Mutual Funds Investment Advice

#1
Hi. I am planning to start investing in mutual funds now. I am a beginner and young(28). I plan on doing investments as a lump sum and SIP. I plan to invest 5 lakhs via lump sum now and SIP of 20k per month for next 3 years starting this month. I plan to diversify my investments across multiple types of funds by taking moderate risk.

Lumpsum Strategy: Invest 50% across hybrid funds (Kotak Dynamic Bond Fund, Tata Balanced Advantage FUnd) and expect a return of 10-12% over a horizon of 1.5 years. And invest the rest in midcap/smallcap equity funds which have portfolio investments in FMCG, Oil,Aviation and Gold related mutual funds, expecting returns of around 15-17% annualized over a horizon of 3 to 4 years.

SIP Strategy: Play safe by investing in big funds which have portfolios comprising of big, stable companies. Invest in large cap equity funds (Axis Focused 25, Axis bluechip fund, ICICI Prudential Value Discovery fund) over a horizon of 3 years and expect returns of minimum 10-12% annualized.

Please comment on my strategy and any suggestions on which funds (& sectors to focus on) to be invested in for lumpsum and SIP based on the returns I am expecting, would be highly appreciated.
 

Subhadip

Well-Known Member
#2
Hi. I am planning to start investing in mutual funds now. I am a beginner and young(28). I plan on doing investments as a lump sum and SIP. I plan to invest 5 lakhs via lump sum now and SIP of 20k per month for next 3 years starting this month. I plan to diversify my investments across multiple types of funds by taking moderate risk.

Lumpsum Strategy: Invest 50% across hybrid funds (Kotak Dynamic Bond Fund, Tata Balanced Advantage FUnd) and expect a return of 10-12% over a horizon of 1.5 years. And invest the rest in midcap/smallcap equity funds which have portfolio investments in FMCG, Oil,Aviation and Gold related mutual funds, expecting returns of around 15-17% annualized over a horizon of 3 to 4 years.

SIP Strategy: Play safe by investing in big funds which have portfolios comprising of big, stable companies. Invest in large cap equity funds (Axis Focused 25, Axis bluechip fund, ICICI Prudential Value Discovery fund) over a horizon of 3 years and expect returns of minimum 10-12% annualized.

Please comment on my strategy and any suggestions on which funds (& sectors to focus on) to be invested in for lumpsum and SIP based on the returns I am expecting, would be highly appreciated.
Nice strategy.

Some modification as per my view:
1. donot invest lumsum 5 L now.... divide it into 1:1:1:1:1; then invest in per 20 days or per 15 days. Fully in Equity
2. SIP is also to be divided to 2 or 3 parts in a month
3. do not expect get return from bond as per u r expectation
4. No midcap or Smallcap.... rather NIFTYBEES & JUNIORBEES.... or select 10 or 15 stocks, invest in them
5. Hospitality & Aviation will not give much return..be careful
 
#3
@Subhadip
Thanks for your reply. What is your opinion on gold funds or gold ETF's in the short term ?
To expect returns of above 20% over a period of 5 years (to 7) via lumpsum/SIP, what type of equity funds (and sectors) would be ideal to look at ? Or should I look at other types of mutual funds to expect these kinds of returns over a long term?
 

siddhant4u

Well-Unknown Member
#4
Increase your time horizon. You are young, you should look for 10-15 year in future.

GOLD doesn't give much return, but does beat inflation. So you could invest one part in GOLDBEES (it's a ETF) just like NiftyBees and JuniorBees. (suggested by subhadip above)

Also, don't invest in Bond funds, focus on Equity for longer period. If you need funds in 1-3 years, better book a FD in national bank.

Axis bluechip is good fund. Whichever fund you chose check portfolio on what kind of industry they are invested in.
 

travi

Well-Known Member
#5
Bhai, don't rush in gold.
It has different curve than equity.
Let ppl start moving from gold to Eq then enter that cycle.
With a big time horizon, let ur lumpsum also take is time.

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#6
Hi Guys. I have come up with the following list of funds (value, pharma, ethical, small cap) after discussions with my advisor. They are:

ICICI Prudential Value Discovery Fund
DSP Small Cap Fund
Tata India Pharma & Healthcare Fund
Tata Ethical Fund
Axis Focused 25 Fund
ICICI Prudential MNC Fund

Amongst these, I will shortlist 4 to 5 funds for lumpsum investment over a horizon of 30 years and will do the fund switching whenever needed based on factors like growth rate being achieved or nonperformance, etc. My portfolio being planned is 75-80% in Multicap funds and 20-25% in SmallCap funds (DSP small cap).

Request you to provide your inputs.
 

Subhadip

Well-Known Member
#7
Hi Guys. I have come up with the following list of funds (value, pharma, ethical, small cap) after discussions with my advisor. They are:

ICICI Prudential Value Discovery Fund
DSP Small Cap Fund
Tata India Pharma & Healthcare Fund
Tata Ethical Fund
Axis Focused 25 Fund
ICICI Prudential MNC Fund

Amongst these, I will shortlist 4 to 5 funds for lumpsum investment over a horizon of 30 years and will do the fund switching whenever needed based on factors like growth rate being achieved or nonperformance, etc. My portfolio being planned is 75-80% in Multicap funds and 20-25% in SmallCap funds (DSP small cap).

Request you to provide your inputs.
not liking ur fund selection .....

already given solution in my previous post..


use DIRECT MUTUAL FUND ONLY..
 

siddhant4u

Well-Unknown Member
#8
Hi Guys. I have come up with the following list of funds (value, pharma, ethical, small cap) after discussions with my advisor. They are:

ICICI Prudential Value Discovery Fund
DSP Small Cap Fund
Tata India Pharma & Healthcare Fund
Tata Ethical Fund
Axis Focused 25 Fund
ICICI Prudential MNC Fund

Amongst these, I will shortlist 4 to 5 funds for lumpsum investment over a horizon of 30 years and will do the fund switching whenever needed based on factors like growth rate being achieved or nonperformance, etc. My portfolio being planned is 75-80% in Multicap funds and 20-25% in SmallCap funds (DSP small cap).

Request you to provide your inputs.
Are you buying through advisor? so don't go for the list he advised you. Go for small caps only if you see Nifty Small Cap rising else they are crashing since last 2 years. Stick to Large cap or Large+Mid cap option. They will give good return after market bottoms out.

As Subhadip suggested, go for 'direct funds' option you get 0.25 to 0.5% extra each year as AMCs don't have to pay commission on them to financial advisors or banks/brokers.
 
#9
Are you buying through advisor? so don't go for the list he advised you. Go for small caps only if you see Nifty Small Cap rising else they are crashing since last 2 years. Stick to Large cap or Large+Mid cap option. They will give good return after market bottoms out.

As Subhadip suggested, go for 'direct funds' option you get 0.25 to 0.5% extra each year as AMCs don't have to pay commission on them to financial advisors or banks/brokers.
Was planning to buy through my bank. Was advised by the investment advisor in the bank. Is it very difficult to get good returns through small cap, even over a longer horizon ?
 
#10
not liking ur fund selection .....

already given solution in my previous post..


use DIRECT MUTUAL FUND ONLY..
As you suggested, I'm planning to go with all equity based funds (for better returns) and so came up with this list and will split the lumpsum into 5 parts. I'm looking into the options of juniorbees and niftybees as well instead of small cap. What are the advantages of these over small cap in the very long horizon (More than 10-15 years).

For, SIP investments, I am still working out the list.
 

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