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  • Suggestions about mutual funds

    Planning to invest in mutual funds but confused about which is the best one? Looking out for detailed comparison of various mutual funds? Here, on this page our ISC experts shall provide you with financial advice.

    We need immediate suggestions for investment.
    Background: My family consist of 5 members including parents and 3 daughters. All three are unmarried and my parents will cross 60 years of age in next 2 years and doesn't keep well. We belong to middle class background. My father and elder sister works in private sector.
    My parents will be needing funds for their further life and want to invest in mutual funds. We can invest up to 1 lakh in next 5 years Rs 20000 or 30000 per year.
    I have listed the following mutual funds for your opinion.

    1) L&T Emerging Business Direct Growth :
    { Rs.10000 Lumpsum for 3 years}

    2) MIRAE Asset Emerging Blue Chip fund growth direct : { Rs. 10000 Lumpsum for 3 years }

    3) HDFC Small Cap fund direct growth :
    {Rs. 5000 Lumpsum for 3 years }

    4) Kotak Standard Multicap direct growth fund { Rs 5000 Lumpsum for 5 years }

    5) Principal Dividend Yield Fund direct growth { Rs 10000 for 5 years }

    6) HDFC Balanced Advantaged Fund Direct Plan - Dividend Monthly { SIP or Lumpsum for Rs 12000 for 5 years }

    7) HDFC Top 100 dividend Direct plan : { Rs 10000 Lumpsum for 5 years }

    8) Franklin India Short term Income plan direct dividend monthly {Lumpsum for 5 years Rs 5000 }

    9) HDFC Equity Savings Direct Plan : { Rs 10000 for 5 years}

    Please correct the time period or mode.
  • Answers

    5 Answers found.
  • As per your plan, you can invest 30,000/- maximum per year for the next 5 years.
    For the first year, you can invest 30,000/-. Now this money can be invested in the following way HDFC Small Cap fund direct growth :
    1) Kotak Standard Multicap direct growth fund { Rs 10,000 Lumpsum for 3 years }
    2) Principal Dividend Yield Fund direct growth { Rs 10000 for 3 years }
    3) HDFC Balanced Advantaged Fund-Direct Plan - Dividend Monthly { Lumpsum for Rs 10000 for 3 years }.

    You can study the performance of these and after one year you can decide on the investment for that year.
    Whatever monthly you will save can be credited in a Recurring deposit account for 12 months. The total money from RD can be withdrawn after 12 months and then you can invest in any of the best mutual funds which are doing well at that time.

    always confident

  • Mutual Fund investment requires a prudent thinking and planning for investing the money in them. First and foremost thing that we have to understand is that mutual funds invest their corpus in the share market and bonds/ debt instruments available in the market. So the success of the mutual funds solely depends on the return from these avenues. If due to some adverse reason there is a slump in the share market then naturally the mutual funds may look down in resonance to the share markets except for the portion invested in the debt instruments as there is low but sustained return there.

    Generally, the horizon of mutual fund investment is a long period as the real benefits are derived in a long run. In short periods some times the gain might be handsome but it could be in reverse also. So it is generally advisable to go long in mutual fund investment.

    There are many schemes of HDFC, ICICI, Principal, Birla etc which are doing good in the market. While selecting these schemes we have to take care that we should go for different schemes. For example some schemes could be equity oriented while others might be more inclined to debt or bonds. The former are riskier while latter are not so riskier but have a low return.

    It will be prudent to choose a few equity oriented schemes and a few debt oriented. In addition I will recommend to take some ELSS and tax savings scheme also as they have their other advantages. So a prudent investor believes in not putting his all the eggs in one basket.

    Share markets are prone to rare but occasional disasters and one has to put only a part of ones investible corpus here and rest should be invested in bank FDs, Post Office schemes, non taxable Govt bonds etc.

    Some of the good MF schemes are -

    1. HDFC Balanced Advanced Growth.
    2. Mirae Asset India Equity Fund Regular Growth.
    3. SBI Small Cap Fund Regular Plan Growth.
    4. Canara Robeco Emerging Equities Growth.
    5. Axis Long Term Equity Growth.
    6. Principal Hybrid Equity Fund Growth.

    Knowledge is power.

  • Mutual - funds have been introduced by the different financial institutions for the benifit of the common investors offering them a reasonable return in a certain specified interval. In fact, the fund is operated by a set of managers known as fund - managers and their sole responsibility is to invest the money in the different portfolios to maximise the profit. They take every care to assess the past performance of the different companies, it's track - records and its financial status etc. Hence most of the mutual funds operating in the markets are relatively safe but still there are leading mutual funds such as HDFC, ICICI, CAN Bank Mutual Fund, Sundaram Finances , SBI etc having shown impressive performance in the different funds.
    The investors would do better if they could review the positions with some established consultants having substantial exposure in the share markets and the mutual funds. This would help the investors in understanding the current and future scenarios of the markets.
    You have to choose your investments wisely with different funds such as equity, Balanced - funds, Debt - funds of different mutual funds of different time - horizons so that the best returns are possible.
    Tax - saving schemes of Can - Bank and SBI are ideal in view of saving taxes with such funds and you may add them in your basket.
    Some of best funds offering you best returns in the mutual - funds are as follows -
    1) ICICI Prudential Equity fund,
    2) HDFC Balanced Fund
    3) Equity liked funds of SBI or HDFC.
    4) Axis Long Term Equity funds
    5) SBI Regular Plan Growth etc.

  • As your father is going to retire in three years from the private sector and your parents are not keeping well, they will definitely need fund after retirement for the monthly expenses and for their future medical expenses. Under these circumstances, I would very strongly advise you not to invest in equity funds, especially small-cap fund and so-called emerging blue-chip fund.

    I am really sorry to say that your planning is faulty and very risky. Please delete at least two risky funds (for example: HDFC Small Cap fund direct growth and Kotak Standard Multicap direct growth fund) from your proposed portfolio and chose two debt funds like Franklin India Ultra-Short Bond Super Inst Direct-Growth and HDFC Banking and PSU Debt Direct-Growth.

    I would also suggest you meet an investment advisor and build a portfolio with professional advise keeping in view your requirements. Your proposed portfolio is not suitable for the age of your parents.

    Partha: Wear Your Personality Like A Crown

  • The amount of funds that you have are too many for the lumpsum price. I'd recommend the following portfolio with 30K amount for 5 years. This way the exit load and the percentage of return would be decent ratio.

    My recommendation on portfolio would be.

    1st year. MIRAE Asset Emerging Blue Chip fund growth direct (5 years) at 30,000 Rs.
    2nd year. L&T Emerging Business Direct Growth (5 years) at 30,000 Rs.
    3rd year. Franklin India Ultra-Short Bond Super Inst Direct-Growth (5 years) at 30,000 Rs.
    1st year. AXIS liquid fund (1 year) at 10,000 Rs.

    Here you can see I have started with the balanced approach. And added the liquid fund component so that you have instant cash option in case of emergency.

    Mix and match the fund years and see what suits your scenario as I can't make personal recommendation that suits your situation. So see which one of the above funds in what order be helpful to you.

    Few things to consider.

    1. If your age is under 60, take all the risk you can with the equity. In case of father crossing his age 60, I'd recommend him to keep the funds into the debt and short term debt funds.
    2. Use the equity funds only if your age is between 20 to 60. Otherwise avoid equity and mid cap exposure.

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