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I have invested in three funds till date.
1. Franklin India Prima
2. HSBC Equity Fund
3. Reliance Vision Fund
My bank is suggesting I invest an additional Rs 1,00,000 in HDFC Funds.
Do you think that is wise?
- Jude Pereira
You have not mentioned the amount of money you have invested in each fund. Neither have you mentioned the time frame for which you want to invest your money. So we shall broadly comment on your portfolio.
All the three funds you have invested in have a reasonably good performance record, though HSBC Equity is still to pass through a bear phase and prove its worth in a falling stock market.
For further investments, first decide on the time horizon of your investment.
If you want to invest money for at least three years, you can consider a diversified equity fund. If you are planning to invest for a shorter period of time, this is not an advisable option.
Once you are clear on the time frame, you will be able to decide whether or not to opt for an equity fund.
After deciding that, look for good funds in that category instead of restricting yourself to HDFC funds.
Undoubtedly, HDFC Mutual Fund is a reputed fund house with some top performing funds on offer. But choosing a fund has more to do with its suitability to your needs than investing in a particular a fund house.
To compare funds, you need to look at returns and risk. How to compare mutual funds and How risky is your mutual fund? will enable you to do that.
Lastly, we would not recommend you to invest the entire Rs 1,00,000 in equity funds at a go. Instead, opt for a Systematic Investment Plan where you put in a fixed amount every month.
My wife recently delivered a baby and we received Rs 70,000 as a gift. We want to invest this money in a mutual fund.
What kind of mutual fund do you suggest: Balanced fund or a pure equity fund? Should we go for a regular divided option or a growth option?
Should we opt for a Systematic Investment Plan of Rs 1,000 to Rs 2,000 a month?
- Dhandapani
We would like to congratulate you for starting your financial planning for your child at such an early stage. Few people think that far ahead.
Since you will be investing this money for a long term, equity is obviously the best asset class for this investment. You have time on your side to ride the ups and downs of the stock market.
Opt for some good diversified equity funds. We would not recommend balanced funds at this stage. You can consider gradually shifting your money to them later, when the time to use this money approaches.
You can invest the Rs 70,000 at one go and then continue with an SIP of whatever amount you want to set aside for her. However, we would advise you to invest this money systematically instead of doing so at one go. Preferably opt for the growth option and let the power of compounding work for you.
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