Thursday, February 5, 2009

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.


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.

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