Which MFs can get you maximum returns

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Which MFs can get you maximum returns

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November 16, 2007 09:11 IST
Do things like mutual funds baffle you? Are you aware of the investment options they provide? What are the best mutual funds available in the market? Which funds accrue maximum profits? What are the crieria for evaluating a fund?

Which funds provide the best SIP options? Are SIPs the easy way of making quick bucks? When and how should one buy mutual funds?

To get answers to your queries, speak to mutual fund expert Rahul Goel on November 15 at 1 pm.

Rahul Goel says, Good afternoon! Welcome to the financial planning discussion!

arun asked, Hi Rahul I have package of 5.5lacs how i can save my tax
Rahul Goel answers, at 2007-11-15 12:55:03arun, hi. well there are several things you can do. apart from ensuring that your salary is structured well, you can under section 80C invest rs 100,000 in designated investment schemes; the tax beenfit on this rs 100,000 will be equivalent to your marginal rate of tax. so if you are taxed at 30%, you will save rs 30,000 in tax! there are ofcourse other tax saving options as well. Best is to consult your CA on this.

arun asked, At this moment will it be good option to invest in Tax saving mutual funds? Tell me the name of some gud fund.
Rahul Goel answers, hi. you need to invest in tax saving funds for a need you have i.e. save tax. and this you need to do before 31st march 2008. so in that sense you have little option with regards to when to invest. best would be to put in 25% at a time, in four installments, over this period. go in for funds like hdfc taxsaver and franklin taxshield. but remember, you can achieve a lot more with the money you invest under section 80C than just saving tax. your finanical planner should be able to guide you on this.

jatin asked, Hi there, I has invested 48000 in sip and got around 19% return during past year. Want to invest more, around 80000. Is it the correct time to do so?
Rahul Goel answers, jatin, hi. you should evaluate the performance over a 3-yr period. if you can average a return of 15% pa, that would be great! in terms of investing a lump sum in present times, it may be wise to split the money into 4 installments and invest it over the next couple of months. this will average out your cost of investment. but it is important that you put the money in the schemes which are best suited to you.

mike asked, Hello Rahul. I find both hdfc equity and hdfc top 200 to be good. Please advise on what basis I must select any of these funds.
Rahul Goel answers, mike, hi. indeed both these funds are very well managed and have great track record. between the two, hdfc equity is a more aggressive fund if you will and its portolio is a lot more concentrated. hdfc top 200 has a more diversified portfolio. invest in the scheme which suits your appetite best. but own it in the right allocation in your portfolio.

Vishal asked, Hi RAHUL..could you pls advise whats the best way or strategy to decide for a retirement plan?
Rahul Goel answers, vihal, hi. making a retirement plan is not really a very difficult exercise. if you are clear in terms of where you stand financially and where you want to be in the future, then the entire process should not take more than a couple of hours. but you will need the help of an honest financial planner. maybe if you can write in to info@personalfn.com with your contact details i can have one of my colleagues at personalfn meet you and do this exercise for you.

vimal asked, I hv invested 1.5 lakhs in Unit linked insurance scheme..I understood that it is a big money that i hv commited to insurance policy. How can i come out from this mess? The policy that i hold are hdfc youngster plan and SUn birla cash flow
Rahul Goel answers, vimal, hi. it is unlikely that you can come out from this. and even if you do come out, it will be at a very heavy price. best is to pay the minimum number of permiums and then let the policy fund itself. by the way you should question the agent who sold you the policies that it appears you did not want in the first place.

Rubina asked, Hello, I have to invest in Bajaj Alliance Insurance Co. Company policy is as, You have to invest total 3 years Rs. 36,000(Rs. 12000 /- per year). After 15 years you have to get Rs. 10.00 Lac. It is safety to invest. Awaiting your reply.
Rahul Goel answers, rubina, hi. if you are investing then you shoudl have opted for instruments like mutual funds. and if you wanted insurance, you could have gone in for a term plan. a ulip is a combination of the two. ulips if not seleted well can prove to be very expensive over the long term.

mahi asked, hi rahul, please guide me on short term investments. I have around 50,000 in hand and I have to pay for the college fee. Before paying I wish to invest in the market and at the time of dead line will pay the. That's why please suggest me the best short term investiment shares for fornight or month
Rahul Goel answers, mahi, hi. if you wish to invest for the short term, and that too 30 days or less, it is best you stick to fixed deposits. if you can take on the headache of paperwork, put the money in a liquid plus fund. do NOT invest in the stock markets else you stand a chance of losing your capital... forget earning a return.

Patience asked, I have a long term perspective (10 years) and want to start SIP of Rs 7000 per month in a diversified equity fund and Rs 3000 per month in a midcap fund. Please suggest which funds I should consider.
Rahul Goel answers, hi. you can opt for funds like hdfc equity and fr india flexicap. overall have about 5/6 funds in your portfolio. avoid investing in NFOs and remain disciplined to the invest plan that you have drawn up, preferably in consultation with an honest financial planner.

amit asked, hi rahul , i wanted to invest in share market . till date i had not invested in sahres but had buied Mutual funds . what you suggest?
Rahul Goel answers, amit, hi. if you have a couple of hours a day to dedicate to investing in the stock markets, then maybe you can allocate some money. even in that instance you will need to be sure you have access to the right recommendations (as against tips). if you do not have the time, stick to well-managed mutual funds.

neeraj asked, pls advice investment 2 years old daughter
Rahul Goel answers, neeraj, hi. its great that you are starting early for your daughter! best would be to invest in mutual funds on the lines i have suggested earlier in this discussion. also, take a term policy for yoruself... this will secure your family's future.

amitabh asked, Hello Rahul . I am interested in investing in Mutual funds which I am doing. But Iwant your recommendation on MF's. Would you please suggest me five mutual funds of medium risk cataegory (Through SIP) for time horizon of 5-7 years. Amount I want to invest is 5000 per month.
Rahul Goel answers, amitabh, hi. if you are inevsting for 5 - 7 yrs you should opt for well managed funds. you can consider funds like hdfc top 200 and fr india flexicap. the entire portfolio can be recommended only once your entire exposure to mutual funds has been evaluated.

dkh asked, hi rahul do u think one shud keep a mix of mutual funds and direct investment in shares
Rahul Goel answers, if you have time to spare, and access to honest recommendations, you can hold some portion of your assets in direct equities.

Ravi asked, Hi Rahul, I have been investing 3000 Rs in ICICI [Get Quote] Pru Life insurance, 2500 Rs in SBI [Get Quote] Magnum Tax gain and 2500 Rs in Fidelity Tax Advantage funds for Tax savings through SIP. Is my portfolio is good? Plz give ur valuable suggestions. I want to buy few more tax savings which will be good Birla sun life tax releif 96 or DSP ML Tax saver fund.
Rahul Goel answers, ravi, hi. ideally you do not need more than 2/3 funds for your tax planning portfolio. also, rather than investing in a ulip for tax saving, you might as well take a term insurance and still ave on tax.

arif asked, Hi Rahul, I have a query, if you can pls help- How the ULIPs are better than any Mutual funds + a Term Plan to take the life cover. thnx
Rahul Goel answers, arif, hi. mutual funds + term in most instances is a better option than ulips. at personalfn we have done a lot of research on this. request you to vist the site and read the detailed note (should be in the archives)! apologise for this short cut!

nita asked, Hello Sir, I have SIP's of Reliance [Get Quote] Growth, SBI Blue Chip, BNP PAribas Select MIDCAP Growth, Birla Top 100 Growth. I wanted to discontinue SBI Blue chip as it is not performing so good. pls advice on these? Want to start SIP of Fidelity Growth Fund.
Rahul Goel answers, nita, hi. i think you can do a lot more to improve your portfolio. notice you do not have any schemes from hdfc or franklin templeton, which in our view, are the most credible fund houses in india today!

amitabh asked, Can you tell me few parameters on the basis of which Mutual fund can be evaluated to certain extent.
Rahul Goel answers, amitabh, hi. you should look at parameters like whether the fund is sticking to its mandate at all times; is team managing the money or a star fund manager; how strong is the process followed at the fund house; how cheap or expensive is it to own the fund; also, its past performance to some extent, as compared to benchmark and its peers. if you want to read in more detail, pl download the Money Simplified guide from personalfn.com.

rudra asked, I wants to invest Rs 50,000 for my 1.5 yrs son future.pl suggest which is btter option.
Rahul Goel answers, rudra, hi. the answer is well managed diversified equity funds. pl invest in line with the suggestions given earlier in this discussion. best would be if you can employ the services of an honest finanical planner.

rvcat asked, Hi Rahul-I have SIP's based on your finacial planners recommendation. I invest in HDFC [Get Quote] Equity 5K every month.If i split it to 4 instalments will i have to pay entry load every time?
Rahul Goel answers, hi. whether you invest one time, or in multiple installments, the entry load will be the same. the load is charged on the value of the investment. the money is invested in installments so as to average out the cost of acquisition of mutual fund units. this minimises the risk of mistiming the market.

monika Garg 14 asked, Hi Rahul, i am new in this field. I would like to ask that which thing is best to save the tax and good returns- ULIP plan or Mutual funds with tax benefit
Rahul Goel answers, monika, hi. the accurate answer to your question would depend on your present asset allocation and future needs. however, in most instances mutual funds suit the investor better.

shikha asked, Hi rahul , i m having 40000 to invest, should i go for one time payment in mutual fund and whether hdfc will be a good option? or there is any other option?
Rahul Goel answers, shikha, hi. invest the monies over a period of time. and that too in about 5/6 schemes from about 4 amcs. i have already discussed how you should structure your portfolio earlier in this discussion. pl refer to that.

investor asked, hi rahul... how is the jm basic fund ...should i go for it ..and between HDFC tax saver and SBI magnum which is better
Rahul Goel answers, hi. with regards to jm basic fund, our view at personalfn is clear. we do not recommend that investors put money into sector or thematic funds. we believe that diversified funds are best placed to deliver long term returns.

prvinod asked, I have invested around 5 lakhs in a few five star rated mutual funds in lumpsum a couple of weeks ago,after which the sensex plunged,i recovered those losses yesterday and am now on the plus side when the markets surged.Do you want me to stay invested?Do you see a bear market or a Bull in the coming 3 months?Thanks.
Rahul Goel answers, vinod, hi. were these funds 5* for you?? pl remember the funds that you invest in should be best suited to you. a fund maybe 5* for me, but it may not be good for you at all! another thing is that when you invest in equity funds, you should have a horizon of atlast 3 - 5 yrs... you should not be tracking performance day-to-day! select funds which are best suited to you, and stay put. of course you should evaluate every 3 - 6 months. whether you should exit, will depend on whether you invested for the wrong reasons. if you did expecting to make money in a couple of months, then maybe you need to reconsider the investment.

neeyathi asked, Hi, As a part of my tax saving, i have invested in Sundaram BNP(divident option), Reliance ELSS(divident option) and Templeton( Tax saving). When i did this i was a novice to world of mutual funds. Now, i am begging to get some fair idea of everything. Can you please tell me which are good mutual fund players and how to opt for SIP option. I am an unmarried software professional (female) and i plan to make some good quick bucks during my working tenure. roughly have an income of 5lacs Thanks in advance
Rahul Goel answers, neeyathi, hi. i recommend that you do not rush into investing monies. this is what you should do. one, start reading up on mutual funds... personalfn.com will be a source for this. two, start looking out for an honest financial planner. the combination of intelligence and a good service provider will help you realise your goals.

arun_ramachandran asked, Hi Rahul , I am looking for retirement planning , is it better to invest in a retirement specific product ,or invest in MF . I have been investing in Stock and MF for the past 5 years. Kindly advice what should be the approch.
Rahul Goel answers, arun, hi. for me to be able to answer this, i need to understand more about you. having said that there are few retirement specific product which are avialble now. best would be to accumulate money in funds, shares and other assets. since its your retirement money, be sure that you are invested in very good quality stocks and well-managed mutual funds.

susantaguru asked, How do you rate my portfolio: Investment proposition are almost same. Reliance Vision HDFC Top 200 Franklin Flexicap SBI Magnum Contra Reliance Diversified Power DSPML TIGER JM BAsic ICICI Infrastructure SBI Multiplier Plus Reliance Growth HDFC Equity Thanks
Rahul Goel answers, you definitely have a couple of schemes in your portfolio that we like. sector/thematic funds are something that we would prefer to avoid; but if you must have then the overall weight should be less than 10%.

MohdAnis asked, Sir, I am interested to invest 15000 per year in Mutual Funds (ULIP), pls tell where to invest like Birla, Reliance etc.
Rahul Goel answers, hi. mutual funds and ulips are two very different investment instruments. before investing the money, pl understand the product your are putting you money in very well.

Jit asked, I want to invest Rs. 6500 per month in AVIVA [Get Quote] ULIP is it a good idea for a term of 20 yrs to make a good corpus or i will do something else??....pls advice
Rahul Goel answers, jit, hi. if i were in your place, i would have gone with the mutual fund option as against a ulip.

Esbrao asked, Mr.Rahul, My question is regarding index funds. Are these funds better to invest in, than the other MFs. If so, can you suggest which are the index funds now open to invest?
Rahul Goel answers, hi. index funds are very popular in developed markets. however, in our view, in india well managed actively managed funds will do a lot better over the long term. of course there will be intermittent periods when index funds will do better... but over the long term, our money is on actively managed funds.

singla88 asked, hi rahul, is it the suitable time to invest in tax saving MFs or should I wait for some correction ? I have shortlisted three MF schemes, ABN AMRO tax saving, Sundaram and SBI magnum - which will be best at the moment ?
Rahul Goel answers, hi. best would be to invest the money in 4 installments over the next couple of months. our preferred schemes are hdfc tax saver and fr india tax shield.

Vishal asked, Sure will write into a mail as suggested by you. However, do you have representatives all around India or specifically in Metros!
Rahul Goel answers, vishal, hi. we have offices in 9 cities... pl see here - http://www.personalfn.com/aboutus/whypersonalfn.asp

vinay asked, Hi Rahul, I want to invest 50 K through Mutual funds. Is it the right time to invest. If yes, please sugest right funds
Rahul Goel answers, vinay, hi. if you have a 5yr+ investment horizon then you can invest in well managed diversiied equity funds. we would suggest that you do not put the money in one go; break it up into 3/4 installments and invest the same one installment at a time over the next couple of months.

TVLN asked, Hi Rahul, I have invested 15k each in Reliance diversified power sector,Tata infra structure,Reliance Vision & HDFC Equity. I often hear from personalfn advisors to keep away from sector and thematic funds but when the markets rise these are the funds which gave me maximum gains and when markets fall the loss are minimal,on the flip side diversified funds have short gains on the day market surges but experienced heavy loss on the day market fell.Can you please explain me why?
Rahul Goel answers, hi. to answer your point about sector funds doing well.... do you remember the Tech funds? well, most of the schemes that were launched in 1999/2000 do not exist in their original avataar any more! even then when we did not favour such funds, it seemed that we were reading the opportunity incorrectly. the more recent example are the pharma sector funds. in our view, sector funds are marketing gimmicks and therefore they are best avoided. if you must invest then ensure your exposure is capped and the fund you choosed is managed very well. with regards to the point about rising less than market, and falling more, well this can happen to any fund. important thing is that over a 3-5 yr period the fund should deliver a risk-adjusted return that is in line with your expectations (which should be 15% in our view).

Anil asked, Hi Rahul, Is SIP a good option for ELSS funds considering it has 3 years lock in?
Rahul Goel answers, anil, hi. SIPs are a great option. pl keep in mind that only that portion of the SIP which is banked will count towards your tax-saving investment.

LovaiiNavlakhi asked, Rahul, hi. Don't you think you should provide an overview of what financial planning does? The questions are all relating to investment advice, and totally miss the bus.
Rahul Goel answers, lovaii, hi. financial planning as we see it is somethig that is very personalised and requires a huge degree of customisation. attempts to give a discourse on it over a discussion where people have specific queries will prove to be immensely unsatisfying for all participants.

shiva asked, HI rahul, I am 35y, M, Sole bread winner of the family, working in Gulf with sabings potential of Rs. 30 lacs per Annum. What should be my invetment strategy? can you please advise roughly ideal plan? Thanks
Rahul Goel answers, shiva, hi. since you are working out of india, it is best that you employ the services of an honest finaical planner.

akshay asked, Hi Rahul, Can you help us to set Finanical goals, which is get affected due to market finanical and inflam.t. etc.. Can you tell which we should do our financial planning
Rahul Goel answers, akshay, hi. setting your finanical goals is probably one of the most critical processes of financial planning. this is a process which you mst undertake in discussion with your family and your financial planner. but once you have set the goals then you must remain disciplined towards it. some goals people should work towaards - securing post retirement standard of living, building a medical contingency fund, building funds to take care of the needs of children....

Anand asked, Hi Rahul, Greetings I am a small/short term/medium term investor, with 400k invested. according to you what should be one's profit booking strategy in current market. I have reshuffled my portfolio 2 months back and now sitting on profits i had seen never before. 50% approx in just 2 months. what do you suggest when to book profits? regards Anand
Rahul Goel answers, anand, hi. if i were to inevst today for a need 10 yrs from now, expecting a return of 15% pa, and the makets moved 100% in the first year, even in that situation i would not book profits. the reason being that sometime in this 10yr horizon there will be years when the returns will be negative. the aim is to generate an average return of 15% pa for 10 -yrs. so our take is that if the reason why you are investing money is still something that is vaild, then you must remain invested i.e. remain disciplined to your financial plan. do not get caught up in churning. the only people who benefit from churning are the brokers and distributors. you are the loser. think about it...

Rahul Goel says, Thank you all for participating in the discussion. See you all next week!

Chat with Rahul every week!

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