Yodlee, Asterix Help meee!!!

[sos]

I intend to start investing in mutual funds & I have shortlisted a few of the schemes.

Please help me in choosing the best & the correct mix from these different categories.

LARGE CAP

1. Franklin India bluechip
2. DSPBR top 100

LARGE AND MID CAP

1. HDFC top 200
2. Fidelity equity
3. BSL frontline equity plan A

MID AND SMALL CAP

1. BSL Div Yield plus
2. ICICI pru dicovery
3. IDFC premr equity
4. Reliance growth

MULTICAP

1. HDFC equity
2. Reliance equity oppurtunities fund
3. Reliance regular savings (equity)


BALANCED

1. HDFC prudence
2. HDFC balanced
3. Reliance regular savings (Balanced)

DEBT FUNDS

1. ICICI pru child care-study
2. HDFC MIP longterm
3. Reliance MIP

 

[asterix24]

Dear SOS,

Your choice of funds are commendable and I presume you have been reading up. Congratulations. My personal strategy is to have

2 Large Cap: DSPBR Top 100, IDFC Imperial Equity
2 Large & Mid Cap: HDFC Top 200, BSL Frontline Equity, Fidelity Equity (all are equally good, but you can go for first 2)
1 Multicap: HDFC Equity, Reliance RSF Equity (Can choose either of them)
1 Mid & Small cap: IDFC Premier Equity (if you can invest into this) or ICICI Pru Discovery
1 Balanced: Reliance RSF Balanced (Choose only if HDFC Top 200 has already been chosen and Reliance RSF Equity hasn't been chosen)

I am not sure why you have quoted a debt fund. But if you do need to invest, I would suggest you to choose between HDFC MIP or Reliance MIP. Both are equally good, but I have observed Reliance MIP to be more aggresive of the 2 and hence, can potentially give you good returns.

Couple of inputs:
- IDFC Premier Equity is closed for subscription last time I checked. If you can invest into this, nothing like it. But if you can't, choose ICICI Pru Discovery.
- HDFC Prudence is a wonderful fund and would be an automatic choice. But since it's portfolio is very similar to HDFC Top 200, I am not suggesting this.

Happy Investing !!

 

[sos]

In large caps, you have suggested IDFC imperial equity over Franklin bluechip.Can you elaborate on the reasons for this?

In large & mid caps, I find that in the last three years fidelity equity has performed better than BSL frontline equity.Should that be a reason enough to prefer it over the other?

In multi caps, it will have to be HDFC equity since RRSF hasn't been a performer in the last 3 years though Reliance equity opportunities has performed well.

In mid & small caps,the only choice out of the ones suggested by you could be ICICI pru discovery (I wasn't aware that IDFC premier equity has been closed for subscription).Any particular reasons why BSL div yield has not been recommended?

For balanced fund, RRSF balanced seems to be the obvious choice.

I guess instead of going for debt funds, it would be better to put the money into FDs at this point of time.

 

[asterix24]

Hi SOS,

My comments embedded below:

In large caps, you have suggested IDFC imperial equity over Franklin bluechip.Can you elaborate on the reasons for this?

Asterix - Franklin India Bluechip is a very old fund and has been one of the most consistent performers, which is one of my foremost criteria to choose this fund as compared to IDFC which is relatively a new fund. However, IDFC is having a good fund management and it's performance in both Imperial Equity and Premier Equity have been commendable and hence, I suggested IDFC Imperial Equity primarily so that one can gain from the excellent management.

In large & mid caps, I find that in the last three years fidelity equity has performed better than BSL frontline equity.Should that be a reason enough to prefer it over the other?

Asterix - Last 3 years would be a good indicator (especially with 2008), but do look for last 5 years. Frankly, Fidelity Equity is as good as BSL Frontline Equity. If you compare the sectoral inclination of Fidelity Equity, BSL Frontline Equity, HDFC Top 200, you can observe that HDFC Top 200 and Fidelity Equity have an almost identical allocation (atleast in top 6 sectors). BSL Frontline Equity has overlap in top 3 sectors, but has a slightly different allocation and hence, to take advantage of this fact, I suggested BSL FL Equity.

In multi caps, it will have to be HDFC equity since RRSF hasn't been a performer in the last 3 years though Reliance equity opportunities has performed well.

Asterix - HDFC Equity is a very old fund as compared to RRSF. However, if you take Qtr-on-Qtr performance (refer: valueresearchonline), both these funds have done almost identically, though at times, you may observe HDFC Equity giving better returns. Hence, I suggested you can consider either of them. However, if you expect me to take a hard pick, go for HDFC Equity.

In mid & small caps,the only choice out of the ones suggested by you could be ICICI pru discovery (I wasn't aware that IDFC premier equity has been closed for subscription).Any particular reasons why BSL div yield has not been recommended?

Asterix - BSL Dividend Yield is also an excellent fund, but since I wanted to suggest only one fund, I gave these 2 funds (I want you to cross-verify my point on IDFC premier equity). Between BSL Div Yield and ICICI Pru Discovery, the latter is highly rated and hence, can be considered for investment.

For balanced fund, RRSF balanced seems to be the obvious choice.

Asterix - Good option.

I guess instead of going for debt funds, it would be better to put the money into FDs at this point of time.

Asterix - your call.

Happy Investing !!

 

[sos]

Hi Asterix,

Thanks a lot for your detailed answers to my queries.

I checked the IDFC website, it does mention that the Premier equity fund is closed for further subscriptions.

 

[yodlee99]

I like all of your funds except 1. ICICI pru child care-study in the DEBT FUNDS. It is not necessarily a bad one, but I have not studied it.
I will leave it upto you to pick the funds from your list. You can pick based on the returns from past 5 years. I would include the ratings of the fund from www.valueresearchonline.com and www.morningstar.co.in. As always with stocks, past performance is NOT an indicator of the future performance, but is the only one available.

 

[sos]

I like all of your funds except 1. ICICI pru child care-study in the DEBT FUNDS. It is not necessarily a bad one, but I have not studied it.

Thanks, Yodlee.

I had checked the last seven years performance on valueresearch & found this to be a consistent performer.

Anyway, now that I am not going in for a debt fund , it doesn't really matter.

 

[sos]

My personal strategy is to have

2 Large Cap: DSPBR Top 100, IDFC Imperial Equity
2 Large & Mid Cap: HDFC Top 200, BSL Frontline Equity, Fidelity Equity (all are equally good, but you can go for first 2)
1 Multicap: HDFC Equity, Reliance RSF Equity (Can choose either of them)
1 Mid & Small cap: IDFC Premier Equity (if you can invest into this) or ICICI Pru Discovery
1 Balanced: Reliance RSF Balanced (Choose only if HDFC Top 200 has already been chosen and Reliance RSF Equity hasn't been chosen)

Hi Asterix,

Considering that I have no dependents as of now, should I be more aggressive & give the balanced fund a pass ? & maybe also restrict myself to only one large cap & invest in some other fund.If you agree, which one would you suggest?

 

[asterix24]

Hi SOS,

I would leave the decision on you. I guess you can invest into HDFC prudence and invest only in BSL FL Equity and Fidelity Equity. This way you are being agressive (HDFC Top 200 has almost identical portfolio to HDFC Prudence) yet have the cushion of Balanced fund.

If you are willing to add another fund, I would suggest BSL Dividend Yield from Mid & Small Cap category which will infuse some more aggression into your portfolio.

Do remember that you need to have the risk appetite and investment horizon for taking this plunge. High exposure to Mid and Small caps is risky, but pays off in long run.

Happy Investing !!

 

[sos]

These are my final picks.Do I need to further bring these down to 4 or 5 funds ?


LARGE CAP

1. IDFC Imperial equity
2. DSPBR top 100

LARGE AND MID CAP

3. HDFC top 200
4. BSL frontline equity plan A

MID AND SMALL CAP

5. ICICI pru dicovery

MULTICAP

6. HDFC equity


BALANCED

7. Reliance regular savings (Balanced)



Also, what percentage should I allocate in these funds considering that I am investing for the long term & would not touch these investments at least for the next 5 years.