Seek your suggestion

Seek your suggestion
Hi srikant,

Lalitesh here (hope u still remember me ) ...First of all let me wish Belated Merry Christmas and Happy new year in Advance !!!!

I understand that you would be too loaded with work ..but still I seek your kind help (suggestion) regarding the investment I had discussed with you and Aslanshu, because I have registered for the funds and its almost started working.

You might remember the mail I have sent you for the investment
regarding the home down payment which i need after 3 yrs and the fund i need is around 10L (atleast), and as per your valuable suggestion i have enrolled for the below funds :


Port1 (24k)
Amt
Name Date1 Date2 Date3
HDFC T200 N/A N/A 1,000
Sundaram Sel Foc N/A N/A 1,000
DSPMLT100 N/A N/A 1,000
UTI Spread LTP(G)2,000 1000 1000
HSBC MIP -RP(G) 2,000 2000 2000
DSPML Balanced 2,000 1000 2000
Kotal Floater LTP(G)2,000 1000 2000
Investment Amount
:: 24,000/months

Time Horizon
:: 3 yrs

As of now i have selected to invest for next 1 yrs only.

Objective
:: to acheive >10L corpus by next 3 yr.

I had submitted the form of UTI Mahila fund also for 7k/month but as per my agent, it was rejected becuase only females can only invest in this fund. so will be choosing some other fund soon and register for the same . Final plan is to have 31k/month plan.

Could you please suggest me if this portfolio looks fine of it need any modification. Similarly i have created few other portfolio for my future needs but since its still under registration so haven't share the same here.

I'll be seeking your expertise to comment on those portfolio as well, once i send you the details. Finally, can i have your suggestion on my this 24k portfolio.



Regards.

Lalitesh.

SRIKANTH SHANKAR MATRUBAI Replies :
Dear Lalitesh Kumar,
I am happy to see your mail again. And I am particularly more happy
to see that you have not ignored my suggestion and have avoided All your
investment into Debt Fund and have also considered Equity Funds.
You seem to have chosen your funds well, going by the fact that a good number of them have a solid performance track record.
However, I have concern that you seem to have invested just a bit on the higher side in DSPML Balanced Fund. Given the nature of your goal and time limit, you can consider switching to DSPML Savings Plan (Moderate) with a Equity Exposure of 20% (compared to 65% equity exposure in DSPML Balanced Fund).
DSPML Balanced Fund has had a good track record but the current market appreas to continue remain volatile and may not the recent highs in a hurry, and moreover the Debt Funds due to Falling Interest Rates should easily give you upwards of 12% return in next 6-9 months.
Your agent is ignorant. Any person (male or female) can invest in UTI Mahila Fund. Only the name is Mahila. Sure, go ahead and invest. Its small Corpus is 82.46 makes it manageable. The Fund is rated 5 Star by ValueResearch.
Though the Fund has had a bad 2008 with a return of negative 8%, the 3 years return continue to impress at above 20%. And the Fact that the Fund has only 12% in equity and with falling interest rates, the Fund should give you good returns.

Even as recently as Novermber 2008, the Hindu Businessline had given a "Invest" Recommendation on the fund. You can find the same in the link

http://www.thehindubusinessline.com/iw/2008/11/23/stories/2008112350591000.htm
You can also consider investing the additional 7k in UTI Spread itself.

NOTE : AS YOU INTEND TO WITHDRAW WITHIN 1 YEAR, YOU WILL BE CHARGED WITH EXIT LOAD IN SOME SCHEMES, ENQUIRE ABOUT THE SAME BEFORE INVESTING.

Best of luck,
Srikanth shankar Matrubai

See the earlier query by Lalitesh Kumar on

http://goodfundadvisor.blogspot.com/2008/08/10-lakhs-in-3-years.html


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

Student's dilemma on Diversified Funds or Balanced Funds?

Student's dilemma on Diversified Funds or Balanced Funds?
From: Akhil Sharma

Hi! Mr.Advisor

hi.
I'm a student.My age is 23.i love to save my money.it's been a year that i've invested in various equity diversified funds like
ICICI pru infra
Reliiance diversified power

Sundaram capex
Reliance RSF equity
Kotak indo world infra
I've invested Rs.5000 in each of them.As the last year has been bad for the markets...i've lost 50% of my investment.Now i want to invest again but not in diversified as i now want to have different type of funds in my portfolio.

I wanted to know if DSP black rock balanced fund,UTI mahila unit scheme and Reliance banking fund would be a good deal to invest or not and should i go for lumpsum or i should go for SIPs!
Any of your suggestions for me are welcome.

Thank you!
You're doing a great job!.....cheers to ur blog!!
Akhil sharma


SRIKANTH SHANKAR MATRUBAI replied :
Dear Akhil sharma,
First of all, thank you for your kind words on my blog.
You have started your invested at the peak of the Bull Market and hence it is no surprise that your investment value is down by 50%.
Alas, your investment has all been in Infrastructure Funds which only adds to the downswing of your investment value.
Thankfully, I am happy to note that you have not lost your heart and ready to invest again. Yes, as you yourself have admitted, you need to diversify your investment horizon. The funds you have selected for investment are all Balanced Fund. And at your age, you can go for Diversified Funds as these funds typically give you more return than Balanced Funds over a longer periods of time.
you can consider one among the following funds for your future investments.
Birla sunlife Equity fund
Fidelity Equity Fund
HDFC Top 200 fund
Reliance Growth Fund
Sundaram Select Focus Fund.

If you are still considering Balanced funds, you can think of HDFC Prudence Fund which has an excellent Track Record since its inception.
Preferably, go for SIPS.
Best of luck,
Srikanth Shankar Matrubai,
Bangalore

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

BUY GOLD NOW BEFORE IT BECOMES EXPENSIVE
Dear all,
The Global Financial Crises we are witness to today is unprecendented and many Economies, (even Developed ones) are on the brink of an looming impending Recession. In response, Central Banks, with US leading from the front, are pumping in tonnes and tonnes of money by printing more and more Dollars. But the disaster waiting to happen is, that this Oversupply of Paper Currency is not backed by any Real Assets such as Gold. Which means, that the Currency that the US Govt is pumping is only a Paper churned out from Printing Presses.
What this creates is, that Gradually the Confidence in US Dollar will reduce and its VALUE too decrease (Remember Zimbabwe?).


This is where a proxy currency such as "GOLD" holds intrinsic value, since the supply of it is limited and which is not in control of any Central Bank. Gold has a unique characteristic of "storage value", vis-à-vis paper currencies. Paper currencies tend to lose value over a period of time due to inflation (loss of purchasing power) caused by over supply as it leads to a situation where more and more currency is required to buy the same amount of goods.
Another shocker is that the Gold Reserves held by US, UK and other Developed Countries on threshold of depression has fallen considerably. While the ratio of Gold to Currency was 141.2 tonnes to 1bn$ in circulation, now it is ONLY 10.7tonnes to 1bn$ in circulation. This shows that More paper Currency is in circulation backed by Less Gold. To correct this analomy, the US needs to increase its Gold Reserves by MORE than 13 times!!!!
This will only Fasten the process of Falling Confidence and Faith in the US Dollar and hasten the image of Gold as the Saviour to protect over the Long Term.
Citigroup, in a recent report has said that gold will touch US$ 2,000 per ounce. That's 2.5 times the current price of the yellow metal at US$ 800. The firm believes the measures taken to tackle the financial crisis will not stabilise the global economy. Instead they will lead to a painful depression. As per the bank, the financial system has tripped beyond recovery, towards depression. In this scenario, there will be a flight towards gold. In fact, according some reports, China plans to add nearly 6 times its current gold reserves of 600 tonnes in a move away from foreign paper currencies.


With the financial crisis not over yet and the recession looming large, central banks would continue to inject more and more money into the financial system. Thus the debasement of the currencies will continue making Gold more and more attractive as a hedge against the dwindling purchasing power and the loss of faith and confidence in paper currencies.

Gold is seriously undervalued.

Buy gold before it gets expensive.


On where to invest, you can visit http://goodfundadvisor.blogspot.com/2008/12/dspbr-and-aig-world-gold-funds.html
http://goodfundadvisor.blogspot.com/2008/09/buy-gold-now.html
http://goodfundadvisor.blogspot.com/2008/09/is-dspml-world-gold-fund-good-buy.html
Best of luck,
Srikanth Shankar Matrubai

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

DBS CHOLA TAX ADVANTAGE FUND - AVOID

DBS CHOLA TAX ADVANTAGE FUND - AVOID
DBS Chola Mutual Fund has launched DBS Chola Tax Advantage Fund – Series 1. The fund is a 10 - year close ended equity linked
saving scheme, subject to a lock in for a period of three years from date of allotment.

The fund which opened December 19, will close on March 19. The objective of the scheme is to seek to generate long-term capital growth from a diversified portfolio of predominantly equity and equity-related securities and also enabling investors to get income tax rebate as per the prevailing Tax Laws and subject to applicable conditions. The fund, benchmarked against BSE 200 Index would invest between 80- 100% in Indian equities and equity related securities and 0% to 20% in money market instruments / debt securities instruments.

Sanjay Sinha, chief executive officer, DBS Cholamandalam Asset Management said, "this fund will follow 'value investing strategy'. Current market conditions favour this strategy as it limits the downside potential of these stocks. In addition to the tax benefit, a 3 year lock-in allows investors to realise a better potential for their investment."

The minimum amount for application during the new fund offering period will be Rs. 500 and in multiples of Rs. 500 thereafter.

MY TAKE :
Though the Fund House has been in existence for quite some time, it has just been an also ran with none of its schemes ranking among the Top 10. Sure, it has Sanjay Sinha in its rank who joined recently, but he will have a tough job ahead to prove himself in these volative times.
The Fact that your fund is locked in for 10 years also goes against this fund. You are better off by investing in Existing Proven funds rather than Putting in an Unknown Specie yet to prove itself. It is like a Known Devil is Better than an Unknown Angel.
AVOID.

Best of luck,
Srikanth shankar Matrubai
Bangalore

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

Invest in Kotak Short Term bond

Invest in Kotak Short Term bond
I recieved this letter from Kotak AMC and found it very interesting. May be it will be useful to you also. Here goes......
Dear All



“Opportunity does not knock, it presents itself when you beat down the door”. This seems to be the case in the Indian bond markets as well. The flight
for safety factor has led to government securities rally across the world reaching all time lows. The treasury rates across the world – esp developed countries like the US, Japan, UK, EU are so low (practically 0 in some cases) that the investor. The investor looking out for some yield on his/her investment has now started looking out for some quality assets - not as safe as sovereign though high grade assets in the corporate bond segment. US treasuries have rallied from 3.75% to 2% in 6 weeks !!! (currently at 2.17%). Global investors are increasingly buying into the view that in such a financial climate it would be safer to own a companys bond than its shares. BHP Billiton shares were down 5% on a trading day last week, but BHPs bond was trading marginally higher on the same day. With companies deferring dividend payment and preserving cash to pay its debt in time, global money has started chasing yields – albeit in a small manner



In India during the interest rate rally in 2000-2003, spreads between the 5yr corporate bond and 5 yr gsec had touched a low of 30 bps…Likewise for a 3 yr segment, the spreads had touched a low of 15 bps !!!!!



Case for investment in Kotak Bond Short Term



The above factors form the plinth for investment in our Kotak Bond Short Term. The fund is positioned to reap the benefits of carry as well as spread compression in the corporate bond segment of the fixed income market. The current spreads are at 300 bps in the 3 and 5yr segment – which is significantly higher compared to the spreads we witnessed in the previous rate rally. While we do agree that there is general risk aversion in the credit segment – quality credit (combination of PSU and Pvt) does pose a huge investment opportunity. Most PSU are either partly or wholly owned by the Govt of India and therefore quasi sovereign entities. The spreads therefore present an imminent compression theory going forward. While the spreads may not come off in a hurry, in the initial phase, these would act as high carry on the portfolio. Also the 2,3 and 5 yr yield are largely flat (yielding the same). With expectations of reverse repo cut going forward and easy liquidity in the system, this curve could steepen .i.e shorter end could rally at a faster pace than the longer end, leading to a curve steepener.



This is what we endeavor to capture in bond short term, where corporate bonds varying from 2-5 yr maturity is held. The average maturity is capped at 3 yrs, with 25% allocated to cash for trading calls and positioned at the shorter end of the yield curve. This combination makes it ideal for being recommended from a 1 to 3m perspective.



Investors having beyond 3 month horizon should continue to look at investments in long term gilt and bond funds



The top holdings of Kotak Bond Short Term are :- ACC – 9.5%, IDFC – 9.37%, Grasim – 9.28%, REC (Rural Electrification Corporation) - 9.25%, EXIM – 9.16%, IRFC – 9.93%. Current avg maturity is at 2.50 years with a portfolio yield of 9%. The fund is rated mfAAA by ICRA *

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

I WANT RETURN ABOVE SAVINGS RATE......

I WANT RETURN ABOVE SAVINGS RATE.......
One Guest wrote,

want to park some of my money into liquid funds.
Are "ICICI Pru Gilt - Investment Plan - PF Option" and "Canara Robeco Income (G)" are liquid funds? Can I put my money in these funds? I only know that liquid funds are similar to Savings Account but with more % returns.
These above 2 funds have 5 stars in MC and they have given nearly 25-30% return in a year.
some of my other queries regarding liquid funds are as below:
+ What are tax implications on liquid funds?
+ Difference between liquid and liquid plus funds
+ If I have parked my money in liquid plus and due to some emergency I need some money how can I get it? I mean do I have to fill some form to redeem and submit at AMC? And when will I get the money in my hands?
Please help me in this.



SRIKANTH SHANKAR MATRUBAI replied :
Canara Robeco Income (G) fund is a Bond fund & ICICI Pru Gilt - Investment Plan - PF Option is a Gilt fund.
anyone of above fund is not a liquid or liquid plus fund. ur understanding regarding returns of Liquid funds is right.
+ What are tax implications on liquid funds? - Growth option treated as debt fund, so STCG & LTCG r taxed accordingly. Dividend option- div. option in ur hand is tax free but DDT is 28.325%. From taxation point of view, the DDT (div. distribution Tax) is higher in Liquid funds & at the same time due to higher maturity period of underlying securities of Liquid plus funds`, returns r on higher side in Liq. + funds, it make sense to park money in Liquid + funds.
+ Difference between liquid and liquid plus funds - The maturity period of underlying securities is slightly higher in plus funds & also the DDT is 14.15% only in case of plus funds.

U can get money on T+1 day basis. If u have opted direct trasnfer to ur acct. option while investing, the money `ll be credited to ur acct. directly. As there is no entry or Exit load in case of Liq.. & Liq. + funds, it`s better to invest in these funds thru ur online broker acct. - like Icici direct, Sharekhan, Indiabulls, .....


Selection of Growth & Div. option `ll depend upon 2 things -
1. Ur current Tax slab - as in all probability there `ll be STCG on investment in these funds which `ll be added to ur income & `ll be taxed at ur slab rate.
2. Ur time duration - if u r using these funds either to park surplus money for some better earning on ur liquid cash or u r using these funds as transfer vehicle for investing in Eq. funds under STP mode.

In case of Liq. + funds & `ll use for parking of surplus funds as well as emergency funds, the DDT `ll be 14.15% only, so if u r in 20.6% & higher Tax slab it makes sense to invest in Div. option to minimise Tax outgo.

In case u r using it for STP in Eq. funds, it`s better to invest in Growth option for easy calculation of STCG Tax.

The reason to get the nearly 25-30% return in last 1 year was due to the an inverse relationship between interest rate and prices of securities. And this gets reflected in government bonds first, so if the interest rate goes down, the prices of bonds rises and vice-versa.
On any fixed income investment, whether it’s a gilt or a corporate bond or even a fixed deposit in a bank, there are three types of risk. These are credit risk, liquidity risk and interest rate risk. A high credit risk means that a borrower wouldn’t be able to pay back an investment at all. In government securities, this risk is generally considered to be zero. In other types of f ixed income investments, this risk is higher. In any economy, government securities are considered to be of the lowest risk. Therefore Gilt fund has stood as a far safer investment avenue than others.

Gilt funds could be opportune investment for risk adverse investors particularly when interest rates are likely to go down. I think you can expect return between 8-11% on Gilt funds from now.

However, regarding the fund choice to invest, I would prefer
HDFC Income Fund and Birla Income Fund, especially the former. I have gone through the portfolio of the HDFC Income Fund throughly, and I can with some confidence, that the fund could give a return of at least 14% in the coming year inverse relationship between interest rate and prices of securities.
gilt Funds can give you somewhere between 7-9% and
debt funds should give above 12% comfortably.


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

Shall I withdraw FD and invest in Debt fund?

Shall I withdraw FD and invest in Debt fund?
An old Guest, Mr.Ajay Kumar from Hyderabad, wrote again :

Hi Sir! as per ur advice i started two SIP's in HDFC TOP 200 =
1000/mth and Sundaram SELECT FOCUS = 500/mth from october 2008 and
finished 3 SIP installments,also i have a FIXED DEPOSIT of 15000 with
a interest rate 9.75/year = 16462 . as u can see FD is not getting me
huge returns,i want to shift that money in GILT / INCOME / DEBT FUNDS.
The latest news i heard that GILT funds are going to give good reurns
in short term as the interest rates and inflation are slashed down.
so, plz give any advice on my 15000 rupees .thank u

SRIKANTH SHANKAR MATRUBAI replied :
Dear Ajay Kumar,
It is always a pleasure to recieve your mails. I am extremely pleased that you are following my advise and starting investing in HDFC Top 200 and Sundaram Select Focus.
Regarding your FD, yes you are right, you are not getting much returns from the same. You can consider switching the funds to HDFC Income Fund which, considering Falling Interest Rates, easily give you return in excess of 12%. Do invest in this fund with a time period of at least 1 year. Instead of any GILT fund, among Debt/Income Funds, my choice is HDFC Income Fund.
Also, while investing in Income Funds, go for Lumpsum and not via SIPs. I have gone through the portfolio of HDFC income Fund, and it looks quite attractive. Go for it.
Best of luck,
Srikanth Shankar Matrubai,
Bangalore

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

BHARTI AXA TAX ADVANTAGE FUND

BHARTI AXA TAX ADVANTAGE FUND
Yet another NFO, yet another Tax Scheme. The Bharti Axa AMC, which began operations in September 2008, has launched Bharti AXA Tax Advantage Fund, an open-end equity linked savings scheme.

This will be a diversified multi-cap fund. The fund won't be biased towards any sector or market capitalization. It also has a leeway to invest up to 20 per cent in debt and money market instruments.

MY TAKE
The fund house, being a new player, has a long way to go to prove its worth. At this point of time investor's have been extremely choosy about their investments. You can as well look at existing Well Performing Schemes Like Sundaram Tax Saver, Birla Tax Relief 96, etc.

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

JP MORGAN INDIA TAX ADVANTAGE FUND

JP MORGAN INDIA TAX ADVANTAGE FUND
JPMorgan Asset Management India on Thursday launched its open-ended equity linked savings scheme (ELSS) – the JPMorgan India Tax Advantage Fund, which is benchmarked against the BSE 200 Index. The new fund offer opens on 18 December and will close on 16 January 2009.

The scheme is essentially an equity fund with a three-year lock-in period. The investment objective of the scheme is to generate income and long-term capital appreciation from a diversified portfolio of predominantly equity and equity-related securities.

The scheme is eligible for tax deduction under section 80 C of the Income Tax Act.

Minimum initial application costs Rs. 500 per application and in multiples of Rs. 500 thereafter.
The fund is also the first green launch by JPMorgan Asset Management in the country. The attempt will be to minimise the use of paper by encouraging prospective investors to download all applicable literature from the website and print only as per specific requirement so as to ensure minimum wastage of paper.

Said Krishnamurthy Vijayan – CEO & whole-time director, JPMorgan Asset Management, "In a typical NFO, lakhs of application forms and other material is printed & distributed and less than probably 0.5% of them get utilised.

Imagine the number of trees we cut to run just one NFO. We must all become more conscious about this destruction. With this in mind, we decided that the JPMorgan India Tax Advantage Fund would be a green NFO."


MY TAKE :
JP Morgan has a unique way of assigning fund managers to its equity schemes. The AMC assigns four managers to each scheme. And like its previous two equity diversified funds, this fund will have four managers as well.However, looking at its existing schemes performance, this has not really worked well. And the brief history of this equity fund house does not make this new offer a compelling choice as it is difficult to ignore the existing 32 open-end tax saving funds, some of which have impressive track records.

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

IDFC TAX FUND - AVOID

IDFC TAX FUND - AVOID
IDFC AMC which manages assets worth Rs 8,686 crore across 78 schemes (as on 30 November) has launched IDFC Tax Advantage (ELSS) Fund an open-ended equity linked saving scheme. This fund will invest in equity and equity related instruments
The IDFC Tax Advantage (ELSS) Fund with a minimum subscription of Rs. 500, will not only help investors avail of a tax benefit, but also seek to generate long term capital growth from a diversified portfolio of predominantly equity and equity related securities. The scheme will invest in well-managed growth companies that are available at a reasonable value and offer a high return growth potential.
Mr. Naval Bir Kumar, Managing Director, IDFC Mutual Fund says “We are happy to offer The IDFC Tax Advantage (ELSS) Fund to investors who are looking for a tax break as well as an easy and affordable way to take advantage of the growth potential of equity funds.” He continues, "The scheme will invest in well managed growth companies that are available at a reasonable value and offer a high return growth potential to investors,"
Idea distiller: IDFC does not have a tax plan as yet. As the last three months of a financial year see a lot of people rushing to invest in tax-saving schemes, it is an ideal time for IDFC to push an ELSS.
MY TAKE ON IDFC TAX FUND:
IDFC's equity funds have a rather brief history. Invest in this fund only if you want to go in for a low-cost NFO rather than an existing scheme with a higher NAV.
It is better to invest in a fund that has earned enough to reach a high NAV, some of them with compelling track record and a well defined portfolio characteristics and thus ensures dividends for the period that you are locked in, and has a fund manager who has excelled in managing assets across all cycles of the market.
In a nutshell, AVOID


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

Best Funds for A Cautious Investor

Best Funds for A Cautious Investor
ASiingh wrote :
DSPBR T.I.G.E.R. Reg-G - 10%
Kotak 30-G -25%
Magnum Contra-G - 20%
Reliance Growth-G - 20%
Sund. BNP Par. Select Focus Reg-G - 25%

This combination is also Giant/Large cap heavy so is safer. Monthly allocation percentage indicated. What do you feel ?

SRIKANTH SHANKAR MATRUBAI replied :

Dear Asiingh,
Three of the funds chosen by you would not be a good idea for Cautious Investors., namely DSPBR Tiger Fund, Reliance Growth and SBI Magnum Contra fund.
DSPBR is a Infrastructure Sector Oriented Fund and is very volatile and for a cautious investor will not be a very wise investment.
Reliance Growth Fund has had a terrific past and the future too should be good, but the fund is heavily titled towards Mid-caps and I would avoid this fund too.
SBI Magnum Contra Fund has had a good past, but the frequent change in the Fund Manager is starting to tell on the performance of the Fund and also the Fund`s strategy could change anytime from being a Diversified Fund to a Contrarian Fund, for which it was initially conceptualised.

Instead my 3 funds to compliment your other 2 funds would be
HDFC Prudence Fund - A Balanced Fund which has a unmatched past through bull and bear runs.
DSPBR Top 100 Fund - Again a Fund with a Clean Record.
Fidelity Equity Fund - A Go Anywhere Fund with a good record in Bear Markets (for more on this, visit goodfundadvisor dot blogspot dot com)
So, the final selection would be
DSPBR Top 100 Fund
Fidelity Equity Fund
HDFC Prudence Fund
Kotak K30 Fund
Sundaram Select Focus Fund
By the way, I would have a equal propotion of 20% each in these 5 funds.

Best of luck,
Srikanth Shankar Matrubai


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

Can I expect 100% return in 3 years?

Can I expect 100% return in 3 years?
One blogger Mr.Rakesh wrote :
Hi,

i have seen your blog .

i am at 24 now.I am planning to invest in mutual fund rs 2000/month .
But i want it as tax saver which comes under 1 lack .where i can invest
. actually i finalised earlier that sbi magnum tax saver 93 .but after
seeing your comments on it,i want a review on it. Please tell me best
break up and good fund for my 2000/month for long term 3 -5 years.

I am planning to invest in share market about rs 20000 because now the
market is down . I heard that i can get 100% return within 3 years.
Please tell me some stocks which i can hold for long term again 3-5
years.May be after 4 months i may be able to invest another 20000 agian.

Please help.

regards,
Rakesh

SRIKANTH SHANKAR MATRUBAI replied :
Dear Rakesh,
First of all, scale down your return expectation of 100% return within 3 years. It is too ambitious. For you age, you can think of Long Term and can go for Good Diversified Funds which would 9 out of 10 times give you best returns among all the other categories of funds.
But, since you have asked about Tax Funds, I will stick to it. Regarding SBI magnum Tax Gain 93, you can read my detailed analysis on my blog www.goodfundadvisor.blogspot.com. I still feel that the funds corpus is too bloated to give comfort. I feel you better split your 2000 into 4 funds of 500 each. And my shortlist is
Birla Sunlife Tax Saver 96
DWS Tax Saving Fund (additional benefit of Free Life Insurance)
Fidelity Tax Advantage Fund
Sundaram Tax Saver Fund
All the above funds have good track record, except for DWS which has been very volatile, but expectedly so because of its smaller corpus. If you want to stick to only two of the above, I recommend Sundaram and Birla.

Regarding stocks for 3-5 years, my picks would be
Fortis Healthcare
Opto Circuits
Tata Chemicals
BOC India
Indraprasta Gas
Split your investments into the above stocks and keep adding them at every fall. These stocks are not very sexy and exciting and hence you would find very few brokers recommending them, but I have not done quite a lengthy research and have no hesitation in recommending to you too.
Best of luck,
Srikanth Shankar Matrubai,



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

Shall I exit Now?

Shall I exit Now?
I have invested in HDFC Long Term Equity Fund (G), HDFC Prudence Fund (D) , ICICI Pru Infrastructure (D), ICICI Pru Services Industries (D), SBI Blue Chip Fund (D) , Tata Pure Equity Fund (D), UTI Leadership Equity Fund (D), and UTI Wealth Builder Fund (D). Should I exit any of these funds or hold them?
Kajal

SRIKANTH SHANKAR MATRUBAI advises :

Not only you have too many funds in your portfolio but also you have too many Sector funds, that too those funds which have been underpeformer since launch.
Your portfolio needs a major rejig.
Even though HDFC long Term Equity fund and UTI Wealth Builder Fund, I suggest you to switch immediately from the above funds to HDFC Prudence Fund and UTI dividend Yield Fund at once.
You also need to switch from both the ICICI funds you are now holding to ICICI Dynamic fund
You can retain your existing investment in HDFC Prudence, Tata Pure Equity and UTI leadership Funds.
This is not right time to sell. You should instead consider starting a sip in HDFC Prudence Fund and DSPML Equity fund.
These funds should provide you good returns over a period of 2 years.
You can also visit my blog goodfundadvisor.blogspot.com for detailed information and advise.
REgards,
Srikanth shankar Matrubai

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

SIP to continue or NOT

SIP to continue or NOT
Mr.vikas wrote :
Hi there

Got your contact on Good fund Advisor and need your views on my investment thru SIP as below


1. SBI Contra --10000

2. Reliance Growth --10000

3. UTI --10000

4. Reliance Diversified --3000


I have been in this investment since September 08.Would it be advisable to continue with the SIP or withdraw to avoid further losses.The funds overall have lost almost 35-40%.

I am told by various colleagues that we must stop (without encashing) and invest money in a Fixed Deposit.

I do not have a problem of waiting for 2-3 years but need to get a professional guidance on which is a better option to move ahead

Cheers

Vikas Milhoutra

SRIKANTH SHANKAR MATRUBAI advised :

Dear Vikas,
True, you have lost money, but you are not alone, whoever has invested has lost in the Bear market. Your funds seem to be good and there is no reason why you should not continue with the same. You have not given as which fund in UTI, your sip is going. It would have made my job easier.
With your horizon of 2-3 years, these funds should give you returns MORE than Fixed Deposits. Whoever advised you to stop this Sips and invest in FDs need a lesson on how Inflation and Taxes eat away your FD returns. You are better off investing in Mutual Funds through SIPs.
You do have good set of funds (I am counting only 3, as I do not know which UTI fund you have invested in), however, you do need to have a Good Solid Large Cap Fund to compliment your existing portfolio. For this, you can look at
Birla Sunlife Frontline Equity fund
DSP Blackrock Top 100 Fund
HDFC Top 200 fund
Sundaram Select Focus Fund
among others.

Either you add another 10000 monthly to any of the above funds, or reduce your existing sip from 10000 to 5000 in both SBI Contra and Reliance Growth and invest the saved 10000 in the above fund.

Best of luck,
Srikanth Shankar Matrubai

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

UTI Gold-Equity Fund

UTI Gold-Equity Fund
Mr.Sridhar wrote
"sir, I like your blog goodfundadvisor very much. Can you please throw light on the new fund UTI Wealth Builder Fund which has a combination of Gold and Equity"

SRIKANTH SHANKAR MATRUBAI replied :
Dear Sridhar,
UTI-Wealth Builder Fund - Series II, is an open-ended equity oriented scheme. The objective of the Scheme is to achieve long term capital appreciation by investing predominantly in a diversified portfolio of equity and equity related instruments along with investments in Gold ETFs and Debt and Money Market Instruments.
The fund aims to invest about 65% in equities and 35% in Gold ETFs and debt instruments.
This combination of equity, debt and gold is an innovative scheme and looking at the asset allocation and large cap tilt, it should be a conservative offering with low volatility.
Gold has been one asset that has been counter-cyclical in nature and hence an ideal asset in portfolio diversification.
Thus this fund will be a Low risk and Low Return Fund as it be investing mainly in Large Caps.
This Fund is for Ultra Conservative Investor with a view to have slight exposure to Equities. Sure, invest in this fund, if you want to have a Low Risk Low Return Fund. I do not expect this fund to give you returns more than 12% on an average. Even in Super Bull Market, the fund could give a max of 15-18% return.
Instead you can consider investing in Good diversified Equity fund and some allocation to Gold ETfs.
Best of luck,
Srikanth Shankar Matrubai

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

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.

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.