TomorrowMakers Logo

MF queries: How to invest in mutual funds

Mutual Fund queries answered by Shilpa Wagh, Chief Wealth Coach, Wagh Financials

1) I am a retired person. I would like to invest in Debt fund with my medium term goal of 5-6 years. Kindly suggest few funds to spread the investment for expected best return -- B B Swain

A: During retirement, the two top most concerns are regular cashflow generation and capital protection. Most Debt funds have moderate risk pattern and are ideal for 5-6 year time horizon. HDFC High Interest Fund – Dynamic Plan and Birla Sun Life Short Term Opportunities Fund are pure debt funds with no equity exposure in their portfolio.

They have generated 9-10 % returns over past few years. If one is ready to take moderate (25-30%) equity exposure in debt funds, ICICI Pru MIP 25, Birla Sun Life MIP II -Wealth 25 Plan can be considered. You can also think of more aggressive equity exposure thru funds like Tata Balanced Fund, SBI Magnum Balanced which will have 65% or more exposure in equity to give you growth and 35% or less in Debt instruments to provide protaction.

2) I am a student. I have a FD of 50000 and idle funds of 250000. I also have monthly saving of 2000-3000 from my stipend. I want to invest my savings in both forms one time investment and recurring investment. What are the best options for me? - Suyash Goel

A: Before deciding on investment instrument, one must decide the investment time horizon which he will stay invested. You being a student can be aggressive in your equity exposure considering your goals more than 7-8 years away.

For this, you can consider mid-cap or multicap funds with higher risk but better performance over the years. HDFC Mid cap opportunities, Mirae emerging bluechip fund, Franklin india prima fund are good performing funds in this sector. You can consider these funds for long term investments thru SIPs. For little aggressive large cap funds,ICICI Prudential Focused Blue chip , BSL Frontline equity are good funds. For investing lumpsum amount you can consider largecap or balanced funds like tata balanced for time horizon of 5-6 years.

For time horizon less than that consider ultra short/short term funds like HDFC Short Term opportunities fund, SBI Short term funds, BSL Short term funds can be considered.

3)I have SIP of Rs 3000/ - in 3 MFs since last 4-5 years. Im a long term investor. 1)DSPBR TOP 100 Equity
2) HDFC Top 200G 3) IDFC Premier Equity Growth. The rating of above three MFs have come down. Shall I continue further SIPs or Stop.? In case I stop further SIPs, in which MFs shall I start my SIPs?
-- - Nitin Mane

A: There are many Mutual fund performance paramenters. Rating is only one of them. Some of the other parameters you should judge the MFs are AUM, Adherence to investment strategy by fund manager, fund manager tenure, volatility vs performance and some other ratios. You need to verify these parameters before deciding to stop these SIPs. In your given funds two large cap and one mid cap fund is included. As an alternative to these funds, you can consider multicaps like ICICI Prudential Value Discovery, Franklin India High Growth Companies, SBI Bluechip, Also some of the promising large caps like Birla Sun Life Top 100, ICICI Prudential Focused Bluechip, Franklin Templeton Franklin India Bluechip.
Back to Top