Funds to Redeem, Any contrary view???

POSTED BY Rajendran ON December 5, 2010 8:11 pm COMMENTS (9)

All,

   I am planning to redeem the following funds from my MF portfolio. I have decided to redeem them because their performance are not mostly at par with their category funds. Any one of you have any contrary view, which I might have overlooked, on these funds.

1) SBI MAGNUM TAX GAIN
2) SBI Magnum Contra
3) Sundaram capax oppurtunity
4) SUNDARAM TAX SAVER
5) BIRAL SUNLIFE TAX RELIEF 96

Thanks in advance for your time and effort.

9 replies on this article “Funds to Redeem, Any contrary view???”

  1. Rajendran says:

    I have redeemed all the above mentioned 6 funds. Actually other than the above 6 I have also redeemed

    ICICI tax plan
    Franklyn Tax shield

    I am sitting on heavy cash now. What do u think would be a appropriate point to enter the MF now. Is it ok to enter now when nifty is at 6100

  2. Ramesh Mangal says:

    Redeeming a fund, my criteria-
    1. If I need money.
    2. If I think the “present category” of the particular fund is not good for my portfolio / goal (whether long term or short term).
    3. If I feel a fund is not performing well, I would not put more money into it. But if I feel the fund manager is convinced about the prospects of his selected stocks (he is not churning them very aggressively), I would put more money in a underperforming fund.

    I do not change / churn from one category fund to another, because of performance. And I do not enter a new fund just because it has performed well.

  3. Rajendran says:

    @Ramesh…
    Though I have already redeemed 3 of 6 funds I have provided above. This conversation is getting interesting now..

    Now please let us know on what basis you would redeem a mutual fund? and lets debate on that so that at least it would be helpful for others who would look at redeem in future.

  4. Ramesh Mangal says:

    @Rajendran,
    Your funda of redeeming funds who have slipped in their ratings from VR or MStar is a very very bad idea!
    The concept of alpha, beta as risk-measurement is not correct. These statistics are only based on past data and have NO future predictive value. Therefore, these should not be used at all, whether applied to stocks or funds.
    Any fund which has got a 5 star rating today is bound to get a 4 star in future!! At the top, there is only one way to go – Down.

    See this article also.

    http://timesofindia.indiatimes.com/business/india-business/Constant-churning-wont-maximize-returns/articleshow/7050807.cms

    Ramesh

  5. Anand says:

    Personally, I am going to redeem the first 2 MFs listed above (taxgain & contra0 from my investments.

    I am very frustrated with Magnum Taxgain; want to get rid of it asap.

  6. Rajendran says:

    Manish,

    I used the Value Research online site, in that I can see the fund performance against its category on a week, month, year, 3 year, 5 year… and this fund is underperforming for most the time. Thast why decided to redeem it.
    Alpha for magnum taxgain is -.87 and Beta is .96 (Very Average)

    @Siva,
    Yeah I am aware of the 3 year lock in period, these funds are all invested in 2007.

    Funda I used to select the fund to redeem is:

    Any fund which doesn’t have either 4 or 5 star rating in either Value Research or Morning start is selected to redeem.

  7. Siva - Fundsindia IFA says:

    Hi Rajendran,

    In case of the Tax saving ELSS funds there is a 3 Years lock-in period. So, you can’t redeem before three years. Always 1 / or 2 % returns will vary fund to fund. To my experience both SBI Magnum Tax Gain and Sundaram Tax are good. Btw where are you comparing the performance details. Bcz I see Moneycontrol and Valueresearchonline will show different list of best performing funds.

  8. Rajendran

    What time frame have you looked at them ? If its very less like 5-6 months, then you cant judge them ! .

    I would personally go with SBI magnum tax gain !

    Manish

  9. Rajendran says:

    Please include Reliance Tax Saver to the above list
    1) SBI MAGNUM TAX GAIN
    2) SBI Magnum Contra
    3) Sundaram capax oppurtunity
    4) SUNDARAM TAX SAVER
    5) BIRAL SUNLIFE TAX RELIEF 96
    6) Reliance Tax Saver

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