long term investment in mutual funds

POSTED BY Dr.Anitha Suryadevara ON March 20, 2013 12:52 pm COMMENTS (15)

I am planning to invest 25000 Rs per month in mutual funds thro SIP for 15 years. At present I am investing  

1. Axis equity fund : 4000 /month

2. Birla sun life India Gen next : 4000 / month

3. HDFC mid cap oppurtunities: 4000/month

4. DSP BlackRock Top 100: 2500/month

5. Axis long term equity  ( ELSS ) : 3000/month

6. Axis gold fund: 1000/month

IS my choice correct or do i need to make some changes.

I want to add  RS 6500 /month in addition to 18500 /month to this investment .Is it better to add one balanced fund ( I do other debt inv- PF, RD ).

Thank u for vauable suggestions in advance.

Anitha

 

15 replies on this article “long term investment in mutual funds”

  1. Dr.Anitha Suryadevara says:

    Dear Ashal,
    What are the points u take into consideration when taking ( recommending ) a MF . please name 1,2,3 ……. .

    I am not understanding the logic. The 2 funds u mentioned have performed less compared to Axis funds and Birla sunlife gen next for last 3 years and 5 years respectively ( is 5 yr duration not good enough for comparision ) and their ranking declined..

    Guess i am missing some thing here.

    Please let me know the point I am missing.

    Anitha

    1. Ramesh says:

      Check this.

      http://www.morningstar.in/posts/17573/morningstar-awards-2013-hdfc-best-fund-house-for-third-year.aspx

      Go through this year’s awarded funds. Then check those in last 5 years. What do you make of that? Think.

  2. Dear Anitha, thanks for sharing your thought process. My take. Please do not consider you & your husband as 2 different individuals. Collectively the amount belongs to you both (to be invested) & the goals are common then why the funds should not be common?
    Just 2 funds are more than enough betwen both of you.

    Franklin Indian Bluechip Grwoth option

    Quantum Long Term Eq. fund Growth option

    Regarding ELSS, if there is any short fall, please invest the amount between first 3 months of a FY i.e. April to June. the choice of ELSS fund ‘ll be Quantum Tax Saver.

    Thanks

    Ashal

  3. Dr.Anitha Suryadevara says:

    Hai everybody :

    Thezonalview:

    The 6 mutual funds i have mentioned are from 2 portfolio ( me and my husband) I have presented them together. I want to know if they form a good blend or do i need to make some changes.

    Free financial calculators :

    If I take ELSS fund but donot show this for 80 C consideration and after 3 years lock in period of my 36 th SIP can i exit from my fund any time i wanted . please clarify.

    Ashal :

    I am not an expert. I cannot justify the picks but i would like to share my thought process while i was taking these funds, this is only to invite healthy suggestions and to get myself educated.

    Axis equity fund:

    1) Diversified fund mainly inv in banks , software

    2) 3 year good performance , withstood 2011 fall. ( good perform since inception )

    3) Ranking improving consistently

    4) crisil ranked V.Good

    5) I understand this is new fund house ( fund with track of only 3 years ) ,but backed by
    strong financial inst . Axis – I think can be trusted and managers are experienced.

    6 ) Axis long term equity (ELSS ) : this was taken initially for tax saving. It was ranked 1
    when i took and now it continues to be.
    7) axis gold fund : took to have small inv in gold .I have not done much homework on
    this.I will do it now.

    Birla sun life Gen next :

    1) diversified inv most in consumption prod, pharma, banks
    2) good 5 year performance and consistently improved ranking
    3) crisil rank v. good

    DSP BR top 100:

    1) this was taken bec too many recomendations , lot good heard but now i find fund not doind good for last 5 years. I have to rethink

    HDFC mid cap opp:

    1) exposure to mid and small cap to fetch more returns on long term ( inv in large caps 12% ) /// little less risky mode in high risky set up //

    waiting for your opinion
    Thanks
    Anitha

    1. “If I take ELSS fund but do not show this for 80 C consideration and after 3 years lock in period of my 36 th SIP can i exit from my fund any time i wanted . please clarify”

      After 3 years you can redeem only your first SIP installment! Which is why it is a bad idea. The lock-in will be in force whether you use it for 80C or not!

      1. Dr.Anitha Suryadevara says:

        dear FFC, thank u for the clarification. I accept your suggestion of adding balanced fund .I am thinking of ICICI pru balanced or SBI magnum balanced to start and stay inv for > 10 years

        thanks
        Anitha

  4. TheZionView says:

    Why do you need so much funds? while the same can be achieved with a little.

    Figure out the goals and align them as per your wish. I would say keep about 2-3 funds at max

  5. Ramprakash says:

    I am no expert, but will chip in with my 2 cents.
    1. Axis equity fund : 4000 /month STOP. Redeem the units that you have held over 1 year and invest in ur HDFC MF. Follow the same process as and when ur rest of the units cross 1 year holding period.
    2. Birla sun life India Gen next : 4000 / month STOP. Redeem the units that you have held over 1 year and invest in ur DSP MF. Follow the same process as and when ur rest of the units cross 1 year holding period.
    3. HDFC mid cap oppurtunities: 4000/month Continue and increase to 12k if its performance has met ur expectation. Else look for some other MidCap MF.
    4. DSP BlackRock Top 100: 2500/month Continue and increase to 12k if its performance has met ur expectation. Else look for some other LargeCap or Diversified MF.
    5. Axis long term equity ( ELSS ) : 3000/month STOP. Redeem the units that you have held over 3 years and invest in ur DSP MF. Follow the same process as and when ur rest of the units cross 3 year holding period.
    6. Axis gold fund: 1000/month Continue this or STOP and continue in some other Gold Fund
    7. debt inv- PF, RD Continue

  6. Dear Anitha, please justify the selection, on what basis you opted these funds?

    Thanks

    Ashal

  7. Dr.Anitha Suryadevara says:

    Hai Ashal,

    I myself selected may be u asked because there are too many Axis funds ?

    Suggest me if i need to change.

    Anitha

  8. Dear Dr. Anitha, who selected these funds for you? You, yourself or some one else? Please clarify.

    Thanks

    Ashal

  9. Find out the returns given by each of your funds and see if it matches with the expectations of your goal. If they don’t change else stay invested.

    I would suggest getting rid of Birla sun life India Gen next and adding a Balanced fund.

    Dont invest in ELSS via SIPs. It is a pain to get out of it. As long as 80C is only 1 Lakh there is no need for ELSS for people with PF. They can always open a PPF and exhaust the limit.

    1. Dr.Anitha Suryadevara says:

      Thank u, I didnot get this point – Get rid of Birla sunlife gen next – and – to avoid a balanced fund also — or — to add a balanced fund.

      About ELSS yes now i dont need this fund for 80 c am just continuing bec it is performing well.

      1. I meant adding a balanced fund in place of Birla sun life India Gen

        If you dont need it for 80C a ELSS fund is a very bad investment. If its performance dips you cant get out for 3 years.

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