Guidance on MF

POSTED BY Samir N ON June 20, 2012 4:27 pm COMMENTS (6)

Hi Manish,

Good morning, can you help me with the below 2 queries please:-

1) My wife & I save about 75K per month after expenses and paying off 100L term insurance premium of 4200 per month. I do not have any MF presence (about 1L stocks from my DIY project). I want to start SIP for long term and also buy 2nd house. I’m thinking of below breakup of my 75K p.m.

1) 2nd House EMI – 50K
2) SIP in following MFs: 25K

Large cap:
ICICI Prudential Focused Bluechip Equity Fund (G) = 5000 /-

Small & Mid cap:
SBI Magnum Emerging Businesses Fund (G) = 2500/-
HDFC Mid-Cap Opportunities Fund (G) = 2500

Diversified equity:
UTI MNC Fund (G) = 5000/-
Tata Contra Fund (G) = 5000/-

Debt Short Term:
HDFC Mid-Cap Opportunities Fund (G) = 2000/-

Debit: Gold ETF
GS Gold BeES = 3000 /-

———————–
Is this selection good ?

Thanks,
Sam

6 replies on this article “Guidance on MF”

  1. Samir N says:

    @Ashal – I dont want to put too much money into this, but if there can be other online cheaper plans that can fetch me 2C cover for lesser, I will check them out. Thanks.

    @Ramesh – OK. Franklin Bluechip + DSP Equity sounds good combination. 10K in each.

  2. Ramesh says:

    Selecting ill-defined capitalisations (what is large and what is large-mid cap) and getting the 5 star funds is not the best approach, since star business is just quantitative and very fickle.

    Start with only 2 funds – I would reco DSP Equity (almost a perfect fund) and HDFC Top 200 / Quantum Long Term Equity. Or flip it- DSP Top 100 and HDFC Equity.

    Or even Franklin Bluechip + DSP Equity.

    Then over a period of time, increase your knowledge and then analyse things. Then change / add if you require more.

    Take help/cue from the portfolio of Quantum Equity-FoF (for selecting some of the top funds).

    Ramesh

  3. Samir N says:

    @Ramesh – I am keen to create a portfolio for long term investment, something that I have been procrastinating so far, but realize that it has to be done asap. So taking tips from internet, I selected a mixture of MF categories purely for diversification. Are they good selection ?

    @Ashal – It is Amulya Jeevan from LIC for 100L. Yes it probably is not sufficient to cover both salaries combined but I am fine with it. I dont want to increase my exposure more in it.

    The income I’ll earn via my MF will most probably will be utilized for kids education or marriage. I have my own house to stay, but want to buy second home that will generate income via rent – sort of pension arrangement for my post retirement (I’m in IT so I’ll not have any pension via my job).

    Thanks both of you.
    Sam

    1. Dear Samir, Your term cover is just 1C, planning to go for another home loan of around 50L & still you are comfortable with your term cover?

      4200*12 = 50400 Rs.

      Please check for online term covers. You can have a 2C cover & still there ‘ll be some money left in your pocket against this very costly cover.

      May I know the rental yield of your 2nd house?

      Thanks

      Ashal

  4. Dear Samir, Instead of answering your query, May i Know more details of your term plan? @ 4200 Rs. mly, it’s too costly, at least I feel so. Keeping in mind that you people are saving close to 75K Rs. mly, it indicates a healthy salary for both of you & then my fear is your term cover is not adequate.

    Please clarify.

    Thanks

    Ashal

  5. Ramesh says:

    If you can explain the purpose of all these funds in your portfolio, then it will be easier to judge whether they are good or not. And it will help you in future to change them according to your circumstances and performance of the funds individually.

    Ramesh

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