which mutual fund

POSTED BY wise man ON November 19, 2011 2:03 pm COMMENTS (10)

hi guys
been reading this blog a lot for a month now.
just recently woken up to the value of money and investing.
I am thinking of putting atleast 40k a month in two mutual fund for next five to seven year.
but not sure which two funds?
a lot of people here has suggested hdfc but didnot mention any particular hdfc fund.
there areheaps of choices in hdfc mutuals,so which one of them.
am looking for long term gain and so able to take big risk .
thanks

10 replies on this article “which mutual fund”

  1. wise man says:

    Thanks guys

  2. Dear Wise man, as you are a NRI, please opt following 2 funds as your starting point.

    1. HDFC Top 200

    2. Quantum long term Eq.

    Thanks

    Ashal

  3. TheZionView says:

    Wise decision Wise man

    I hope you have Emergency Fund in place. Then Term insurance for risk coverage,Health insurance in place for you.

    You have asked for two mutual funds. Let me try to get you just 2 funds and also ensure your are well diversified.

    You can consider below two funds in equal or 60-40 ration of you money

    1. Franklin India Bluechip (Large Cap Fund )
    Reason: Excellent and long track record and more important excellent downside protection with comparatively low expense ratio)

    2. Quantum Long Term Equity (Multi Cap)
    Reason: Multi cap fund gives you good diversification . Very good track record and principal based investing. Good downside protection and Lowest Expense ratio)

    I hope you have a EPF .if not you might want to consider PPF as debt instrument in your portfolio. Gold can be included if you have thing for it.

  4. Abhishek says:

    Hi Wise Man,

    Great to hear that you have thought about investing per month for the next 5-7 years. Considering your long investment horizon and attractive valuations of Equity asset class, you should invest in the following 4 funds:
    a) Franklin India Bluechip Fund
    b) HDFC Top 200 Fund
    c) Fidelity Equity Fund
    d) IDFC Premier Equity Fund

    Happy Investing !

    Regards
    Abhishek

    1. wise man says:

      Also I have been told cant invest in franklin as am NRI.
      Thats alsp reason I dont have EPF /PPF .
      Any other than franklin u suggest?
      thanks

  5. Wise man – That is an excellent decision. By reading this blog and other discussions I am sure you have made provisions for an emergency fund, taken term plan, health insurance, critical care insurance and the like and ALSO paid off any high costloans like car loan, personal loan and credit cards. Regardless of your existing debt instruments I also urge you to maximize your PPF every year. Beyond that, here is my recommendation:

    1) HDFC Top 200 (Better long term returns than HDFC equity) -18000 per month
    2) HDFC Balanced (Better long term returns than HDFC Prudence)- 12000 per month
    3) Reliance Banking Fund (No market recovery will happen without financials leading the way + the other way round as well) – 4000 per month
    4) Reliance Pharma fund (Pharma is defensive) – 3000 per month
    5) Gold ETFs ( 1 unit every month) – 3000 per month

    Even the amount of 18000 and 12000 be better divided into 2 or 3 parts every month (4 SIPs of 3000 each, for example). Again, instead of a SIP do a STP. At the beginning of every month move the 37,000 (leaving the 3000 for Gold ETF) to a short term debt fund and do a STP. The returns will be marginally higher than your savings account but you have to ‘justgrowyourmoney’ whenever and wherever possible!

    1. Venkatesh says:

      I agree with Ur response. Good advice!

    2. wise man says:

      thanks
      I am confused with the STP?
      And why investing each week is better than each month like u suggested

      1. wiseman – Let me address STP and weekly SIP.

        STP: In a SIP your money will lie in your Bank account and the SIP executed on each defined date. Instead you move the entire 40k at the beginning of each month to a short term debt fund and instead of SIP you do a STP (Systematic Transfer Plan) to the schemes. This way you can get more than savings account returns in the short term debt fund.

        Weekly SIP: It is kind of overdoing a monthly SIP. Instead of pushing 20,000 every month you can do a monthly SIP of 5000 some 4 times each month (Say 1,8,15,22 of each month). This can marginally increase the returns and helps average out even more. You may counter that a Daily SIP (DIP) will further increase returns as you are trying to average out even more. True but it becomes an accounting nightmare. Weekly SIPs on 2-3 schemes is definitely tolerable.

  6. moneysights.com says:

    hi wise man,

    Its great that you feel the need to invest. Mutual Funds are always the best way to start with.

    i represent moneysights.com & you can consider investing in the following portfolio in equal allocation (i.e. Rs. 10,000 in each) –
    1. HDFC Prudence
    2. Birla Sun Life 95
    3. ICICI Prudential Focused Bluechip &
    4. IDFC Sterling

    i would also recommend you using moneysights Non-tax Investment Planner so that you actually understand the reasons behind why the above funds are good [here is the link – https://www.moneysights.com/tax-planning/non-tax-saving-recommendation%5D.

    If you intend to take bigger risks, you can choose a value between 8 to 10 for risk profile & get a well-diversified Mutual Fund portfolio. You can also choose to invest right from moneysights by opening an Investment Account without any charges.

    Should you have any questions, feel free to email us on hello@moneysights.com.

    Santosh Navlani | moneysights | making investing simple

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