Ask Mint | On investments

Ask Mint | On investments
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First Published: Mon, Sep 01 2008. 12 13 AM IST
Updated: Mon, Sep 01 2008. 12 13 AM IST
I have been investing Rs5,000 per month through a systematic investment plan (SIP) in Reliance Equity Fund-Retail (Dividend) since 24 May 2006. Total investment up to 28 July 2008 has been Rs1,35,000. However, the company has not made any dividend payout so far. I had also started investing simultaneously an equal amount through the SIP route in HDFC Top 200 dividend fund. HDFC pays dividends every year. What is Reliance doing with our money? Can you guide me?
—P. Abraham
Paying out dividends is a policy matter of the fund and unless clearly committed in the offer document, paying dividend is a subject matter of management of the fund. If you are not satisfied with the performance of the fund, you can always sell your units and invest in other schemes. But remember, when a scheme announces dividend, its net asset value falls in the same proportion.
I hold a policy of HDFC Young Star. I have invested 25,000 a year starting 24 August 2005 and so far paid Rs75,000. The fourth premium is due now. Around October 2007, I topped up with an investment of Rs2.5 lakh. Now my worry is that the total value of my investment is only Rs3,25,284. It was an equity-managed scheme. I will continue paying my premiums for the next two years, but what should I do with the top up of Rs2.5 lakh? Should I stay invested or withdraw it or have a type shift? If I shift, then which type should I opt for?
—Rhona
It’s always better to define the purpose of investment before taking a decision. However, it appears you have not defined your investment goals before investing. In this situation, I would suggest you to hold your investment as of now, and do not add anything to it beyond basic requirement. If you have any investment surplus and you wish to invest, then you should invest directly in equity-based mutual funds.
I have 500 shares of Rajasthan Breweries Ltd. This company doesn’t seem to be listed on the Bombay Stock Exchange. What should I do with the physical share certificate I hold?
—Neel Sheth
It’s better to hold them in physical format since the stock (Rajasthan Breweries) is delisted and the shares are not being traded.
I would like to buy the following shares: Petronet LNG Ltd at Rs60 or below per share, Mahanagar Telephone Nigam Ltd (MTNL) at Rs105 or below and Mangalore Refinery and Petrochemicals Ltd at below Rs70. Please advise.
—Vamsi
All the stocks mentioned by you would yield good returns if you plan your investment for a long term. In this portfolio, I would suggest you to invest in either Idea Cellular Ltd or Reliance Communications Ltd at current levels in place of MTNL. The rest of your strategy sounds good for a long term.
Can you suggest good mutual funds for saving tax this year?
—Sweta N.K.
SBI Magnum Taxsaver, Taurus Libra Taxshield-Growth, Sundaram BNP Paribas Taxsaver-(Open Ended Fund)-Growth, Tata Tax Advantage Fund-1, DWS Tax Saving Fund-Growth, Franklin India Index Tax Fund, DSP Merrill Lynch Tax Saver Fund-Growth, Franklin India Taxshield-Growth, ICICI Prudential Taxplan-Growth and IDFC Tax Saver (ELSS) Fund-Growth are some of the good tax-saving schemes that have given good returns over the last one year.
I have invested through SIPs of Reliance Equity Fund (G) (Rs500 a month), DSP ML T.I.G.E.R (G) (Rs2,000 a month) and SBI Blue Chip (D) (Rs500 a month) for three years. Should I continue to invest in these or diversify my investment? Further, I would like start another SIP for three-five years. Please suggest a suitable fund.
—Uday Hegde
Your choice of funds is good and you should continue with them. Since you have further investment capacity, you may plan to diversify. For further investments in SIPs, you may choose Reliance Regular Savings-Equity, Sundaram BNP Paribas Select Focus and ICICI Pru Infra schemes. However, you must review your investments periodically for suitable adjustments.
I want to invest through SIPs. My budget is Rs1,000-2,000 a month. Can you suggest the best SIPs in the market?
—P. Sunil
You may choose schemes such as DSP ML T.I.G.E.R–Reg and Reliance Regular Savings-Equity. These schemes have a consistent record and are likely to yield good returns.
Which mutual fund is the best one to put money?
—Janet
Please mention your investment corpus and the time frame for investment. Also mention your risk profile and the objective of investment for a suitable solution for you.
I want to invest Rs1 lakh. I am new to the market and therefore, need guidance.
—Manoj
If you intend to invest in equities, you may pick stocks such as Ispat Industries Ltd (worth Rs20,000), Development Credit Bank Ltd (Rs15,000), Reliance Petroleum Ltd (Rs25,000), Tata Steel Ltd (Rs25,000) and NTPC Ltd (Rs15,000). However you should have a minimum of one-two year time frame for such investment.
I have Rs2 lakh to invest but have no idea where to invest. Do you have any suggestions?
—Abhinav
Please mention your time frame for investment. Also mention your risk profile and the objective of investment for a suitable solution for you.
I am a non-resident Indian (NRI) and plan to make some investments. Could you suggest which fund or company I should invest in to get good returns?
—Edward
If you have a long-term perspective (two-five years) then, depending on your investment corpus, you may make a good portfolio in equities. You may choose stocks such as Tata Steel Ltd, Reliance Petroleum Ltd, Idea Cellular Ltd, Zuari Industries Ltd, Yes Bank Ltd, Axis Bank Ltd, GMR Infrastructure Ltd, Bank of India Ltd, NTPC Ltd, Bharat Earth Movers Ltd, Larsen and Toubro Ltd and Bharat Heavy Electricals Ltd at current levels.
However, since the trend on the market is not clear, it would be better if, depending on your investment corpus, you buy in small lots and always keep a provision to pick up bargains in case the market falls.
I am an NRI. Please advise which mutual fund scheme or company share should I invest in to get good returns.
—Gita
Please mention your investment corpus and time frame for investment. Also mention your risk profile and the objective of investment for a suitable, customized solution for you.
At present I am making mutual fund investments through SIPs in Reliance RSF-Equity (Rs3,000) , IDFC Premier Equity (Rs3,000), Sundaram Select Focus (Rs5,000), DWS Investment Opportunity (Rs5,000), Kotak Opportunities (Rs3,000), Templeton India Equity Income (Rs5,000), JM Emerging Leaders (Rs2,000), DSP ML T.I.G.E.R. (Rs2,000), Reliance Natural Resources (Rs2,000) and Reliance SIP Insure (Rs5,000). My investment horizon is five years. Should I continue with the SIP schemes in the above MFs or prune some?
—Anandam
You investment looks very balanced and optimized. So you should hold your investment and should not think of pruning down.
I plan to buy shares such as Aban Offshore Ltd, Indian Bank, Punjab National Bank, Bank of Baroda, Tata Steel Ltd, Stell Authority of India Ltd, Sesa Goa Ltd, RCom, GMR Infrastructure Ltd, Ispat Industries Ltd and Tata Teleservices Ltd. I can wait for two years. Are these shares good at current levels? Is it the right time to buy these shares? Also, tell me about some other good shares with a two-year view.
—Makkena Suresh
Since the market is in a consolidation phase, it can’t be said for sure that this is the best time to buy. However, I think that this is a good time to start buying with the time frame for investment mentioned by you. This means, you should buy in small lots and should not buy aggressively and should keep provision to pick up bargains on declines. As far as the selection of your portfolio is concerned, it’s very good and should offer you decent returns in the time frame you have mentioned.
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.
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First Published: Mon, Sep 01 2008. 12 13 AM IST