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  • Category: Mutual Funds

    Query about investment in mutual funds for a period of 12-18 months?

    Want to invest in mutual funds? Confused about which are the best funds for investment? On this page, experts shall provide you advice.

    I want to invest around a total of Rs 8 Lacs in open ended mutual funds. I want to keep the money in these funds for around 12-18 months. Below are some of the funds suggested to me by my banker/CA. Can you advise how much to invest in each and if not to invest in any of them at all :
    1. ICICI Value discovery Fund – Mid Cap & Small Cap Fund
    2. UTI Mid Cap Fund – Mid Cap Fund
    3. L&T India Special Situation Fund- Multicap Fund
    4. SBI Magnum Blue Chip Fund – Large Cap Fund
    5. Reliance Top 200 Fund – Large Cap Fund
    Awaiting advice.
  • #137686
    First of all understand why do we invest in mutual funds?
    It is because we want to reduce our risk part by investing directly in equity market and an expert fund manager will manage our fund, which reduces our risk part on our investment amount.
    Now we need to choose the funds.
    As your time frame is 12-18 month.
    As on date 27-07-2016. Indian stock market is around life time high so it is obvious all mutual funds NAV are at high price.
    So if you invest one time method you might not make good profit.
    But as you want to invest 8lakh one time, I will not explain about the SIP benefits.
    You need to invest your 30% amount in equity related funds ( Reliance top-200 and SBI magnum), another 30% in small cap and mid cap and rest 40% is purely in debt fund.
    So that if market gets consolidated you can save your 40% fund and minimal loss in other investment, and if market goes more up then you can get good return on your investment.

    I would like to add some good funds but you check with your banker
    1- Birla Front Line equity fund
    2-HDFC Mid cap opportunity fund
    3- Mirae asset India opportunity fund

  • #137689
    The effect of mutual fund investment is more in long term. Then the spread and exposure to wider mix can give a compensatory effect even if a few of the mix do not yield much or make loss. In short term there may not be much space and time to adjust to the variations and get the positive effects.

    However you may choose a Fund which has more exposure to call money market and short term debt funds. The fund should also have exposure to some stable and steady scrips also.

    Otherwise even if you invest for a short term, your outlook horizon should be long term at least for half of the investment.
    From the given list,
    Hence one half you can divide and invest in SBI Magnum & Reliance 200. The rest you can divide into ICICI value discovery. and UTI mid cap & small cap funds
    Please do a little home work and se how much these MF s are doing.(You may search for some short term or medium term funds under equity, diversified and debt, where you may find some more suitable funds for your needs and time frame)
    If they are not giving more than 10 percent absolute for last one or two years, then it is better to invest in bank FDs and good company FDs directly as they are less susceptible to fluctuations and your capital will not erode.

  • #137706
    The period of 12-18 months is very short. And in such case it'd be best option for you to invest into the liquid funds instead. Because equity and debt both require a lot of time period in order to perform your portfolio better. For short term 1 year term or 18 months period, you can invest into following -

    1. FD
    2. Liquid fund
    3. ELSS funds
    4. Tax saver or income funds
    5. Pradhan mantri pension yojna.

    These are some of the option that you can invest into. That way you would not have to worry about market performance and also the returns are going to be steady. Do note that the performance of the equity and debt for less than 3 years cant be good at all unless you are really lucky. So I suggest you to avoid equity, debt and mid term funds.

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