Need advise on fund selection.

[ninamdar]

Hello,

I am investing in the mutual funds for the first time. I am an NRI and I want to invest lump sump amount of Rs 5 Lakh in MFs over next 3 months. I have shortlisted following 5 mutual funds:

1. Tata Equity PE
2. HDFC Top 200
3. Birla Sun Life Mid Cap Plan A
4. DSPBR Equity
5. Reliance Growth

I plan to invest 1 Lakh in each for a period of 3 to 5 years. Please advise me on my selection. Should I add more mutual funds? Since I have lump sump amount available I am not thinking of SIP. But let me know if you guys think otherwise.


Thanks,
Niranjan

 

[Tarunt]

Hey

I was doing analysis few days back and pulled out some funds performance- Looked at Diversified Equity funds. Just sharing you their performance. Look at sheet 5 in below attachment. There are more than 250 schemes but my bet would be on HDFC Equity or HDFC Growth fund. Its a consistent performer for last 5 years. There are few mores..just look at annualised returns of diff funds.

take a look at it and decide your investment objective, i mean you would like to take more exposure to equity funds or you want to invest in balanced funds etc.

 

[milind]

Lumpsum is never a good idea. Imagine doing that in Q4 2007 - you may or may not have recovered your initial investment by now. I don't think road is clear for continuation of uptrend yet - especially after a sharp rise in '09. Rising interest rates, removal of stimulus, higher inflation and other events can result in some speed bumps.

You can keep money in liquid or short-term debt and do SIP.

As for selection of funds - except for top 200, all the rest seem midcap. Keep good fraction of money in largecaps and a smaller one in midcap. Value research is a good site to refer to.

-- Milind

Hello,

I am investing in the mutual funds for the first time. I am an NRI and I want to invest lump sump amount of Rs 5 Lakh in MFs over next 3 months. I have shortlisted following 5 mutual funds:

1. Tata Equity PE
2. HDFC Top 200
3. Birla Sun Life Mid Cap Plan A
4. DSPBR Equity
5. Reliance Growth

I plan to invest 1 Lakh in each for a period of 3 to 5 years. Please advise me on my selection. Should I add more mutual funds? Since I have lump sump amount available I am not thinking of SIP. But let me know if you guys think otherwise.


Thanks,
Niranjan

 

[saivenkatraman]

First of all, Investing at one shot is not a very good idea. None can predict the market. If you await a fall to invest and if the market goes up, you would have missed the best time. If you expect an increase in the market and if it goes down, then you would be at a loss. Hence, instead of predicting markets, you can take the advantage of the volatility by entering into markets at different levels.

Investing 5 lacs into mutual funds is a good idea. Regarding the funds that you have chosen, you may look at other AMCs than Tata Mutual Funds, even though the past performance may have attracted you. There are many other AMCs which are really very stronger than Tata.

You may consider this strategy for parking your 5 lacs in mutual funds.
Invest Rs. 2000 per week in each of these funds through SIP.
HDFC Top 200(G)
DSP BR Top 100 Equity(G)
Birla SL Front Line Equity (G)
DSP BR Equity(G)
Sundaram BNPP Select Midcap(G)

By this strategy, you will be investing Rs. 10000 per week. So, by the end of one year, your 5 lacs will be deployed into mutual funds. Then, you may hold your investments for atleast 3 to 5 years to get benefit out of it.

 

[ks2009]

Investing in Mutual funds is safe..compared to investing in equity - since the fund manager takes care of your money, doing analysis, entry and exit, etc. Also as many ppl informed in this forum, investing in one shot is not that good but a Systematic Investment Plan (SIP). consider investing some amount regularly over a period of time (say monthly for a year or so).

Coming down to the selection of funds pls consider the following :

1. Scheme assets (the total amount invested in a particular fund) should be at least Rs.250 crore
2. Minimum 3 years should be passed from the date of inception of the particular fund
3. First short list based on the above then do the following :
4. Compare the return.
5. Funds giving constant good returns should be selected.
6. Then within the selection decide whether you are going for any sectoral fund or diversified equity plan. Sectoral funds have high risk compared to diversified.
7. Review your funds' performance every month along with its peers.
8. If the fund is underperforming compared to the peers, better switch-over to good fund - but this should be done after thorough analysis.

Hope the above gives some guidance in selection of funds. Please note that past return is not a guarantee for future performance but it will give the strength of the fund.

Please consider the following funds also:

Birla Sunlife Midcap Fund - Plan (A) Growth
Sundaram S.M.I.L.E. fund (Growth)
Reliance Regular Savings Fund - Equity Growth
ICICI Pru Discovery Fund (Growth).

Good luck and happy investing...!!!

Kalyan

 

[chotachetan]

Mutual fund is better option compare to there funds available.As there is diversification, which tend to spread your investment over many stocks. Many more than you could possibly buy as an individual.It also provides tax benefits, if you approach a reliable and professional company like UTI.

 

[lokesh1212]

My experience has been very good with

Reliance Regular Savings Fund - Growth
Icici prudential - Discovery Fund - growth

and been very bad with HDFC top 200 fund. this seems to be an overhyped fund.