid mutual funs i wanted to know about 2 mutuals which my agent has suggeted

1) reliance diversified power sector fund- gr
2) tata infrastructure fund - gr

whats your take on these two


i hope i have answered your queries , if not kindly let me know if you need any further data.

regards

babani

SRIKANTH SHANKAR MATRUBAI explained ::::


Dear Babani,
At 38 years, and 3 year time horizon, your risk profile is minimal, you are better off investing in Large Cap Funds and Diversified Equity funds. Instead of investing 10000 in Personal Tax Saver, you could have invested in Large Cap Fund. Invest in Tax Funds only to save your Tax Liability.
Also, you are better off investing through SIPs instead of lumpsum. SIPs are easy on pocket and also serve you better. Even of sip of 100 is available in Reliance and Lotus Mutual funds.
For your 30000, you can consider investing in
Birla sunlife Frontline Equity Fund
DSPML Top 100 fund
Fidelity Equity Fund
HDFC Prudence Fund
HDFC Top 200 fund
Sundaram Select Focus Fund

I have given 6 funds, invest 5000 equally in them. Route all your future investments in these funds only. Have a focussed portfolio and do not become a 'Fund collector'.
Preferably, invest through sips.

Regarding two other funds you are considering, I am sorry to say this, but the funds selected by your agent are not going to give you very high returns. Both the funds are Sector Funds and may be bogged down by Bearishness in that Particular Sector.
They already had great run in the past and repeatation of the same is not expected. Both the Power and Infrastructure Sectors have been hit by Interest Rate hikes and Raw Material Shortages. You are better off investing in Diversified Equity Funds as already suggested to you earlier.
Best of luck,
Srikanth Shankar Matrubai

Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

IS SUNDARAM TAX SAVER FUND A GOOD CHOICE?

A Guest asked ::
Hello,

I need to invest montholy SIP Rs 5000 in ELSS for tax lanning.
I have selected Sundaram BNP tax saver fund for the same.
Is the choice is right or not?
Please suggest.


SRIKANTH SHANKAR MATRUBAI'S REPLY :::::

Dear Guest,
Your choice of Sundaram Tax Saver Fund is a very good one. But investing all your investment amount in One Fund or One Fund House is not such a wise move. Besides Sundaram, you should also look at other Good funds. Some of them are
Birla sunlife Tax Relief 96 Fund
DSPML Tax Saver Fund
DWS Tax Saving fund
Fidelity Tax Advantage Fund
HDFC Tax Saver Fund
Lotus India Tax Plan
Principal Personal Tax Saver Fund

If you add, Sundaram Tax Saver Fund, totally there would be 8 funds. You can invest 1500pm in sundaram and 500pm in the other 7 funds.
Review your investment after 2 years.
Best of luck,
Srikanth shankar Matrubai
Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

Thursday, February 5, 2009

Mutual Funds for a Risk Taker

Mr.TABBY wrote ::
hi..i am 27yrs old n totally new to investing...i wld like to have your advice as which mutual funds and sip should i invest,in reference to the following points -
1) i can invest atlest Rs.5000 per month
2) i can invest Rs.20,000 per year
3)i have a long-time horizon
4) i can take risks

SRIKANTH SHANKAR MATRUBAI'S REPLY ::::
Dear Tabby,
For your age and time horizon, 100% equity exposure is warranted. Your risk profile also helps in the matter. With these consideration, I would recommend the following
1000 * 1 in Birla sunlife Equity fund (1000)
1000 * 1 in DWS Investment Opportunity Fund (1000)
500 * 1 in Fidelity International Opportunities fund (500)
500 * 1 in JM contra Fund (500)
500 * 1 in Lotus India Tax Plan (500)
250 * 2 in Relinace Growth fund (500)
250 * 2 in Reliance Natural Resources Fund (500)
500 * 1 in sundaram Select Focus Fund (500)


Take adequate Term Insurance for your security. You can invest your 20000 lumpsum in Debt Fund and then go for an STP into a Large Cap Fund.
Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

I need 6 lakhs in 3 years

Mr.REDDY wrote :
where i need to invest my money for 3 years, i want to buy house after 3 years, i needed money about 6 laks

SRIKANTH SHANKAR MATRUBAI' S REPLY ::::

Dear Reddy,

At 15% returns CAGR, you would need to invest 13338 per month.
At 18% returns CAGR, you would need to invest 12781 per month.
At 21% returns CAGR, you would need to invest 12255 per month.
I hope you have also considered inflation while calculating your cost of house.
regards,
Srikanth Shankar Matrubai



Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

Benefit for child's future

A Guest wrote :
Dear sir,
I have invested equally in the name of my son (age 13) and daughter (age 12) under advise from my broker. They are as follows:

-icicipru child care gift, purchase date may 2004, current market value Rs 248980, monthly sip Rs 1000 running now since jun 2005.

-icici emerging star, purchase date june 2005, current market value Rs 41773, monthly sip Rs 1000 running now since jun 2005.

Please advise what changes are required for the benefit of my childrens\`s future.


SRIKANTH SHANKAR MATRUBAI'S REPLY ::::

Dear Guest,
Kindly stop your sip in both the funds AT ONCE!!!!.
The both the funds have average performance to show, you can do better by investing in Good Diversified Equity Funds. While ICICI Pru Child Care Gift Fund is a Balanced Fund, ICICI emerging Fund is Mid-cap fund. I am sure both the funds would trail Diversified Equity Funds in return over a period of 5-6 years, which seem to be your time horizon.
Invest your monthly 1000 sip in the following funds for maximum returns.
250 * 2 in Reliance Growth Fund (500)
500 * 1 in Fidelity Equity Fund (500)
1000 * 1 in HDFC Top 200 fund (1000)

It would be good if you also switch your existing investment in ICICI Emerging Star to a Good Large Cap fund from the ICICI Stable like ICICI Growth Fund or ICICI Focussed Equity Fund.

Best of luck,
Srikanth Shankar Matrubai.

Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

Loss in existing sip, shall I continue?

Worried, Mr.LiveWire asked
" dear sir ,
I have sips of icici infrastructure fund, reliance equity opp, franklin india opp fund and also lumpsum investments in principal equity &uti infrastructure.plus i want to make new sips & lumpsum investment in mutual fund should i stick on my old mutual funds or can u recommend me some better performing mutual funds , i am also looking to exit from some of my old mutual funds kindly advice as i am having losses in my investment right now"

SRIKANTH SHANKAR MATRUBAI'S REPLY :::
Dear LiveWire,
Unfortunately, all your funds are 'Below Average' Category and are underperformers. You seem to love Infrastructure and overexposed your investments to these funds. Continue in ICICI Infrastructure Fund only if you intend to stay invested for at least 5 years.
Switch out from Reliance Equity Opportunity to Reliance Growth fund
Switch out from Franklin India Opportunity Fund to Franklin Equity Income Fund
Stay invested in Prinicipal Equity for now
Switch from UTI Infra to UTI leadership, as you already have ICICI Infra.

Your portfolio lacks Good Diversified Equity funds as well as Large Cap funds.
Take a look at the following funds and add them as and when possible,
Birla Sunlife Equity Fund
Birla Sunlife Frontline Equtiy Fund
DSPML Top 100 Fund
DWS OPportunity Fund
Fidelity Equity Fund
HDFC Prudence Fund
JM Contra Fund
HSBC Equity Fund
Mirae India Asset Opportunity Fund
Sundaram Select Focus Fund


Kindly invest via Sip and always take advice of well intentioned and well informed persons before commiting your money into any funds. "

Best of luck,
Srikanth shankar Matrubai
Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.