I have been investing in the following funds via systematic investment plan (SIP). Your opinion? I have invested in DSPBR TIGER since December 2007. Should I continue the SIP, the performance is not good? If yes, please suggest a substitute?
-Brajesh Shah
| Current funds | SIP amount (Rs) | Equity category |
| Reliance Growth | 3,000 | Mid- & Small-cap |
| BSL Frontline Equity | 2,000 | Large- & Mid-cap |
| HDFC Top 200 | 2,000 | Large- & Mid-cap |
| DSPBR TIGER | 2,000 | Infrastructure |
The three equity diversified schemes you have selected are all good funds. However, there is a strong tilt towards mid-cap stocks in your portfolio, which makes it a little risky and volatile. Are you comfortable with that? If not, then substitute any one of the funds with a large-cap offering such as IDFC Imperial Equity Plan A or DSPBR Top 100 Equity.
DSP BlackRock TIGER is an infrastructure fund. You want to exit because you no longer believe in the infrastructure theme? Or are you simply upset that the fund is not performing? From 2006 till the start of the downturn (January 2008), infrastructure funds did very well. They have been unable to race ahead in the bull rally that began in March 2009. That is simply because non-infrastructure sectors like IT and auto raced ahead. This is exactly how thematic funds work and investors must be willing to ride the highs and lows. If you believe in the theme, hang on. If not, then discontinue your SIP.
However, don't sell your units in DSPBR TIGER right now if you do not need the money. If you want to continue with another infrastructure fund, then consider Canara Robeco Infrastructure, Taurus Infrastructure or ICICI Prudential Infrastructure. If you want to continue with a diversified equity fund, then just stay on with three funds and do an SIP of Rs 3,000 in each of these, which will total your current monthly investment of Rs 9,000.
I want to invest Rs 7,500 a month in three mutual funds via SIP. My time horizon is 5-7 years. Is my selection good? I had invested in HDFC Equity in 2007 but discontinued. Can I continue the same with the old folio number?
-Vidya Bhushan
Yes, you can mention the earlier folio number in your fresh investment. Your fund selection is no doubt very good but we suggest a large-cap fund, too, with lower exposure to mid- and small-cap funds. Also, you need not have two funds from the same fund house.
| Your Selection | ||
| Current funds | SIP amount (Rs ) | Equity category |
| HDFC Top 200 | 3,000 | Large- & Mid-cap |
| Reliance Growth | 2,500 | Mid- & Small-cap |
| HDFC Equity | 2,000 | Multi-cap |
| Our Suggestion | ||
| Current funds | SIP amount (Rs ) | Equity category |
| IDFC Imperial Equity Plan A | 2,000 | Large-cap |
| Canara Robeco Equity Diversified | 2,000 | Large- & Mid-cap |
| HDFC Equity | 2,000 | Multi-cap |
| Reliance Growth | 1,500 | Mid- & Small-cap |
I am 55 years old. My SIP of over a year (Rs 25,000 per month) in HDFC Prudence and Reliance Growth has grown to Rs 4.92 lakh and Rs 5.16 lakh, respectively. This has happened in the past 22 months. I have made a profit of Rs 1.92 lakh and Rs 2.16 lakh in these schemes. Should I book profits closer to Diwali because I may get even more?
-MU Shah
You seem extremely confident of getting even more money later on in the year. On what are you basing your confidence? Are you positive that the market will rise by then?
It is obvious you want to sell your units, now or a few months later. So, we assume you need the money. Then, sell, since you have made a substantial profit. Put the money in a liquid fund or a bank deposit that matures around the time you need the money. There is no telling the state of the stock market by then.
Value Research
