Wednesday, 27 January 2010

Mutual Funds Q&A

1)I am planning rs 1000 each in three funds every month as part of SIP.I chose Sundaram BNP Paribas smile,Release Regular savings tax equity,Magnum Contra, HDFC Top 200 and UTI Opportunites Fund. Please help me choose which three out of these are better?

Sundaram BNP smile and Reliance regular savings equity funds are performing with 5 star rating.These two invest more in midcap funds.Don't invest in two midcap funds in your portfolio.So, choose one of these two midcap funds.To select the other two schemes, HDFC top 200 and UTI has 5 star and Magnum contra has four start rating.Choose any one of these with high ratings.

2)I have been investing in SBI Magnum tax gain since 2006.Recently 3 years lockin period term was over.Should i continue or to quit ?

Magnum tax gain has four star rating.In 2009, it returned a profit of 96.5 %.Last five years , it returned a profit of 32%.This scheme is a diversified equity that invests in variety of sectors.If your portfolio already has equity funds you can withdraw this scheme.Or,you can continue depending on your risk bearing capability.

3)I would like to go for a 10 year SIP with the following portfolio.Am i right in investing rs 14000 in these schemes everymonth?
HDFC TOP 200 3000
DSP BR TOP 100 equity 3000
Magnum Contra 2000
HDFC prudence 2000
ICICI prudencial Infra 2000
IDFC Premier equity 2000

All the above listed funds are performing well in the market.But, better invest in four funds at a time in your portfolio to easily manager your funds.Choose one of these large cap funds HDFC TOP 200 or DSP BR TOP 100. Then, balance your folio with a mid cap fund i.e IDFC premier equity. HDFC Prudence invests in Equity as well as debt.Instead of this go for a complete debt fund i.e Fortes flexi debt fund. Stay away from Magnum Contra and invest in Infrastructure ( Energy, cement, Industrial manufacturing,metal etc..) fund i.e ICICI prudential Infrastructure Thematic fund.So, choose four schemes and divide your 14000 among those as follows.

HDFC TOP 200/ DSP BR TOP 100 - 3500
IDFC Premier Equity - 3500
ICICI Prudential Infra - 3500
Fortes Flexi debt fund - 3500

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