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I want to invest in the New Fund Offer (NFO) of a mutual fund. Can you suggest the best upcoming NFO and what to look for?

-Name withheld on request

(Answers by Sanjiv Bajaj, joint chairman and managing director, Bajaj Capital)

As of now, there are quite a few NFOs, but one must exercise caution while investing them. Mutual fund investment is linked to risk appetite, investment horizon, finance goal etc. Once you have identified all these aspects, then portfolio building takes place. If an upcoming NFO suits your profile, only then one should invest. 

To understand an NFO, one should keep in mind asset class, which comes under the type of fund, its category, the launching AMC, the fund manager's performance, fund’s philosophy, security selection process, among other factors. It is better to discuss with a financial advisor before investing in NFO or mutual funds.

I want to invest Rs10,000 every month in systematic investment plans (SIPs). Can you suggest some mutual funds for investments. Also, how should I go about it?

-Name withheld on request

You should have mentioned risk appetite and investment horizon. 

We are assuming your risk profile will be aggressive long term for next at 7-10 years. You may divide your monthly contribution in equity and hybrid funds. About Rs1,500 each in Parag Parikh Flexi Cap, Canara Robeco Emerging Equities Fund, Mirae Asset Mid Cap Fund, IDFC Sterling Value Fund, Aditya Birla Sun Life Balanced Advantage Fund, ICICI Prudential Balanced Advantage Fund. The remaining Rs1,000 can be invested in Kotak Small Cap Fund. This way your portfolio will be diversified across asset class, category, scheme, and the asset management company. It is also advisable to keep reviewing your portfolio at least once a year.

(Queries and views at mintmoney@livemint.com)

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