investing huge corpus in MF...

[kdnl]

DEAR MEMBERS,
iam 30 Yrs of age with 3 dependents (wife and kids). i
have 3-5 lakhs of money got out of A property sale. i wanna know in which funds, i should invest this LUMPSUM amount FOR 1-2 YEARS and recieve interest monthly/quarterly??
i want capital appreciation without any damage to the CAPITAL SUM
pls help me out.
my friend suggested FMP/MIP ? WHICH FUNDS ARE THE BEST BET IN THESE CATEGORIES?... PLS DO NOT SUGGEST ME BANK FD/POMIS AS I HAVE DEPOSITS THERE.
PLS GIVE ME A CLEAR VIEW AS IAM NEW TO MF INVESTMENT.

THANKING U ALL IN ANTICIPATION......

 

[asterix24]

Hi Friend,

I would suggest you to park your funds into a Liquid fund for now and then invoke a STP to equity funds. Lumpsum investments can work in either ways, but in my case, have worked in the south direction.

FMP - Fixed Maturity Plan in other words, equity based FD without any indicative returns.

MIP - Very good option, can consider HDFC MIP Longterm, Reliance MIP. However, NAVs would have gone up because of the stock market crash. You can consider investing lumpsum now if stock market dives further. However, I would suggest you to consider STP to equity based funds.

Let us know if you wish to invest into equity based funds. If so, we can provide you with some suggestions.

Happy Investing !!

 

[kdnl]

thanx...asterix..pls suggest meplans for investment into equity funds through STP...

 

[asterix24]

Dear Friend,

Please find a suggested portfolio for investment into equity funds.

Large Cap IDFC Imperial Equity
Large Cap DSPBR Top 100
Large and Mid cap HDFC Top 200
Large and Mid cap Fidelity Equity
Multicap HDFC Equity
Mid & Small Cap ICICI Pru Discovery
Balanced Reliance RSF Balanced

However, I would also suggest you to park some funds into a MIP like HDFC MIP Long term or Reliance MIP.

Happy Investing !!

 

[rajeshn2007]

DEAR MEMBERS,

i want capital appreciation without any damage to the CAPITAL SUM
pls help me out.

Hi,
you want capital appreciation without damage to the capital, then you cannot invest in mutual funds.
avoid FMPs.
in MIPs there is possibility of lesser returns than bank deposits, since some of the money will be invested in equities.
So, obviously you have to be satisfied with bank fds. ( the rates are heading higher), now 9.5%.

if you can take some risk, invest in hdfc top 200 through SIP.

 

[milind]

Hi,
you want capital appreciation without damage to the capital, then you cannot invest in mutual funds.
avoid FMPs.
in MIPs there is possibility of lesser returns than bank deposits, since some of the money will be invested in equities.
So, obviously you have to be satisfied with bank fds. ( the rates are heading higher), now 9.5%.

if you can take some risk, invest in hdfc top 200 through SIP.

If you want zero risk - FDs in most secure banks (e.g. SBI) is the only way. Please remember to divide your net worth by an inflation index to see what your money is really worth - If you are earning only 8% or so, and pay taxes, you are losing money in the real sense after factoring in the inflation.

Ignoring inflation/taxes: Say your horizon is 3 years, and you have Rs1000 to invest, and going low-risk FD rate is 8% compounded quarterly. You can invest Rs 788 in the FD, which will mature as Rs1000 after 3 years. Your principle is safe. Invest the remaining Rs212 in a good equity fund - whatever you earn on it, is your investment return.

-- Milind

 

[asterix24]

BTW, if you are serious of investing into a FD, you can consider investing into FDs now as most of the banks are giving some good interest rates (north of 9%). If you are willing to take a slight amount of risk, you can consider Shriram Transport Finance FDs which give an approx. return of 13.34% p.a. for a 5 year deposit. They have very good credit rating and have a good reputation.

Happy Investing !!

 

[hchandra111]

DEAR MEMBERS,
iam 30 Yrs of age with 3 dependents (wife and kids). i
have 3-5 lakhs of money got out of A property sale. i wanna know in which funds, i should invest this LUMPSUM amount FOR 1-2 YEARS and recieve interest monthly/quarterly??
i want capital appreciation without any damage to the CAPITAL SUM
pls help me out.
my friend suggested FMP/MIP ? WHICH FUNDS ARE THE BEST BET IN THESE CATEGORIES?... PLS DO NOT SUGGEST ME BANK FD/POMIS AS I HAVE DEPOSITS THERE.
PLS GIVE ME A CLEAR VIEW AS IAM NEW TO MF INVESTMENT.

THANKING U ALL IN ANTICIPATION......

@kdnl - let us get few things straight

1. Monthly interest isn't something you can get from a mutual fund. In fact, it will be a folly to think that even Monthly Income Plans actually can give you monthly income.
2. Do rethink if you really need that interest coming to your bank account. Will 300-500 rupees really matter to you every month for the next 2 to 3 years?
3. From a safety point of view, no mutual fund can guarantee capital. But the nearest you can get to is by looking at good quality portfolios in the fixed income space.
4. Currently, you can look at any FMP from DSP BlackRock / Franklin Templeton AMC that can take you through the desired period that you want to stay invested.
5. They will work better than an FD primarily due to taxation benefits.
6. On how to action it - do visit http://www.dspblackrock.com/downloads/downloads.asp or http://www.franklintempletonindia.com/
7. To enlighten yourself further on what FMPs mean to you as an investment do read the following link http://www.fundsupermart.co.in/main/research/viewHTML.tpl?articleNo=511
Happy informed investing...

 

[ris]

BTW, if you are serious of investing into a FD, you can consider investing into FDs now as most of the banks are giving some good interest rates (north of 9%).

I agree.

But i would suggest you to wait as banks would be further raising the deposit rates w.e.f. from tomorrow.A few though have raised it from today itself.

BTW Asterix, do you invest in these private companies FDs? I am slightly wary of these after my money got stuck in Lloyds finance FD.Though I did finally receive my principal amount but lost interest for all those years it remained stuck.

 

[asterix24]

Hi Ris,

I do invest in company FDs, but only those with reputation. Let me explain a wee bit about my logic of investing with Company FDs and FDs in co-operative banks as compared to Public-Sector/Private-Sector Banks.

As with equities v/s debt, higher risk gives higher rewards. With this basic fundamental, one can potentially consider investing into FDs in co-operative banks, as typically they are couple of percentage points above other banks. More importantly, they are covered under the RBI's capital guarantee scheme of 1 Lakh and hence, it's as safe/insecure as any other bank.

Coming to corporate FDs, there are multiple companies offering different rates of interest. However, I do read up about them, compare the ratings from FITCH, CARE and other organizations. Most of these entities are listed on stock exchange and I analyze the company in the same way as I would, if I am investing into their stock.

I have invested a nominal amount in Unitech FD, but have a substantial amount in Shriram Transport Finance's Unnati scheme. They are currently offering 13.39% (i feel absolutely fantastic percentage) for 5 year deposits. If one has some spare cash and is willing to park for sometime, they can consider this.

Another area where one can invest is NCD. I have invested in Shriram Transport Finance's NCD as well as L & T. They offer pretty competitive rates and the best is their liquidity. You can sell them at your convenience on stock exchange and remove cash based on your need.

Happy Investing !!