SBI MF should i transfer or redeem and invest in other MF

POSTED BY Kunal Kumar Sharma ON December 31, 2012 3:35 pm COMMENTS (3)

Hello Manish,

I want your help to swtich my current investment in below funds to some better MF’s

SBI BlueChip Fund(G) : Current Amount : 15K
SBI Magnum Global Fund 94(G): Curent Amount : 29K

In starting i had SIP’s in these MFs, due to my old agent, but later on after understanding MF investment a bit more through your blog 🙂 . I stoped the SIP in these MF’s. And started the new SIP’s (Rs. 1000/- in each) in below MF’s

HDFC Top 200 Fund(G)
Canara Robeco Eq Diversified Fund(G)
Reliance Reg Savings Fund-Equity Plan(G)
HDFC TaxSaver(G)
L&T Tax Advt Fund(G)

I want to swtich my SBI MF amount to Some other MF

Should I use the STP to swtich to “SBI Magnum Emerging Businesses Fund(G)”, Is it a good fund to invest for next 10 yrs?
Should I withraw the amount and Invest in lets say “HDFC Top 200”?
What will be the tax implications if I withdraw the amount?

What should be the good option for me STP or withdraw?

My main aim here is to invest for long term (min 10-15 yr)

Please let me know if you need more information

Kunal Sharma

3 replies on this article “SBI MF should i transfer or redeem and invest in other MF”

  1. Kunal Kumar Sharma says:

    Thanks for Your Quick reply,

    I stopped investing in both of my SBI MF’s so all SIP installments are 1 yr old, So in this case i can redeem complete amount and invest in HDFC 200.

  2. In an equity SIP each SIP if redeemed after one year is tax free. So you dont need to pay taxes on all SIP installments made one year ago for others you need to pay 15% on capital gains. So for those you need to find out how much each sip has appreciated.

    So when you make a switch you could first switch installments a year old over about 3-6 months and them switch the others when they get > 1 year. This would be better than lumpsum withdrawal. Easier to do this within the same fund house.

    No one can tell you if a fund will be good for 10 years. All we can look at is past performance and SBI emerging business has a terrific record recently but its a bit high on expense ratio and is quite a risky fund. So you must be prepared for that.

    For second option in the SBI family you could consider SBI Magnum Equity-G a large cap fund which will more stable and easy to switch within the same fund house.

    For 10-15 year horizon it is advisable to have 60%-70% large-cap exposure and 30-40% mid-cap exposure. I think your are reasonably close to this. But please check each funds portfolio individually
    Dont do SIPs in tax saving funds. Each SIP will mature after 3 years and if the fund performs badly the portfolio will suffer. You could stop them and increase your exposure to HDFC top 200.

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