I invest Rs 5,000 in four funds through systematic investment plans (SIPs). The names of the funds are Tata Equity PE, HDFC Top 200, HDFC Equity and IDFC Premier Equity. Tata Equity PE is giving lower returns compared with other funds. Suggest a better fund for me. I also want to increase the SIP amount by Rs 5,000 and I want to invest the same in funds that I can redeem anytime. Are there such fund options available?
Tata Equity PE fund is a value-investing fund that seeks to invest in companies with market valuations lower than the broad market valuations, i.e it seeks to invest in good companies that are priced relatively lower in the market. Although the performance of this fund has lagged its peers in the past year, it is a fund with a good track record that is worth holding on to. If you must switch to a different fund, you can consider UTI Dividend Yield fund as an alternative.
Any investment in open-ended non-equity-linked savings scheme mutual fund can be redeemed any time, subject to exit loads (typically 1% within a year of investment). If you would like to invest another Rs 5,000, you might want to consider adding a pure large-cap fund in your portfolio. DSP BlackRock Top 100 and Franklin India Bluechip fund are good choices in this regard.
I am 25 years old and my monthly income is Rs 10,000. My current investments are: HDFC Top 200 (Rs 7,000), Reliance Small Cap (Rs 5,000), Reliance Arbitrage Fund (Rs 5,000), Reliance Vision Fund (SIP of Rs 1,000), DSP BlackRock Top 100 Equity (SIP of Rs 1,000), DSP BlackRock World Gold fund (SIP of Rs 1,000), Principal Smart Equity (Rs 5,500), Pramerica Equity (Rs 5,000). Am I on the right track?
Your portfolio is good in parts. There are some solid, well-established schemes in your portfolio.
However, I would suggest you for an asset allocation based on a financial plan and follow it while considering new investments. Please avoid the temptation to invest in new fund offers unless they add value and complement your existing portfolio in line with your asset allocation plan. You have a top rated large-cap fund and a well rated large- and mid-cap fund in your SIP portfolio.
However, the SIP in the World Gold Fund is intriguing. I hope you did not invest in it thinking that it is a direct gold fund (a fund that invests in gold). If you are interested in a direct gold holding, you are better off with gold exchange-traded funds (ETFs). Also, Reliance is launching a gold fund of funds that will give you the benefit of investing in gold directly in the form of a traditional mutual fund.
Srikanth Meenakshi is the Founder and director, FundsIndia.com
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