I am a long-term investor, currently investing Rs 15,000 equally in IDFC Equity Premier, HDFC Mid Cap Opportunities and HDFC Top 200. I wish to increase my investment by Rs 5,000 a month and my adviser has given three schemes to choose from: ICICI Prudential Bluechip Equity, UTI Opportunities and Reliance Equity Opportunities.
Please help me in choosing the right fund among the above or anything that is more suitable.
Vijay Kumar
You have chosen a good set of funds to invest in. IDFC Equity Premier, HDFC Mid Cap Opportunities and HDFC Top 200 would give you exposure to two mid-cap funds and a large-cap oriented scheme. All three funds have a pretty impressive long-term track record. You can continue to invest in these funds.
Coming to the second part of your question, choosing one scheme between ICICI Prudential Bluechip Equity, UTI Opportunities and Reliance Equity Opportunities will depend on your risk appetite. All three funds have done well over the past 3-4 years. If you wish to have a stable large-cap exposure, then ICICI Pru Focused Bluechip Equity would be a reasonable choice. UTI Opportunities is a multi-cap fund, though it has a strong large-cap bias.
Reliance Equity Opportunities too is a multi-cap fund, though it has substantial mid-cap exposure. You can invest in this fund if you have a penchant for taking higher risk.
Our suggestion would be that, since you already are investing in two mid-cap funds, you can consider parking the additional Rs 5,000 in UTI Opportunities. We also hope that you have made investments in other asset classes such as debt, gold and real-estate to have a balanced portfolio. Examine your portfolio at regular intervals and take corrective action.
***I can allocate Rs 10,000 monthly for SIP (systematic investment plan) investments in mutual funds over a period of 3-5 years with a mix of equity and debt. Please suggest funds that meet my requirement.
Shekar SubramanianIt is nice to note that you wish to invest for up to five years in mutual funds through SIPs. But it will be much better for the sake of capital appreciation and riding out market volatility, if investments are made for 7-10 years.
Ideally, regular investments must be directed towards achieving a corpus or a financial goal as it will bring greater focus in suggesting the right investments based on surpluses and risk-appetite.
Since you are just started out on investments, we suggest you restrict yourself to large-cap and balanced funds.
Invest Rs 2,500 each in Quantum Long Term Equity, UTI Opportunities, Franklin India Bluechip and HDFC Balanced. All these funds have a steady long-term track record in delivering returns.
***I am 20 years old and would like to start my investments right away. My current investments are in postal RD to the tune of Rs 210 monthly over a period of five years (three years completed till now). I have holdings in a penny stock. Apart from these, I don’t have any other investments. Please let me know how I should go about the task of investing and what I should be adding to my holdings.
SairamIt is surprising to note that you have started out on investing regularly at such an early stage of your life and career. This move will give you a head start in achieving all your long-term financial goals. Starting out early will also allow you to take higher risks in lieu of superior returns.
You have not stated your surplus and the amount that you can invest. Postal RD is a low-risk avenue for investing your surplus. But penny stocks are high-risk and there is every chance that trading in such counters will be halted or the stocks will be locked in its upper or lower circuit when you would neither be able to buy nor sell the stock or are liable to wild swings in price. Avoid investing in low governance, poor quality and penny stocks.
Start by investing in large-caps or high quality (A or B group) mid-cap shares, if you would like direct exposure. You can also start investing in mutual funds and can park small sums there.
Invest Rs 1,500 in Quantum Long Term Equity to start with. If you have greater surplus, consider good mid-cap funds such as IDFC Premier Equity, ICICI Pru Discovery or HDFC Mid-cap Opportunities.
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