GOOD ELSS FUNDS FOR SIP

sushant from Goa

Hi ,
I want to start SIP for some ELSS fund over the next 9-12 months. Please suggest me some good ones. I have my list. Please comment on any additions/deletion:
1) Sundaram Tax Saver
2) Principal Personal Tax Saver
3) Magnum Tax gain


SRIKANTH MATRUBAI replied :


Dear Sushant
It is always a great idea to invest through SIPS. SIP investing is a no-brainer. 9 out of 10 times, you make more money through a SIP investment than through a Lumpsum Invesment.
The next thing to consider is the Fund itself.
My personal favourite has been Religare Tax Plan and HDFC Tax Saver, especially for the fine ability with which both the funds have been able to outperform their peers even in a Bearish Markets.
HDFC Tax Saver has had a great history and a Fund Manager with the highest experience in the entire MF industry.
Sundaram Tax Saver and Fidelity Tax Advantage too are good and have a had a decent track record, but if it is only 1 Fund which I had to choose, then it would be HDFC Tax Saver.
Magnum Tax Gain, even though it has bounced from a disappointing performance in recent times the huge AUM makes me avoid the Fund for now.

Regards,
Srikanth Matrubai

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BEST FUNDS FOR A NEW INVESTOR

ALL WEATHER FUNDS



Jagdish Kumar asked :
Dear Sir,

I need suggestion for Below funds, i m planning to start sip for Rs. 8000-10000 in below 2 or 3 funds. Pls help in choosing the best performing funds in future.

Shortlisted Funds:
1) Reliance Growth Fund
2) Reliance Banking Fund
3) Pru. Icici Infra Fund
4) Icici Focused Equity Fund
5) Templeton India Enquity Fund
6) Franklin Asian Equity Fund
7) Franklin Bluechip Fund
8) DSP BR Top 100
9) HDFC Top 200
10) Reliance Vision Fund

Pls kind choose the best from these above 10, & kindly advice & help me for creating a good portfolio for Future. As i m looking at 2 yrs SIP for chosen funds once suggested from yourside.
I want the BEST fund to invest which will perform in all seasons and also tell WHEN is the Best time to invest. In short, is there any fund which any new investor can blindly invest???

Thks in advance and waiting for your comment on above investment.

Regds
JK

SRIKANTH MATRUBAI replied :

Dear JK, First of all please understand there is no such thing like THE BEST FUND TO INVEST.
One should try to invest in good funds not in the best fund of current time. Because leadership positions may be changed very quickly.

Today`s winners may become losers & today`s losers may become winners tomorrow. Fund performance keep fluctuating and other than Stock Performance, factors like change in Fund Manager too affect the performance of the Fund due to the Fund Manager`s change in strategy, etc. (Remember JM's super performance in 2007-08 and the super dud show thereafter??)
You may be surprised to know that the None of the Top 10 Funds of 2008 made it to the list in 2009!!
However, what I can suggest you is to invest in those fund which has been consistent in all Market Cycles and is more of `no surprise` fund rather than a spectacular performer in a Bull market and a Super Flop in a Bear market.



DREAM FUNDS........ THE BEST FUND FOR ALL SEASONS:
There are very very few funds which can fit into the category of a Dream Fund, the one which you can invest either in Peak of the Bull Run or the nadir of a Bear Market. Consistent above average performance across market cycles is the key here. Sure, there will be a few hiccups here and there even in the Best of Bests., buy you have to digest and let the fund perform to its maximum capability. My selection of 'All Weather Funds' are as follows:
HDFC Top 200 Fund
HDFC Prudence Fund
Reliance Growth Fund
Reliance Regular Savings Fund - equity
Sundaram Select Focus Fund
SBI Magnum Contra Fund (inspite of frequent change in Fund Managers, the fund has managed to carry on its good works)
DSPBR Equity Fund
Fidelity Equity Fund


See these links
http://goodfundsadvisor.blogspot.com/2009/03/best-funds-for-cautious-investor.html

http://goodfundsadvisor.blogspot.com/2009/01/portfolio-advise-needed.html

http://goodfundsadvisor.blogspot.com/search/label/Star%20performers


The funds I have shortlisted do have long history of picking long term winners and have earned consistent returns over time.
The above fund shortlisted is not the 'one size fits all'., but you can make these funds as 'core' of your portfolio and add further depending on your profile.

WHEN TO INVEST :
Without going through the routine of explaining, I will be straightforward and tell you in the face…………….Anytime is the BEST time to invest.
Surprised??. Yes, even if you started invested right at the peak Sensex levels of 21000, if you have had invested through SIPs, even now, when the Sensex is down by more than 20%, still you would be in PROFIT!!!! SIP investment ensures that you 'automatically' time the market and also gives the added advantage of Rupee Cost Averging.


You can invest in any above funds depending on your risk profile and objectives. For you Rs.8000-Rs.10000 investment, from your list of funds, I suggest you to consider
HDFC Top 200 fund
Reliance Growth Fund.

Outside of your list, you may consider
fidelity Equity fund
HDFC Prudence Fund
Mirae Asset India Opportunities Fund
Sundaram Select Focus Fund.

Do go for sip and invest in different dates to take advantage of volatility.
Best of luck,
Srikanth Shankar Matrubai






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FUNDS FOR PERSON WITH UNSECURED JOB

Mr.A Tripathi from Lucknow wrote :
Dear Sir,

I am an unsecured job profile 39 years old man with 2 sons. one is 14 years and second is 8 year old. Now days conditions permit me about sip investment Rs.5000/- per month for 3 years. please give me fund names with monthly investment amounts.
I do not mind being Aggressive Equity Funds.





thanks.

A Tripathi , Lucknow.


SRIKANTH MATRUBAI replied :
Dear Mr.Tripathi,
For your job profile, a Full Fledged Aggressive Equity Oriented Portfolio will not do. Aggressive Funds are very volatile and risky in nature. With an unsecured job, you may not only be in a position of not being able to fulfill your sip commitments but also need to withdraw your investments at a short notice. Such being the circumstances, Aggressive Funds are ruled out.
You need to strike a balance between safety, liquidity and returns. Hence, you are better off having some debt exposure to provide stability to overall portfolio. Balanced Funds would be the apt choice for you.
Before going for these investments, insure yourself adequately with Term Insurance. Then you need to protect your family from financial insecurity due to sudden illness and thus a Health Insurance becomes inevitable. I hope you also have provided adequately for the Education Expenses of your two sons. You need to consider all these things and only thereafter go for the Mutual Funds Investments.
Preferably go for Large Cap Funds and Balanced Funds.
You can consider investing in the following way.
Birla Sunlife Frontline Equity Fund = 1000 *1 per month
Fidelity Equity Fund = 500 * 1 per month
HDFC Prudence Fund = 500 * 2 sips per month
HDFC Top 200 fund = 500 * 1 sip per month
Religare Business Leaders Fund = 500 * 1 per month
Reliance Regular Saving Fund(Balanced) = 500 * 2 sip per month
Sundaram Select Focus Fund = 500 * 1 sip per month

In Reliance Regular Savings Fund, you are advised to go for 2 sips in 2 different dates.
The Above Funds will ensure that you have sufficient exposure to Large Caps, Diversified Funds and Balanced Funds. I have avoided Debt funds, since you seem to be aggressive. Balanced funds will lend enough stability to your overall portfolio.

In the above list, you go for Birla Sunlife Frontline Equity Fund, invest under Century SIP to take advantage of Free Life Insurace which is an added benefit, especially since you seem to be underinsured.



Best of luck,
Srikanth Matrubai
Bangalore





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RETIRE SUPER RICH

RETIRE SUPER RICH

"WHEN YOU HAVE SILVER IN YOUR HAIR, YOU SHOULD HAVE GOLD IN YOUR POCKET".

Retirement is a fact of life and is inevitable.

One day everyone needs to face the 'retirement' question. Are you ready for it?? Is your financial plan working towards it??.

It is equally essential that your Retirement planning not only factors in volatility and income shortages but also factors in Inflation and thus a plan should be such that your cash flow will support your retirement lifestyle.

THE BASICS FIRST :

The Basic Priority should be to have enough 'Emergency Cash' which will cover your immediate needs in case of job loss, etc. It is ideal that your 'Emergency Cash' covers between 3-6 months of your normal expenses.

You also need to plan for your children's education, marriage, home. All this will mean lesser and lesser amount for your retirement savings and that's precisely the reason for starting to save early.

Read this article, it may help you....

http://goodfundsadvisor.blogspot.com/2010/01/4-ways-to-become-wealthy.html

ENOUGH INSURANCE:

Next comes the insurance. Have you covered your life adequately??

Take the Human Life Value calculator to zero in How much Insurance you need.

The Thumb Rule says, if you have kids, you need to have 10 times of your Annual Income as your Insurance Cover.

Insurance is NOT Investment. Hence, avoid ULIPs and go for Term Insurance Policies. Use Insurance as a Security to cover the risk of Dying Young. Insurance is a tool which protects your dependants from financial ruin in your absence.

Along with Life Insurance, you need to have adequate Health Insurance. Your current income and savings may not be enough to sufficiently fund against Medical emergencies. This is where Health Insurance steps in.

HOW MUCH YOU NEED FOR RETIREMENT:

The basic thumb rule says that you need around 75% of your current expenses to maintain the same standard of living (adjusted to inflation). This is just half the picture. The picture is complete only when you guess(that's the only word I could zero in) how many years you will live after retirement.

Again Indian Life Expentancy average is about 75-80 years. So, now you can start planning.

You can also use the Human Life Value Calculator like the http://www.personalfn.com/calc/hlv.html to calculate how much Insurance you need.

You can also use the following Retirement Calculators

http://moneycentral.msn.com/retire/planner.aspx

http://www.bloomberg.com/invest/calculators/retire.html

START EARLY :

Starting saving early ensures that you have the time ti ride out the stock market volatility and thus you are in a position from the '8th Wonder of the World' the "Compound" effect. The younger you are, the fewer are your financial obligations, leaving you with higher surplus to invest.

Do you know, if you delay your SIP investment of Rs.5000/- by just 1 month, over a period of 25 years at 15%, it would cost you (hold your breath), Rs.1,64,595/-!!!!!!.

You would lose Rs.38,350/- in today's worth of money.

Investing for Retirement should start from the day you start earning.

RIGHT ASSET ALLOCATION :

Investing in the right Asset Allocation will also ensure the merits of diversification and mitigating risks but also beating Inflation. Remember there are so many investment avenues eyeing your money, it is sure to confuse even a well informed investor. Gold, Real Estate, Insurance, Mutual Funds, Equities, PPF, NPS the list goes on.

DO NOT KNOW WHAT 'NPS' IS...Click here http://goodfundsadvisor.blogspot.com/2009/05/new-pension-scheme-analysis.html

Indian mentality is swayed by words like 'GUARANTEE' AND 'PENSION'.

Don't Purchase any Pension Plan of any Insurance Company under any Circumstance!! WHY?? These Plans have High Allocation Charges, Admin Charges, Very LOW returns on Annuity. Your Pension is based on your Corpus. With Insurance Plans, your Corpus is limited.

Invest in Good Diversified Mutual Funds which are regularly recommended by me in this blog. With this, you will get a very high Corpus at the time of retirment. After Retirement, you can opt for Systematic Withdrawal Plan (SWP) and receive Pre-determined amount every month.

Equity does not mean just 'equity funds' per se. Invest in different investment style of equity funds which fit into your overall asset allocation strategy. The younger you are, the more equity oriented your investment should be.

You can choose to invest in the funds recommended in this blog regularly.

WATCH THIS VIDEO:

http://www.indyarocks.com/videos/Begging-for-Cake-435705

REVIEW AND RESET ASSET ALLOCATION:

At least once a year, religiously review your entire Investments and Re-balance. Moreover, your needs will change with time and the rebalancing will cover this aspect.

The Worst time for a Market to get into Downturn is when you are about to retire!!! As you near your retirement, it is prudent you change your portfolio from a equity-heavy to debt-heavy portfolio.

AFTER RETIREMENT :

Planning for retirement isn't just about how much money you can accumulate — it also looks at how you use those funds during your retirement.

The 'Accumulation' phase is over. The "Decumulation' phase starts.

Don't overinvest in Bonds and Debt, they may actually fail to beat inflation and your purchasing power erodes substantially in front of your eyes.

You should go for a combination of Balanced Funds, Monthly Income Plans, Fixed Maturity Plans, Arbritrage funds and Large Cap Funds and also look at investing in Senior Citizen Scheme (split them, to avoid penalty in case of early closure., as only will be closed at a time).

Also you could also decide how much cash flow you need now, how much you can postpone, how much you may need after 5, 10 years hence; this amount can be invested in MIPs and Conservative to Moderate Balanced Funds. Strike a balance between safety, liquidity and returns.

You can also look at Reverse Mortgage to augment your retirement income.

THE RIGHT PLAN :

Investing and financial planning needs a lot of time, attention to detail, research and paper work. For someone with a busy schedule, it’s too much trouble. Working with financial adviser is a great way to adequately plan for retirement. They can work with you to create a plan and build a portfolio that fits your needs and goals, and is designed to sustain you for the long haul.

What I have given is not a One size fits all Formula. But this is a starting map for you and your Financial Advisor can take it up from here.

Finally remember, if we fail to plan then we plan to fail

http://goodfundsadvisor.blogspot.com/2009/03/retirement-planning-and-sons-education.html

http://goodfundsadvisor.blogspot.com/2009/01/want-to-have-2-crores-in-10-years.html

Best of luck,

Srikanth Matrubai

Also visit

http://equityadvise.blogspot.com

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FIDELITY GLOBAL REAL ASSETS FUND

With Mr.Uday Puri, the National Sales Head of Fidelity India

AIMING TO BEAT INFLATION

Fidelity has come out with a New Fund Offer named Fidelity Global Real Assets Fund, an open ended Fund of Funds scheme. The Fund will invest about 65% in Fidelity Funds - Global Real Asset Securities Fund, an offshore fund launched by Fidelity Funds. The Parent Fund will in turn aim to invest in Companies which have exposure to physical assets like Gold, Copper, Minerals, Oil, Land, etc (That is why the name REAL ASSETS FUND).

In the Fund Managers' words, the Fund aims to invest in equities which have assets which are not easily replacable and are in short supply.

It is a known fact that investing in commodities, real estate ensures that you always make more money than inflation, as commody prices are known to harden.

POINTS IN FAVOUR OF THE FUND :

1. The fund can be a good geographical diversifier.

2. The Fund will benefit from Dynamic asset allocation across Real Assets.

3. Investing in this one fund will give you exposure to a wide range of commodities and real estate.

4. The Fund is well positioned to capture the growth in both Developed and developing world.

5. The biggest advantage of investing in this fund that the Fund will 'avoid' stocks which can be influenced by domestic economic pressures like telecom, financials, retail, pharma, etc. and thus give you a true Real Asset Exposure.

6. Even the currency risk is next to nil due to the fund's exposure to companies across geographies and across asset classes.

7. In its short history, the Fund has outperformed its benchmark by a massive 49% points. I would rank this fund higher than DSPBR World Mining Fund., as the DSP fund is more tilted towards Mining stocks only http://goodfundsadvisor.blogspot.com/2009/12/dspbr-world-mining-fund-unique-theme.html

NEGATIVE POINTS :

1. Of course, the biggest negative will be that the fund will not enjoy 'equity' tax status and is ineligible for tax concessions available to equity funds.

2. The Fund will rely heavily on commodity and they in turn are cyclical which could make the fund highly volatile. (However, the fund is fairly diversified as, besides commodities, the fund invests in Energy, utilities as well).

3. The Feeder Fund is not very old and thus has to prove itself during bearish times.

Still as the positives outweigh the negatives, I give a SUBSCRIBE call to the Fund, especially through SIPs.

Thankfully, SIP option is available to this NFO, take the SIP route to ride the volatility which is very likely with this fund.

Best of luck,

Srikanth Matrubai

Also visit http://goodfundsadvisor.blogspot.om

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REARRANGEMENT OF PORTFOLIO

My regular reader Sri Divate wrote again “Your advise is absolute top class, Mr.Srikanth”. Thanks for your previous advise. http://goodfundsadvisor.blogspot.com/2009/06/shall-i-continue-my-fixed-deposit.html

It was of immense help.

Kindly help me in rearranging my portfolio. As you know I am 50 yrs old and a Govt employee.
My present MF investment is ....
Units invest amt
Birla SL AAF -Aggrve (G)339.731 10,225
HDFC Prudence Fund (G) 83.937 10,357
HDFC Prudence Fund (G) 32.403 5,000
LIC MF Equity Fund (G)1170.026 25,000
LICMFFloMIP-PlanA(AD)2068.218 25,005
Reli Diver. Powe -RP(G) 165.751 11,000
Reli Growth Fund -RP(G) 36.108 15,000
Reli Growth Fund -RP(G) 35.648 12,000
Reli Natur Resoures (G) 977.995 10,005
Reli Vision Fund -RP(G) 93.150 17,000
SBI Mag Contra Fund (G) 400.834 25,000
SBI Mag Contra Fund (G) 438.745 25,000
SBI Mag Global Fund (D) 975.17 24,000
SBI Mag Global Fund (D)1360.750 45,000
SBI Mag Index Fund (G) 86.291 1,979
SBI Mag Insta Cash (C) 902.362 17,119
SBI Mag Tax Gain (D) 182.630 10,001
UTI VIS-Inde Linke (D)1759.201 25,000
Total 323,691

1. Whether is there any need of rearranging present folio to get better returns.
2. If some of the funds are to be rearranged then which funds.
3. I have kept about 20K in cash fund so that if market goes below NSE 3000 ? to switch to equity funds.
4. What is the Nifty target when to convert the equity funds to cash funds and vice versa.... if this has to be done.

With best wishes
anusridi


SRIKANTH SHANKAR MATRUBAI advises :
Dear Divate,
Shockingly, your portfolio is concentrated in SBI Mutual Fund which accounts for 50% of your portfolio. It is never a wise to have a concentration in one Single AMC. Ensure that all your future investments go to non-SBI amc to avoid over-exposure and ensure Diversification.

Out of your present MF Investment, you can continue holding the following Funds:
HDFC Prudence Fund
LICMF Monthly Income Plan
Reliance Growth fund
Reliance Natural Resources fund
SBI Magnum Contra fund
SBI Insta Cash Fund
SBI Magnum Index Fund

You should EXIT the following funds completely
LICMF Equity Fund
Reliance Diversified Power Sector Fund
SBI Magnum Global Fund
UTI VIS Index Linked fund

You also switch the following funds
Reliance Vision fund to Reliance Regular Savings Fund (Balanced) Fund.

From the Amount received from the Exit of Funds, you invest in a Debt Fund like Birla Income Plus or HDFC Income Fund and go for Systematic Transfer Plan in a Plain Diversified Fund and you can also look at investing HDFC FlexIndex
http://goodfundsadvisor.blogspot.com/2009/07/hdfc-flexindex-plan-for-cautious.html

which Transfers your Debt Fund Amount at Pre-assigned Index Levels.
Avoid Sector funds and also look at alternative assets like Corporate FDs, FMP, etc. to diversify your portfolio.
Keep a regular tab on your portfolio and make appropriate changes, if required.


Visit my blog for more details.
Best of luck,
Srikanth Shankar matrubai




http://goodfundsadvisor.blogspot.com




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4 WAYS TO BECOME WEALTHY

4 WAYS TO BECOME WEALTHY

Before going through the article, do some Financial Planning for yourself, assess your risk profile.

1. INVESTING WITH A SPECIFIC GOAL :
Most Investors invest without any specific Target/Goal in mind. They do invest in Quality Assets but sadly fail invest without any Clear Targets in Mind.
Clearly decide when and why you need the money., and how much will you need.
Prioritise your wants, needs, comforts, luxuries. Make a list of major goals which you visualise for the future, be it your car, home, child’s marriage, etc. Now, prioritise this list. Also read http://goodfundsadvisor.blogspot.com/2009/03/my-target-1-crore-in-10-years.html

It is easy for an Investment Advisor to show you the Right Assets if you specify your Target/Goal. Investing in Debt Funds for your Child’s Marriage is a foolish thing, but at the same time investing in Debt Funds for Next Year’s School Admission is a Wise Thing. Thus, it is imperative to invest with a Specific Target in Mind.
If you have more time to reach a target, then equities is the BEST avenue for you, as equities tend to give you higher retursn over the longer period
Also read http://goodfundsadvisor.blogspot.com/2009/03/retirement-planning-and-sons-education.html

2. INVESTING IN THE RIGHT ASSET CLASS :
Investing your hard money just to save taxes and making some smart investments in the right assets. It is to do more with the Asset Allocation.

It is always advisable to invest in a Mix of Varied Assets like PPF, Equities, Gold, Fixed Deposits, Property, Insurance, etc. Overexposure/Underexposure to Any and All Kinds of Assets should be Avoided. For Long Term, Equities are the best avenue of Investment.
Studies have shown that getting the Right Asset Allocation contributes more than 90% to the overall Performance of a Portfolio in the Long Run while Security(Equity) Selection contributes less than 10% !!!!.
The right mix of the assets will ensure that your money works hard for you and beats inflation hands down always!!
Asset Allocation is universally acknowledged method of creating Superior Returns over Long Term.
http://goodfundsadvisor.blogspot.com/2009/08/investment-portfolio-advise.html

3. AVOID MIXING INSURANCE WITH INVESTMENTS

Even Educated investors tend to invest in Insurance as their only source of Investments whereas it is well known Fact that Insurance is the Costliest way of Investment. Insurance is purely for sake of Protection if any untoward event happens to the Earning member of the Family.
The best Insurance is the Term Insurance. Agents avoid telling you about this because that Term Insurance gets them very very little Commission. ULIPs are a strict no-no. ULIPs leave you with insufficient cover and also give you below par returns. The best option would be to take a combination of Term Insurance and Mutual Funds.
Mutual Funds are the better option thatn ULIPs. Your Insurance Part should be taken care by Term Insurance and all the other features of ULIPs are taken care by the Mutual Funds which are very very cheap due to NO Entry Load., whereas ULIPs have a complex fee structure which could eat into your profits.
However, there are some ULIPs which can be looked into, but only if your investment horizon is over 15 years.
http://goodfundsadvisor.blogspot.com/search/label/Insurance


4. INVEST FOR LONG TERM
Almost Every Investor starts his Investment with Long Term Goal, but very soon as soon he sees the first profits, he becomes Greedy and forgets all about Long Term.
The problem comes when his Short Term Investment starts showing losses, the investor starts withdrawing his Long Term Investment to cover up for his Short Term Investment Losses and ends up failing to Accumulate a Sizeable Amount for his Long Term Goal.
Long Term Investment allows you the benefit of power of Compounding. Sensex, inspite 50% Drop in its value in 2008, has given a Compounded Return of 18% over a period of 30 years!!!! You would do well to read this post http://goodfundsadvisor.blogspot.com/2009/05/shall-i-switch-from-equity-to-debt.html

. Do not get swayed by the Market Movements and change your Investment.

Thus, in conclusion, when you start Investment, take your time, do consult a Good Financial Advisor and Invest in Diversified Assets and Stay Invested for Long Term, allowing your Assets to Perform.

Finally, do review your investments at least once every year.

Best of luck,
Srikanth Matrubai

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