FUND FOR INVESTMENT HORIZON FOR 25 YEARS...

Hi Sir,

I have an ongoing sip in HDFC Top 200 fund.
I am thinking of going for a sip in IDFC Premier Equity Fund and DSP Top 100 Equity Fund.
I am 30 years old. My horizon is 25 years.
I want to have a Huge Retirement Kitty.

Please give me your valuable suggestion.
Regards,
Sreenath






SRIKANTH SHANKAR MATRUBAI replies :


Hi, Sreenath,

It is always better if you have a amount in your mind when you start planning.

The best way for this is to calculate your Retirement Corpus

You can find the retirement calculator in many financial websites.

I had written a rather long article on retirement and you can find the same here...


http://goodfundadvisor.hubpages.com/hub/BEST-FUND-FOR-RETIREMENT

The fact that you are investing through sips itself shows that you are on the right path.

However, your choice of funds need to be changed.

HDFC top 200 can be continued.
In Mid cap, go for IDFC Premier Equity Fund.
But, I do not see any reason for another Large Cap fund when you already have a sip in Hdfc top 200 fund.
I suggest you rather go for a Diversified Equity Fund like the Fidelity Equity Fund or the DSP BR Equity Fund.
More so, since your horizon is 25 years...quite a good time to ride over the volatility.
My personal favourite would be the Pramerica Dynamic Fund.
Also please take care to switch your equity gains steadily into balance funds and then further to debt funds as you near your goal.
Another caveat....
do not stick with 1 fund throughout....keep an eagle eye over developments like the Change in Fund Manager, Change in Investment Mandate, Continuous slip up in performance....
If such thing is noticed, do not hesitate to switch from the fund and consider moving to a better promising fund.

Best of luck,
Regards,
Srikanth Matrubai

Also visit http://equityadvise.blogspot.com

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SUNIL SINGHANIA SHARES HIS THOUGHTS....

 Had an opportunity to have a chit chat with Sunil Singhania, the soft spoken Head of Equities, Reliance Mutual Fund.

He was positive about the markets going forward.

He said "the recent sell off will now encourage fence sitters to get into the markets now, especially the Long Term Money may not get such cheap valuations."
"The repeat of 2008 market crash is unlikely. Things were different then...the situation is much much better now. There is absolutely no need to panic and I would rather look at this sell off as a BUYING OPPORTUNITY"
On Economy he revealed "India growing at 7% compared to 8% last year is a slowdown, but India normally takes 3 forward steps and 1 backward step, and I would say that the 1 backward step has been taken and the future looks only rosier and India is a good bet for Global investors.
Inflation is showing definite signs of cooling off which should ensure that Interest Rate hike is done away with"

On Reliance Banking Fund : "Banks tend to grow 150% more than the GDP and the fact that the Indian economy is under banked, the Sector is very attractive. The interest too is near its peak, if not peaked already, the Reliance Banking Fund is the Fund for not just the Aggressive investors even for the average investor, especially if he is investing through SIPs".

On Reliance Pharma Fund : "Pharma as a sector has done tremondously well in the past. While valuations are looking stretched, you should remember that growing health consciousness and India as a Medical destination getting attention will hold the Pharma sector in focus".

On Reliance Infra Fund : "yes, the fund has disappointed many investors. But the peaking of interest rates angurs well for the sector. And moreover, if you have observed, many companies have been shedding excess baggage by way of diluting stake and in some cases, selling off the unrelated business which increases their focus on their Primary business. We are looking at companies which have a sustainable business model and the revenue is visible and we strongly believe that this Fund has a huge potential above average return to Long Term investors".

On Reliance Gold Fund : "Gold was in a different orbit for the past 2-3 years and would find extremely difficult to replicate the same kind of returns. Look at Gold more as a hedge and a defensive bet rather than as an investment avenue which will fetch you huge returns"

Finally, when asked for 1 single advise he would like to give investors, he said : “Do not let the short term movements affect your long term asset allocation. Stay invested in weak markets, you will make loads of money’..

Regards,
Srikanth Matrubai

Also visit http://equityadvise.blogspot.com

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ASSOCHAM MEET

Recently, ASSOCHAM arranged a Conferance on Investor Education.
The Conferance was held at the Bharat Hotels' THE GRAND ASHOK. (now the LALIT ).
The conferance was attended by Shri. Salman Kurshid, besides other dignitaries.
some clips from that meet.

Also visit http://equityadvise.blogspot.com

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THE FUND EVERY INVESTOR SHOULD HAVE

HDFC PRUDENCE FUND - THE BALANCED FUND THAT WORKS LIKE EQUITY FUND

WANT EQUITY RETURNS WITHOUT THE ACCOMPANYING VOLATILITY AND HEADACHE?????

Then, the answer is .... without any second thoughts....

HDFC PRUDENCE FUND!!!!!

This seed of thought was sown in my mind when one of clients, Munnawar Ali, asked this question.

Munnawar Ali wrote: "Sir, Can you suggest any one fund which should be the 'ONE' every investor should have. I am a new investor to the Equity field itself. Which fund would suggest me.?"

Srikanth Matrubai answered : "It's good Munnawar,  that you have chosen the Mutual Fund route to take exposure to the Equities.

Equities are the BEST asset class in the long term. While pinpointing any one single fund is very difficult, especially as not only the Markets are dynamic, even the changes in Fund attributes, Fund Manager, would all have bearing on the performance of a Fund.

Still, I would stick my neck out and, without any second thoughts, say if any investor has to a Fund compulsorily in his portfolio,it has to be HDFC PRUDENCE FUND.

HDFC PRUDENCE FUND was lauched on February 1, 1994 and is one of the oldest Balanced in India.

The Fund is managed by Mr.Prashant Jain.

HDFC PRUDENCE FUND is a Balanced Fund with a mandate to invest between 40-75% in equity and the balance in Debt instruments.

The Fund tends to be fully invested in Equity over all periods of time with a passive style of investment touching its peak of 75% most of time.

WORKING OF BALANCED FUND :

Due to their mandate, Balanced Funds have to maintain Asset Allocation in ratio of ,say, 70:30(Equity/Debt). This automatically ensures that whenever the Equity outperforms, the ratio raises in favour of Equity and the Fund Manager has to sell

Equity to maintain the Balance.

Likewise, when Equity markets tank, the equity ratio declines and Debt raises, and thus the Fund Manager has to sell Debt and more Equity to maintain the Balance.

This automatically ensures that the Fund Manager, invariably, is selling at higher rates and buying at lower rates.

This Asset Allocation automatically ensures superior returns over Long Term over even Pure Equity Funds.

FUND INVESTMENT PROFILE :

The Equity investment has tended to veer towards mid caps.

However, in Debt, it is quite aggressive on the lookout to take advantage of any volatility in Debt Market. It has of late started to invest more in Triple A instruments which gives more protection.

HDFC PRUDENCE FUND has been a boringly top quartile performer since a long long time. It has given Equity type returns and inspite of being a Balanced Fund, has fared better than majority of Pure Equity Funds over all all types of Market Conditions.

Its Mid cap bais in equity is offset by Debt investment and hence the volatility is not so much as to cause concern.

The returns of HDFC Prudence has been way ahead of its peers like Birla Sunlife 95, DSPBR Balanced Fund, etc.

In fact, the returns compares favourably with even Diversified Equity Funds, despite HDFC PRUDENCE FUND being a Balanced fund.

NEGATIVES :

Its huge huge Asset Size of 5800 crores could be a problem. But Prashant Jain, the Fund Manager, has shown his ability to manage such huge Asset Size even with the other funds he manages (HDFC Equity manages 8400 crores, HDFC Top 200 manages 9600 crores).

RECOMMENDATION :

HDFC PRUDENCE FUND  is a "must" in any investor's core portfolio.

HDFC Prudence Fund will provide good hedge against sharp equity falls.

If any investor wants to invest in only ONE Mutual Fund, then THIS is the Fund, the HDFC PRUDENCE FUND.

Best of luck,

Srikanth Matrubai

http://goodfundsadvisor.blogspot.com

Also visit http://equityadvise.blogspot.com

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SUNDARAM EQUITY PLUS FUND - A REVIEW AND ANALYSIS

MORE STABLE, LESS RISKY

Aiming to get the best of Gold and Equity, Sundaram Equity Plus Fund follows successful UTI Wealth Builder Series II Fund.

UTI Wealth Builder Series II has been very successful. It has beaten its Benchmark both in Positive and Negative times.
It has risen more and fallen less.

Can we expect the same from Sundaram Equity Plus Fund.... well that depends on how well the Equity portion is managed as the Gold investment does not need the skill of the Fund Manager expect in the extent of exposure towards Gold.
The Sundaram Equity Plus Fund aims to invest around 65% in Equity and 35% in Gold ETFs.

Gold, as we know, has been a star performer for the past couple of years. Gold is a counter cyclical in nature and hence an ideal asset tool in diversification.
But, going forward, Gold is not expected to repeat its Extraordinary performance and hence this fund could struggle to give Alphe returns.

Now, since the Fund Manager has indicated that he will be tilted towards Large Caps, and with balance in Gold ETFs, the Fund will not be volatile and may at best give you Par returns. If you want Alpha returns, then this fund is NOT for you.



Tax Advantage :
Since more than 65% is intended to be invested in Equities, there will be No Long Term Capital Gains Tax.

RECOMMENDATION :
Sundaram Equity Plus Fund is suitable for conservative investors who are looking to hedge their equity portfolio with Gold.

Sundaram Mutual Fund fans can sure go for this fund, others are better off by separating their investment and themselves investing in a Diversified Equity Fund and taking a SIP in Reliance Gold Savings fund which in turn invests in Gold ETFs.

Also read....
http://goodfundsadvisor.blogspot.com/2011/04/invest-in-gold-best-way.html

Alternatively, investors can consider investing in

UTI Wealth Builder Fund Series II

Axis Triple Advantage Fund

Canara Robecco Indigo Fund

Best of luck,
Srikanth Matrubai


Also visit http://equityadvise.blogspot.com

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ING FINANCIAL PLANNING FUND - A REVIEW

WANT INSTANT DIVERSIFICATION, THEN LOOK AT ING OPTIMIX FINANCIAL PLANNING FUND

ING has come out with a New Fund Offer ING Optimix Financial Planning Fund which is a Fund of Funds and aims to invest in mutual funds of AMCs other than ING.
This, according to ING people, is to help investors simplify their investment.
While on the face of it, the Fund offer and plans look confusing, the concept is good though not new.
The Fund aims to invest in carefully selected BEST OF BREED Funds from differennt AMCs  and get the best returns for your investment.
The Fund will invest in Four Different Asset Classes - Liquid Funds, Debt Funds, Equity Funds and Gold ETFs.
And, yes, the Fund will also aim to give its investors flexibility to choose from four Convenient Plans catering to Different Risk Tolerance levels.

While this isn't the first multi-manager FoF from the AMC, it is unique given its strategy of investing across the equity, debt and gold asset classes. In contrast, FoFs from other fund houses typically invest in funds from their AMC only. Besides, this is the first FoF that has an option to add exposure to gold ETFs.

MY ANALYSIS :
PROS:
1. With hundreds of funds to choose from, this Fund ensures that your job is simplified. And monitoring/switching too is not your headache as the Fund Manager will do the same as and when required.
2. Since this fund will not invest in inhouse schemes of ING, you can be sure of having his investment into the Best of Funds as the selection of funds is done purely on merit.

CONS:

1. The entire performance is based on the funds selected and how they fare.  Wrong selection of funds or delay in identifying laggard funds could affect the overall returns of the fund.
2. Similar products from the same Fund House, like the ING Optimix Multi Manager Equity Option has been very disappointing in their performance till now.
3. Additional Costs due to its Fund of funds approach.


RECOMMENDATION :
As with every fund, this fund too has its pros and cons, Passive Investors and First time investors wanting an exposure to equities, this is a Great Fund to take exposure in.
Others, your Fund Advisor could well do a better job.
Investors would however do better to 'PAY FOR QUALITY ADVISE" and invest in Different Funds of different AMCs based on their Asset Allocation, Risk Aversion which a Qualified Financial Advisor would be in a much better position to advise.

Best of luck,
Srikanth Matrubai

Also visit http://equityadvise.blogspot.com

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INVEST IN GOLD THE BEST WAY.....

While there are many ways to invest in Gold, the Mutual Fund route is the best due to transparency, low cost, liquidity, tax benefits and more.

The Ever rising Gold and Silver prices has triggered a rush to invest in these commodities and let us see which is the best way to make maximum returns through the mutual fund route.
Before that, it would be worthwhile to note what experts have to say on the future Gold outlook.

While everyone knows about the Gold ETFs like Reliance Gold Fund, Gold Bees, etc.(Gold ETFs are funds which track the value of Gold by investing in Physical Gold),  not many investors seem to be aware the difference that two Gold Funds have.
These two funds, namely AIG World Gold Fund and DSPBR World Gold Fund are actually Fund of Funds which invest in Gold Mining Companies Worldwide

The DSPBR World Gold Fund invests in the units of Black Rock world gold Fund whereas AIG World Gold fund invests in Falcon Gold Equity  Fund.
The point to be noted here is, that Gold Experts are unanimous in their opinion that the mines in South Africa are saturated and over a period of two-five years, may lose their dominance due to high cost of production.
This point makes it clear that for a LONG term investor, AIG World Gold Fund may give better returns than DSPML World Gold Fund.
Note, the Falcon Gold Equity Fund has been awarded THE BEST FUND for the THIRD Consecutive year at the Lipper Fund Awards 2011.
Another very good way to get a Gold Exposure is through Reliance Gold Savings Fund.
For more details on this you can click here………
http://goodfundsadvisor.blogspot.com/2011/02/reliance-gold-savings-fund.html

The price correlation between the Gold prices and the NAVs of the AIG/DSP World Gold Fund is not direct and tend to vary.
This is because these Funds invests in Equities of Gold Mining Funds and tend to have a time lag between the Gold price variation and Stock price variation.
These stocks normally rise than Gold price rise and fall steeper than Gold price fall.
But, regarding their Gold Fund, the performance is linked to Falcon Gold Equity Fund which in turn invests in equities of Gold Mining companies.

The difference between the DSP Black Rock World Gold Fund and the AIG World Gold Fund is this.
AIG World Gold Fund typically invests in Gold Mining Companies based in Canada and prefers mid caps.
DSP World Gold Fund typically invests in Gold Mining Companies based in South Africa and prefers Large Caps.

So, obviously, a SIP investor would make more money in AIG World Gold Fund as its NAV is more volatile.
Finally, to sum up,
My vote for the BEST way to make gains through Gold investing is through a SIP investment in Reliance Gold Savings Fund.
Best of luck,
Srikanth Matrubai

Read more: http://bizcovering.com/investing/investing-in-gold-the-mutual-fund-way/#ixzz1KAMMxVMK

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