I have systematic investment plans (SIPs) in Birla Sun Life Frontline Equity Plan A-Div (Rs 1,000), ICICI Prudential Discovery Fund Growth (Rs 1,000), HDFC Top 200 Growth (Rs 500), HDFC Mid-cap Opportunities Growth (Rs 500), Reliance Regular Savings Equity Growth (Rs 100). Should I continue with these funds? Should I replace Birla Sun Life Frontline Equity Plan A-Div with another fund?
You are investing half of your all-equity portfolio in large-cap-oriented funds and the other half in mid- and small-cap-oriented funds. It is an aggressive portfolio and its risk profile can be toned down a bit. I would recommend that you shift Rs 500 that you invest in HDFC Mid-cap Opportunities to HDFC Top 200. That way, you will be investing two-thirds of your savings in large-cap-oriented funds and the rest in mid- and small-cap funds. Also, over time, consider increasing the investment in the Reliance fund to Rs 500 or more. Birla Sun Life Frontline Equity is a pretty good fund for the long term. If you are sure that you want to replace it with an equivalent fund, consider ICICI Prudential Dynamic fund or UTI Opportunities fund, which are in the same category.
I plan to start an SIP and invest Rs 36,000 in a year for the next 20 years in HDFC Top 200 (Rs 1,000), Fidelity India-Special Situations (Rs 500), Fidelity India Value (Rs 500), Canara Robeco Equity Tax Saver (Rs 500) and Franklin India Bluechip (Rs 500). Do these funds make a strong portfolio?
Half of your portfolio is investing in solid funds and the other half invites comment. HDFC Top 200 and Franklin India Bluechip fund, where half of your investment goes, are good funds for the long term. The two Fidelity funds are promising and are managed by the same fund manager, but they are yet to prove their mettle over the long run. You can replace them with a Rs 1,000 investment in Fidelity Equity fund, a better Fidelity fund in the large and mid-cap category.
The Canara Robeco Tax Saver fund is good for now. However, after April 2012, when equity-linked saving schemes will lose their tax benefit (thanks to the new Direct Taxes Code), it would be better to replace it with Canara Robeco Equity Diversified fund, a five-star fund that is a proven winner among diversified equity funds.
I have invested Rs 60,000 through an SIP over the last one year. I didn’t withdraw the amount since the markets are volatile. I could not continue my SIP due to a financial crunch. Should I redeem it at the end of this year?
If you had invested in a mutual fund SIP last year, chances are that your portfolio is showing little or negative returns. You should redeem only if you really need the money. Otherwise, remain invested. You should also consider re-starting the SIP when your financial situation improves.