Re-investing funds from under performing mutual fund schemes

POSTED BY Deepesh Damodaran ON October 19, 2012 5:07 pm COMMENTS (10)

Friends,

I want some advice on how to reuse the funds from underperforming Mutual fund schemes.
I have Rs.30K each in following mutual funds. I had stopped the SIP for these funds sometime back and would like to divert the funds.
Reliance Diversified Power Sector Fund
HDFC Core & Satellite Fund
SBI Magnum Contra Fund
Due to my pre-occupation with work, I could not do anything about these funds.
Now I want to move them and reinvest.
I have two options in front of me.
1) Switch the funds to another fund. I have identified following funds to split and invest in one go. I could put all the 90K in 1 fund or couple of funds in one go now.
Reliance Equity Opportunities Fund
Birla Sunlife MNC Fund
HDFC Top200 Fund
UTI Opportunities fund
ICICI Pru Focussed Blue Chip Fund
HDFC Midcap Opportunities

2) Second option before me is to create SIP in any of the above funds and invest Rs.90K over period of time. May be 1K or 2K or 3K per month in 1 or more funds to get benefit of sensex fluctuation.
Which would be the best option?
In either case, request you to advice me on the right funds to invest.

Thanks,
Deepesh

10 replies on this article “Re-investing funds from under performing mutual fund schemes”

  1. Dear Deepesh, You may continue with HDFC Eq. as of now + 1 bluechip. Yes only 2 funds are enough.

    Thanks

    Ashal

  2. Deepesh Damodaran says:

    Dear Ashal,

    So you suggest having only 2 funds as longterm investments irrespective of amount of investment. One is a bluechip (Franklin bluechip or ICICI Bluechip) & other is Quantaum LTE. Bluechip being into Large Caps & Quantum into Small & Mid cap.

    I am currently having HDFC Equity in portfolio which is also Mid cap. You suggest Quantum LTE. over HDFC Equity.

    Regards,
    Deepesh

  3. Deepesh Damodaran says:

    Thank you Ashal for your feedback !

    Regards,
    Deepesh

  4. Dear Deepesh, Please invest in 2 funds only. 1 Bluechip & 1 Quantum Long Term Eq. for all your SIP money. Having 7-10-15 funds is not diversification. Stop SIP in other funds & later on switch into the 2 funds.

    Thanks

    Ashal

  5. Dear Deepesh, by opting 2 bluechips, are you really diversified/ Please check the underlying portfolio of the 2 funds & note the overlapping stocks.

    I w’d prefer only 1 fund out of the 2. As you have invested already the lump sum amount, please opt only 1 fund for fresh SIp amount.

    For future SIP, please add only 1 more fund Quantum long Term Eq. Fund.

    Disclosure – I’m investing my personaly money in the funds discussed above so my view may be baised.

    Thanks

    Ashal

    1. Deepesh Damodaran says:

      Thanks Ashal for your feedback !
      I realized now when I checked the detailed portfolio of these funds in Moneycontrol.

      Regarding my current portfolio, do you suggest continuing the SIP in 7 funds and add Quantum longterm Eq fund?

      Regards,
      Deepesh

  6. Deepesh Damodaran says:

    Thanks Ashal for your feedback as well !
    I had the put the lumpsum money into Franklin blue Chip & ICICI Focused Blue chip fund.

    I need your feedback about consolidating my MF Investments.
    At the moment I have SIP of Rs.1000 in the MF. Beside every fund I have given Moneycontrol’s view of fund performance

    1) HDFC Top 200 fund – Good Performer
    2) HDLF Equity fund – Good Performer
    3) ICICI Prudential Focussed Blue Chip Euiqty Fund – Very Good Performer
    4) DSPBR India Tiger Fund – Very Good Performer
    5) Franklin India bluechip – Very Good Performer
    6) Birla Dividend Yield Plus – Average Performed
    7) ICICI Prudential Discovery Fund – Good Performer

    From June, I plan to add another Rs.3000 per month to MF portfolio.
    Yet to identify which fund to put it.

    Would you recommend consolidating them into fewer funds?
    In that case could you suggest the best option how to consolidate?

    My horizon is atleast 15-20 yrs.
    I do understand it is important to revist the portfolio atleast every 2-3 yrs.

    Regards,
    Deepesh

  7. Dear Deepesh, as the money was already in Eq. Asset clas, there is no benefit for doing SIP. you are merely chaging the funds in between & not investing fresh money, hence lump sum investing should be done.

    Thanks

    Ashal

  8. Deepesh Damodaran says:

    Thank you Manish !

    I will probably put half the money into 2 funds you have mentioned.
    Remaining half, I will use it for SIP. I will create SIP in these funds.

    Regards,
    Deepesh

  9. I think a better idea would be to just sell it off and take 90k and then out the money in ICICI Pru Focussed Blue Chip Fund and HDFC equity or top 200 .

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