Funda for re-aligning portfolio?

#1
Hi

Is there any special rules for redemption of a particular fund and putting the exact amount in another fund?

I mean I am in process of trimming my portfolio to few funds. All the funds which I want to redeem has completed one year. The funds I want to exit is SBI Magnum Contra, DSP Tiger and Birla Tax relief 96 (3 lock period getting over on 21st of next month). Just want to transfer the amounts lying in these funds to other funds.

My query is do I need to take care of something before I do this or simply redeem and re-invest in other funds? May be redemption will take 2-3 days. So the impact remains only to the extent of the market fluctuation in these 2-3 days right? Or something more..

Please advise.

Regards

Jeet
 

yodlee99

Active Member
#2
Just like you invest in SIPs, you can redeem over a period of few days or even few weeks in order to get a better overall price. The only exception to this thumb rule would be when you need the funds for some emergency and cannot wait.
 
#3
Thank you so much for your valuable advise. Regards. Jeet

Just like you invest in SIPs, you can redeem over a period of few days or even few weeks in order to get a better overall price. The only exception to this thumb rule would be when you need the funds for some emergency and cannot wait.
 
#4
You can either sell all of them and park the funds in a liquid fund and then do a SIP from there or start a SWP and SIP for the same amount.
 
#5
Ok, thank you for your valuable suggestions.

Are there any tax implications or extra charges by doing SWP or switching to liquid funds and then doing SIP please?

Also, I recently started investment in Reliance MIP and HDFC MIP Long Term. I know they are not pure liquid funds and 18-20% are invested in equities. But would it be fair enough to transfer into these funds.

Investing about 50K in each of the above MIPs at one go will have a large impact or negligible please? Dont want to start SIP in small amounts for these funds and cash sitting idle in savings account is being eaten away slowly in form of expenses, just want to book it MIPs .. Pls advise..

Regards

Jeet

You can either sell all of them and park the funds in a liquid fund and then do a SIP from there or start a SWP and SIP for the same amount.
 

yodlee99

Active Member
#6
Investing in one-go at MIP, liquid or debt funds is fine. Set up a weekly or monthly STP into well-managed & equity diversified funds within the same fund house. For eg, from Reliance MIP into Rel Reg savings equity or Rel growth. Likewise, setup STP from HDFC MIP fund into HDFC Top 200 or Prudence.
Sep up STP on diff dates & go for growth.
 
#7
Thank you so much, now something is going in my head. You have been truly helpful.

Just wanted to know if I first invest 50K in MIP and start STP to diversified funds as suggested, would it not mean that I am redeemping the MIP fund in less than an year? So short time capital gain is applicable right? May be this is negligible difference overall.. These will be automatically adjusted by MF houses or I have to keep personal track record and deduct them at the time of filing returns? Thanks


Investing in one-go at MIP, liquid or debt funds is fine. Set up a weekly or monthly STP into well-managed & equity diversified funds within the same fund house. For eg, from Reliance MIP into Rel Reg savings equity or Rel growth. Likewise, setup STP from HDFC MIP fund into HDFC Top 200 or Prudence.
Sep up STP on diff dates & go for growth.
 

yodlee99

Active Member
#8
The whole idea is to make a little better returns than what u get otherwise in a bank savings account. Only thing u have to remember is the exit load in some of the liquid funds. Check VROL for this info.