Help needed in selecting suitable mutual funds

TracerBullet

Well-Known Member
#2
Hi,

I want to invest Rs.30 Lakhs in mutual fund for my mother, I am googling for better picks, please suggest suitable funds.

Thanks
What is timeframe and risk tolerance? Are you looking for Debt or Equity funds? Will she need to withdraw from this money anytime soon?

1) Dont invest equity portion in one go. Else be mentally ready for drawdowns. Future is never clear, i think in Equity you should always be ready for 10-20-30% drawndowns as a normal thing and 50+% once in a while.

So SIP over 3+ years might be better way to invest. You can put in debt first and then use STP to regularly invest in Equity. You can put some extra whenever Nifty trends down for extended period and then crashes ( Example extended fall in daily timeframe and then some scary looking WRB with lots of negative newsflow and crashes in midcaps)

2) Equity portion should be kept for long term - 5/10/15 years.

3) Have some rough Equity : Debt allocation in your plan and manage it say once a year. Debt helps to smooth out volatility and will give you backup to take out if needed. Can also use it to transfer to Equity on crashes and transfer back to debt if Equity rises a lot.

4) Do try to invest in Equity. Debt alone is not sufficient as inflation will eat returns. Real Returns are much less than interest.

5) Invest Directly. Dont go through Banks/Brokers. Otherwise, You will be paying 10-20k every year to them indirectly and will also miss out on long term returns from it. ( Direct funds have reduced expense - approx 0.5% or more ). Its easy to transact online directly once your account is setup.

6) There are many good funds, i just limit to some fund houses to make it easier to manage. Some decent funds are below, you can select some from them. Look for schemes and fund managers with good long term record.

Equity
1) HDFC Equity
Recent performance is not good and you may want to skip this. But Fund manager has long experience of 2 decades and has delivered before. He has his conviction and is sticking by it which is not paying in short term. I am invested in it and will remain so. Has given me good returns actually ( invested long ago)
2) Franklin Prima Plus / Franklin High Growth
3) BSL Frontline Equity
4) Motilal Oswal MOSt Focused Multicap 35 Fund
Motilal Oswal / Ramdeo Agrawal seems to have a very good reputation of stock picking. ST da recommends them. This is one scheme from them which i will invest later, there are more for large cap / midcap focus
5) HDFC Midcap
6) IDFC Premier Equity
Fund manager changed recently. He is very good and gave super performance with Sundaram and later UTI.

Above are my target funds. But some more options
- PPFAS long term Equity. They invest in International too which might make it less volatile.
- ICICI value discovery
- Mirae has some good Equity funds too.

Debt
Nothing fancy needed here. Just use some ultra short term/Liquid fund to manage withdrawals/STPs. I use Franklin Ultra short term but it has some credit risk and you can use other ones. Look for low expense ratio.

For long term debt, meant to be invested for 3+ years to get indexation benefit some decent options are

1) UTI Dynamic Bond
2) BSL Dynamic Bond
3) HDFC Medium Term Opportunities
These three are enough, dont go for corporate bond funds that take credit risk, esp if they are not locked. They have liquidity issues over short term if there is a crisis in any bond they hold.
 
#5
30 lakhs is not a small amount and if you are investing this amount then you must make sure that the mutual fund you choose for yourself is a well trusted one. So, I would personally suggest you, to go for ICICI Prudential AMC.
 

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