I am a 30-year old professional. My goal for investment is the marriage of my daughter (currently eight years old). Please advise on how to reach my goal. For the past one year, I have been investing in all these funds through SIPs.
Fund Amt (Rs)
Reliance Regular
Savings Equity 500
Reliance Natural
Resources Retail 500
IDFC Enterprises
Equity Plan A 5,000*
Franklin Templeton India
Income Fund Equity 500
JM Contra500
AIG World Gold Fund 1,000
DSPBR Top 100 500
Birla Sun Life Frontline Equity 500
ICICI Prudential Focused
Equity Retail 500
Sundaram BNP Parib
as Select Focus Fund 500 Sundaram BNP Paribas Select Paribas Mid Cap 500* One-time
You are currently investing Rs 5,500 in 10 funds via systematic investment plan (SIP). Rather than doing this, why don't you limit your investment to just 2-3 schemes? This will make your portfolio a lot more manageable. Invest in two plain equity diversified funds (like Birla Sun Life Frontline Equity, DSPBR Top 100, HDFC Top 200) and one aggressive fund (like Reliance Regular Savings Equity, Sundaram BNP Paribas Select Focus, Sundaram BNP Paribas Select Midcap). As you come nearer to your goal, replace one of the equity funds with a debt fund and increase your debt allocation steadily.
I am holding 10,000 units of Sundaram BNP Paribas Energy Opportunities Fund and 6,000 units of Tata Indo Global Infrastructure Fund, both from their NFO launch. Do I need to redeem/switchover these funds?
-Babu
Both Sundaram BNP Paribas Energy Opportunities (launched in December 2007) and Tata Indo Global Infrastructure (launched in October 2007) are thematic, closed-ended funds.
Investments in thematic funds should only corner a small allocation of your portfolio and never be core holdings. Also, we do not generally advocate closed-end funds. That is because one can only invest during the New Fund Offer (NFO) period. So, there's no track record. Secondly, the exit load on closed-end funds are generally high, if you want to redeem before maturity. If you do not need the money, hold on or you will pay a hefty exit load.
My father wants to invest in a fund that will give him assured dividend/interest, with low risk. Can you advise on such a fund/ instrument?
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-Sudhanshu
Mutual funds do not come with assured return or zero risk tag. For low risk, you may invest in debt funds like Fortis Flexi Debt or JM Money Manager Super. If you can bear a little more risk, then you may also opt for Monthly Income Funds, which provide monthly dividend plans. However, monthly dividend is not assured here, too, as it will depend on the discretion of the fund house. If you want assured and risk-free return, go for fixed deposits (FDs).
I would like to invest in gold via an SIP. Please name some schemes.
-Ved Prakash
Fund houses like Benchmark, Kotak, Quantum, Reliance, SBI and UTI offer gold exchange traded funds (ETFs). Such schemes directly invest in physical gold. They are listed on the major stock exchanges and you can buy and sell them just as you do with shares. None of them offer systematic investment plans (SIPs).
AIG World Gold and DSPBR World Gold invest in international funds that buy into stocks of gold mining companies. Both offer an SIP option.
Value Research