My father, 62, has invested in Fidelity—Tax Advantage (ELSS) (D) in 2006, HDFC M I P—L T P (D) (Q) in 2006, FT India MIP Plan B (Q) in 2006, Fidelity—Tax Advantage (ELSS) (G) in 2007, Franklin India Flexi Cap Fund (G) in 2007, HDFC Prudence Fund (G) in 2007, HSBC Advantage India Fund (G) in 2007, JPMorgan India Equity Fund (G) in 2007, Reliance Diversified Power Sector-(G) in 2007, Sundaram BNP Paribas Capex Opp Fund(G) in 2007, Tata Infrastructure Fund (G) in 2007 and in ICICI Prudential LifeTime Super Pension (Pension Flexi Balanced II $$ and Pension Flexi Growth II $$) in 2007 with an annual premium of Rs1 lakh; LifeTime Super Pension (Pension Maximiser (Growth) Fund II $$) in 2007 with an annual premium of Rs1 lakh; LifeTime Super (Maximiser (Growth) Fund) in 2007 with an annual premium of Rs40,000. The value of some of these investments is reduced to 50%. Should we withdraw from these investments?
Due to the massive fall in the stock markets the net asset values (NAVs) of mutual funds have also crashed. Out of the list provided by you other than FT India MIP, all the mutual funds are showing heavy losses over a year. However, since your portfolio comprises of well-rated schemes, so you should not worry if you plan to invest for the long term as the market is likely to recoup most of the losses, hopefully in 2 years’ time. So my advice would be not to sell at current levels as we are in the last leg of the fall and stay invested for now. If your capacity allows you, you should plan to invest on declines to average out your investment.
I am planning to invest in mutual funds. Can you suggest a suitable portfolio, and what type of mutual funds must I aim for in this market condition? Also, what mix would be appropriate for an investment period of three years? Is systematic investment plan (SIP) a good option? If yes, what should I look at in this market condition? Diversified or balanced?
In this market condition and considering your investment horizon is for three years, I think it would be proper to put 70% money in pure equity-based plans, 20% should be put in balanced plans, while 10% you may put in debt-based plans to balance out the risk. There are good equity schemes such as Reliance Natural Resources Fund, Reliance Regular Savings, HDFC Top 200, DSPML T.I.G.E.R, UTI Banking Sector fund, DSPML Top 100 Equity— Reg, HSBC Equity and Kotak Opportunities among others, which might be good for a three-year investment. Equity-oriented hybrid plans such as DSPML Balanced, HDFC Prudence and Principal Child Benefit Plans also offer good opportunities. Regarding the mode of investment, I think SIPs are the best option.
I am a new investor and want to invest around Rs3 lakh in MFs. I am expecting higher returns, medium- to high-risk. Please suggest which mutual funds I should buy?
Since your risk appetite is high, you should invest in pure equity-based mutual funds. Some of them are mentioned above. However, for this portfolio you should keep an investment period of at least two years.
Answers are based on a technical analysis of the markets and individual stocks. The views expressed on this page are not the newspaper’s opinion and are provided for information purposes by Vipul Verma. Readers are requested to do their own research before participating in the stock markets. Neither the paper nor the information provider will be responsible for any outcome based on information provided here.