I have invested in numerous diversified equity funds through SIP. I want to put money in sector funds from Reliance Mutual Fund. These include schemes in sectors such as pharma, banking and power. These funds are doing well over the past five years. Your view?
- Sagar Ramdas
It seems interesting that you have zeroed in on the schemes of just one fund house. Why do you want to invest in a sector fund? It's obvious from your question that you are not considering such a fund because you believe in the fortunes of that sector. You have just looked at the returns and want to get a slice of that cake. Sector funds have their moments in the sun and plenty of times they get battered too. Are you sure that your current equity diversified funds do not have sufficient exposure to those sectors? If you believe in the potential of a sector, take a small exposure to such a fund, say maximum 20 per cent of your equity portfolio. Else, avoid such funds.
I bought Fidelity Tax Advantage in 2007 at around Rs 13 a unit. The three-year lock-in period is over. Should I sell and invest in another fund?
- Abhilash
Going by your question, we are assuming that you do not need the money. If you do not need the money, why would you want to sell your units? Fidelity Tax Advantage is a 5-star rated fund that has performed impressively over the past year. In the past 1 year, the returns are 41.96 per cent and 3-year returns are 16.54 per cent. If you want to put the money or to invest in a fixed return instrument, then go ahead and sell. But since you are considering another fund, you might as well stay put.
I am a first time equity investor and want to start an SIP of Rs 2,000-3,000 in mutual funds. I have shortlisted HDFC Equity, HDFC Top 200, DSPBR Top 100. Your view?
-Andy
Since it appears to be your very first investment, we suggest you start with a balanced fund that has an exposure to equity and debt. DSPBR Balanced, HDFC Prudence and FT India Balanced are three good options. You can divide your savings between any two of them.
I purchased 2,500 units each of JM Agri & Infra and Kotak Indo World Infra during the new fund offer period in December 2007. Both have been bad performers. My investment has been reduced to half. What should I do?
- Manjeet Yadav
First of all, when you invest at one go and not systematically, you become a hostage to market timing. When you invested, it was around the peak of the bull run and the Sensex crossed 20,000 in that period. In 2008, the market began going downhill. By December 2008, it was as low as 8,467. The market has not touched that high yet.
To add to it, you invested in two thematic funds. These are highly risky investments. JM Agri & Infra has done pathetically. You can exit it.
Kotak Indo World Infra invests in infrastructure companies globally, including India. The performance of the fund is improving. You can hold on to it for a while and sell when you make a profit.
Can I purchase a mutual fund online using saving bank account?
- Raj Devanand
Yes you can. However, fund houses will only conduct transactions through certain banks. Go to the website and check the list of permitted banks. Do note that most fund houses do not offer the systematic investment plan (SIP) through this process.
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