ICICI TARGET RETURNS FUND - INVEST

ICICI Target Return Fund - Invest

Srikanth Shankar Matrubai


A rare NFO, which is good

ICICI has come with a New Fund Offer named ICICI Prudential Target Returns Fund, an Open Ended Diversified Fund. The objective of the Fund is to Generate Capital Appreciation by investing in equity/equity related instruments of BSE100 and, providing investors with options to withdraw their investment automatically based On Triggers as when and when achieved.

The fund offers investors an option to switch out their capital appreciation or entire investment when the fund reaches a particular target, preset at either at 12%, 20%, 50% or 100%. This will help the investor to book his profit and protect any downward fall.

A back testing carried by the AMC shows that a trigger @ 20% moved into even a normal savings account would have given a return of 14.92 on a Rs.10 NAV., whereas not using the trigger would have left your NAV at 10.04 inspite of the NAV having touched a high of 21.
(This Simulation is based on a Value of Rs.10 invested on 01 Jan 2006 till March 2009).

Comments:
This scheme will give comfort to first-time investors, who usually come when markets are at peak and then lose out money when they fall. This scheme will book profits regularly in a discipline manner. Profit booking in a disciplined manner is essential. Investors tend to become greedy when they see appreciation and become fearful during correction and this fund will eliminate such greed. The Trend seen in the last two years clearly shows that a bit of Active approach is essential even in Mutual Fund investments and this Fund addresses this need.

Positives :
1) The Trigger Mechanism will automatically ensure Rebalancing.
2) With Triggers, Returns are locked at regular returns and Value is preserved in the event of a Subsequent fall.
3) The fund intends to invest in Large Caps, which is a comforting factor.
4) The Fund is being launched after the Stock Market have seen a Big Correction and is Attractively Valued, thus the probability of the Fund achieving its 'Targets' is rather high.


Negative:
1) The biggest negative of the Fund is that due the Mandate, the Fund Manager is forced to Sell out Stocks as soon the Stated Target is achieved and may well miss Higher Returns if held.
2) There is no Guarantee that the Fund will meet its 'Trigger Target' if the Markets were to stay Range Bound to Negative.
3) In the Event of a Bull Run similar to 2 years back, than there is a risk of losing the Benefits of compounding Returns.


Recommendation:
The Fund should do well and one can invest going by the Fact that the Fund will be investing in Large Caps and the Markets too look attractive over the Next two years at least. The Fund may not give Huge Gains but does promise to protect your gains in the event of a market crash.

Invest with the Option of 20% Trigger Target and Switch to ICICI Liquid Plan - dividend Reinvestment Option.

One can consider investing in this 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.

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.

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.

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.

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

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.

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.