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

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