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MF Investment Help
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Dear round rock,
The features in HDFC Endowment Plan that you took about 2 years back were good. It is always better to increase your premium or top-up your existing plan rather and taking a new one. The top-up charges are going to be less compared to premium allocation charges of a new plan.
Fund houses do give you the option to reduce your insurance cover. There are some clauses though. The minimum insurance cover should be the higher of (0.5 * term * yearly premium) or ( 5 * yearly premium). You might want to speak to your insurance agent to find out if reduction in sum assured is offered by HDFC and by how much you can reduce your sum assured. But before you reduce, I would advise you to check if you are adequately insured. Use the Human Life Value calculators available on the web. I prefer the one from personalfn site.
Also please be aware that expense ratio for Templeton India Pension Plan is not less. It is 2.15% which is actually high for a fund that invests 60% is debt. TIPP also has an exit load of 3% if you withdraw before 58 years of age.
The following is the comparision that I can think off.
TIPP (no entry load), HDFC EP (1% entry load since you are already invested and henced already paid the high first year charges)
TIPP (3% exit load before 58), HDFC EP (No exit load)
TIPP (2.15% expense ratio), HDFC EP (0.80% FMC)
TIPP (Fixed debt equity ratio), HDFC EP (asset allocation possible upto 100% equity and debt exposure)
TIPP (LTCG taxes on redemption), HDFC EP (No taxes on redemption if invested for 5 years)
TIPP (10.49% 3 year returns), HDFC EP (Equity Fund - 25.09%, Balanced 30 to 60% equity - 15.64%, Balance 15 to 30% equity - 10.08%)
So except for the entry load part, HDFC EP scores over TIPP in all other factors. Performance wise to in the past 3 years, HDFC EP seems to be better than TIPP even if we consider the balanced fund with max 30% equity exposure.
I would advise you to use your HDFC Endowment plan for your pension needs rather than TIPP. You might want to consider increasing your premium contribution to HDFC Endowment Plan and stop SIP in TIPP. Reduce your insurance component if you think you are adequately insured and do not need the additional insurance cover offered by the ULIP.
Please also consult others before you take a decision. A pair of eyes is always better than one.
Thanks,
Raj...
In reply to:
SIP (or) Timing the Market
Posted by :
round rock
thanks ashal
one point about charges. with higher charges (allocation, mortgage, admin etc) the returns would be lesser in ULIP compared to TIPP. I am not paying any entry load and the FMC is vey low in TIPP. In long run, lower FMC makes lot of impact on the total returns. the question is does it outeigh the tax loss (on 2/3 of retrns, you are a senior citizen with less income and probably in lower tax bracket).
also i have HDFC Endoment scheme (2 years back) where the charges are very low compared to the current scheme Plus 2. does it make sense to go for top-up instead of stating a new plan with same fund house. ith top-up, i get the same lower charges with old fund. only issue is i had gone 40 times insurance. if i am vieing this for both insrance and retirement, then its not meeting the need. is it possible to reduce the insurance coverage ? to get more returns ? 
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thanks ranjan, right now i am at 10.75 (revision due in october) at hdfc, my loan is above 20 lakhs. i dot see much diff with PnB....
In reply to:
fund for 1.5 years
Posted by :
RANJAN
Punjab National Bank is charging 10% upto 20 lakhs and 10.5% on amount above 20 lakhs. Try shifting the loan to that bank.
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thanks ashal
one point about charges. with higher charges (allocation, mortgage, admin etc) the returns would be lesser in ULIP compared to TIPP. I am not paying any entry load and the FMC is vey low in TIPP. In long run, lower FMC makes lot of impact on the total returns. the question is does it outeigh the tax loss (on 2/3 of retrns, you are a senior citizen with less income and probably in lower tax bracket).
also i have HDFC Endoment scheme (2 years back) where the charges are very low compared to the current scheme Plus 2. does it make sense to go for top-up instead of stating a new plan with same fund house. ith top-up, i get the same lower charges with old fund. only issue is i had gone 40 times insurance. if i am vieing this for both insrance and retirement, then its not meeting the need. is it possible to reduce the insurance coverage ? to get more returns ?...
In reply to:
SIP (or) Timing the Market
Posted by : ashalanshu
Dear Round rock, The ULPP with Templeton is known as Templeton India Pension Plan (TIPP). In MFs space only 2 ULPPs r available. 1 is TIPP & another one is offered by UTI, Retirement Benefits Plan (URBP). On the performance basis, TIPP is much consistent & had superior returns to URBP.
Regarding Whole life ULIPs or age 75 ULIPs to be used as Pension Plans, I\\`m still researching. Most of the ULIPs r hardly 4-5 years old & that coincides with the great Indian BULL Run. So performance of these ULIPs over prolonged bearish phase is yet to be tested.
Once I\\`m thru with my research, i\\`ll definitely post my findings here.
On the basis of FMC & mort. charges & 24 free switching option every year, the new ULIP offered by HDFC - Endowment Plus -II may be a suitable option. I repeat \\\\
Tracked by: 0 Boarder
Dear nadar33,
You may Discontinue SIP & switch in following Funds.
DSPML Opportunity to DSPML Equity
Fidelity Equity to DWS Investment Opportunity Fund
FIBCF & Franklin Flexicap to Templeton Equity Income Fund
HDFC Equity to HDFC Growth
Reliance Equity Opportunity & Reliance VISION to Reliance GROWTH
Sundaram Select Midcap to DWS Investment Opportunity Fund
P.C.Sharma
...
In reply to:
MF Folio evaluation help
Posted by :
radnar33
Dear Experts out there
I have been investing in to Mutual Funds for past 5 years and following is my porfolio built largely on SIP. Although the funds are distributed among 3 of us, I realise its a collection of far too many funds. I would be grateful for a Portfolio evaluation and suggestion for change towards Growth. My target is maximum growth possible ( Rs 1 Crore). I have 3 to 5 years time frame affter which I may need income from the funds. Total vested corpus is Rs 2200000. I am currently investing Rs 9500 a month in the way of SIPs till Mar 09 and am able to add another 8000 more from September 08 onwards.Grateful for guidelines. I would like 70 Equity & 30 Debt Allocation. Thank you. My funds are as follows.
EXISTING FOLIO as on 31-Jul-08
Mutual Funds - 66.92 %
Company Deposits 11.96 %
Post Office 7.48 %
Bank Fixed Deposits 13.64
Mutual Funds & Shares
DSPML Equity - DR – SIP 2000 3.33
DSPML Opportunities - DR 3.40
DSPML T.I.G.E.R - 3.40
DSPML TIGER 3.40
Fidelity Equity - 1.63
FIBCF 4.48
Franklin India FlexiCap Fund 7.02
Franklin India Prima Plus - 3.98
Franklin India Prima Plus 2.04
HDFC - Equity – SIP 1000 7.75
HDFC Top 200 - 1.37
HSBC - Equity - SIP 1000 1.83
ICICI Infra Struc -SIP 1000 0.27
Kotak 30 - SIP 1000 0.27
Kotak Opprtunities - 2.20
SBI-Magnum Contra-SIP 1000 1.09
Reliance Equity Oppor 0.82
Reliance Growth - 2.58
Reliance Vision - SIP 1000 6.39
SundaramCapex Oppor-SIP 1500 6.43
Sundaram- Energy Oppor 3.40
Sundaram Select Focus - 6.46
Sundaram Select Mid Cap 9.51
TempletonIndiaEquityIncome 7.64
Tata Infrastructure Fund 1.36
Tata Equity Opportunities 3.40
REL PETRO (400) 3.92
REL POWER (24 Shares IPO) 0.44
UCO BANK (100 Shares ) 0.21
Tracked by: 0 Boarder
Dear friend, First of all Insure ur life thru pure term plans as per ur requirement say 10L or 15L or 20L to avoid derailment of ur planning for ur daughter if anything mishappens to u. the money received from Term insurance 'll be there to fulfill ur dreams in ur absence.
Plz. for ur own sake, don't buy any so called Child Ins. plans. Plz. keep the insurance & investment things distinct from each other. For Insurance I already advised to take Term plans.
For investment, plz. investment in following MFs thru SIP of 1K in each fund.
HDFC Top 200
Principal children benefits plan
Sundaram select Focus
For ur 1L, invest in following 4 funds.
DSP ML Eq.
DSP ML Top 100
Rel. Grwoth
DWS Investment opportunity
for above 4 funds invest 50K Rs. in Liquid + fund of DSP & 25K each in Liq. + funds of reliance & DWS. From these Liq. + funds invest in the above mentioned Eq. funds using weekly STP of 1K. This 'll give u better cost averaging under current market condition.
Review the performance of ur funds after a year & make corrective action if required.
Thanks
Ashal...
In reply to:
investing for my daughter
Posted by : Guest
I would like to start a SIP of Rs3000 per month for my year old daughter. Pls suggest if I should go in for a childrens plan, ULIP or MF & which one. I also want to invest a sum of Rs one lac for her. Pls help as I am confused with all these investment plans.
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Dear radnar33, I always tell people to post all the relevant data while seeking help. Now as u posted ur age (53), in ur reply message, My advise 'll be to go for a conservative ratio of 30:70 as u planned originally for sake of safety of ur capital.
Here i assume u r going to retire by 60. so total u have 7 more years for new investment (read SIP). Continue ur current SIPs. One more thing u forget to mention about "3 of us". I assume it is U, ur wife & ur child. As per ur unfinished data here i assume, ur tax liability is nil as major part of ur Company FDs must be in the name of ur wife, which most probably is a house wife.
Inform me if my guess is wrong.
I'm unable to understand ur data regarding company deposits.
As per the prev. info the amount deposited in Company Dep. is around 263120. On this corpus u r getting 15500 Rs. per month, which translates into 5.58% per month return. or 98.74% annualized compounding returns. R u sure about ur data? I have a doubt about it? Plz. check the same & inform.
Some more info is required from ur side, that's why i'm not advising on ur existing portfolio at present. In my view all the relevant info should be known before advising.
Thanks
Ashal...
In reply to:
MF Folio evaluation help
Posted by : radnar33
Dear Ashal...Thank you much for the reply. The Company deposit generates Rs 15500 (pre Tax....but will be 0 Tax liability) monthly for next five years....with a return of 69% pa for the 1st 4 years...and 107% the 5th Year....This is only partially committed to the additions to MF Investments from Sep 08 onwards.....if I am able to add another 7000 from Oct 08 onwards for next 5 years...I think I may have slightly a better chance towards 1Cr in may be 7 yrs or so....wonder if that is realistic.I would also be grateful for your input on revamping the folio (You may review Ashport's reply on this)......considering I am ok with 20/80 ratio rather than 30/70. But at my age (53) I wonder whether sticking to 30/70 may be wise. Besides I may have longer than 5 years before I may need income from the corpus. Thank you...Radnar33
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Dear friend, Normally an investor should have following break up in terms of total no. of MF plans.
3 Large cap
1 Mid cap
2 Multicap, diversified, opportunity
1 sectoral
1 balanced
1 speciality fund (here i mean gold funds or global funds to reduce over all risk).
total 8-9 funds r sufficient in any portfolio for a long term growth. the large cap funds should form the core of ur portfolio, hence the over all exposure to this category should be around 50-60%
Mid cap 10%
Multicap - 15-20%
Sectoral - 5-10% but zero before 3-4 years of retirement.
Balanced - initially zero if investors age is in 20s & should increase with age & by the time the person retires, it should be around 40%.
Speciality - 10% of ur initial portfolio.
Plz. note i have not used the word Ideal, as nothing can be ideal for everybody. U may take ur own break up & invest accordingly to reach ur goal post.
Thanks
Ashal...
In reply to:
LargeCap Funds
Posted by : Guest
Hello,
I’m a long term investor with a perspective of at least 10 years. How many Large Cap funds should one have? Sundaram Select Focus, DSP Top100, HDFC Top 200 & Birla Frontline Equity - should one have all these 4 Large Cap Funds or any 1, 2 or3? My Portfolio comprises 2 Large Cap Funds - Sundaram Select Focus & DSP Top100 (out of total no. of 6 funds). If I add HDFC Top 200 & Birla Frontline Equity to my Large Cap funds, wouldn’t it be like buying the same shares; bcoz the FMs of these Funds might have bought almost similar shares. Kindly advise.
Long Term Investor
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Dear Guest Since you have not disclosed your portfolio ( which six funds are you invested in)it is difficult to comment. However you can have one more large cap fund in your portfolio.as far as choice between HDFC Top 200 and Birla Sunlife Fr Eq Fund is concerned both are large cap fund , both are benchmarked against BSE 200. Both are conservative fund with Birla Sunlife little more conservative as can be seen from their portfolio. While HDFC Top 200 is 98 % invested in equity, Birla is 78% in equity and balance in debt and cash(as per July portfolio) . As such seeing the present volatile conditions of market I would suggect you to go for Birla Sunlife Fr Eq for sip investment. However u can split in 2 SIPs for better cost averaging.
Regds
Ashport...
In reply to:
LargeCap Funds
Posted by : Guest
Hello,
I’m a long term investor with a perspective of at least 10 years. How many Large Cap funds should one have? Sundaram Select Focus, DSP Top100, HDFC Top 200 & Birla Frontline Equity - should one have all these 4 Large Cap Funds or any 1, 2 or3? My Portfolio comprises 2 Large Cap Funds - Sundaram Select Focus & DSP Top100 (out of total no. of 6 funds). If I add HDFC Top 200 & Birla Frontline Equity to my Large Cap funds, wouldn’t it be like buying the same shares; bcoz the FMs of these Funds might have bought almost similar shares. Kindly advise.
Long Term Investor
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Dhirendra Kumar is only saying that Reliance Growth is the best performer in the Reliance MF. It does not mean that your first investment should go to Reliance Growth. After investing in large cap & balanced funds - when you are choosing a midcap fund Reliance Growth should be your first choice....
In reply to:
Which is the best Fund from the Reliance stable?
Posted by : pyaraharsh
Hello sir,
In my opinion, SIP should be started in a fund with below average risk and above average returns. Reliance Growth is a Midcap fund, having good past record but In my opinion Reliance RSF equity fund is better choice than Reliance Growth.
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Hello sir,
In my opinion, SIP should be started in a fund with below average risk and above average returns. Reliance Growth is a Midcap fund, having good past record but In my opinion Reliance RSF equity fund is better choice than Reliance Growth. ...
In reply to:
Which is the best Fund from the Reliance stable?
Posted by : MMB Messenger
Dhirendra Kumar, CEO of Value Reasearchonline feels that though investing in SIPs (Systematic Investment Plan) is a good idea, one should do a periodic review every year to keep a sense that his investments are still on tracks. He thinks the most impressive fund from the Reliance stable is the Reliance Growth Fund.
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Dear Wadiaji,
Everyone deserves a break. You too are having the same. Enjoy it. Eagerly waiting for your expert gyan on mutual funds. Have a great time.
Regards,
Srikanth...
In reply to:
A break from MF & Market
Posted by :
wadia
Hi, Dear all.
Well, I was away from this message board for a few weeks as I with my family had come down to Mumbai from Dubai and were quite busy with travelling and meeting relatives and friends.
Hi, Mr. Ranjan, Ashal, Sharmaji and Shrikanth, Hope things are going as usual with you all helping hands of MF investors. I can also see some changes in the way this message board has been modified for better ease of communication. I still though have to get used to it.
Pls. feel me in of any new devolpments in the world of MF. I would start actively participating in this board once I am back in Dubai. Till then I intend to enjoy my remaining 2 weeks of holidays to the fullest.
Regards,
Wadia
Tracked by: 0 Boarder
Dear Sir,
Now, that an acclaimed Mutual Fund expert also has dismissed as \"not good\", the Free Insurance from Reliance sip insure, it is time, investors looking at the combo of insurance and investment, look at either Birla sunlife Century Sip or DWS Tax Saving Fund.
Both these funds too offer free life insurance and at a lesser cost than Reliance.
But, of course, as Dhirendra Kumar, if your investment is for \"pure returns\", then there is nothing to beat Reliance Growth Fund. A must-have in any portfolio.
Regards,
Srikanth...
In reply to:
Which is the best Fund from the Reliance stable?
Posted by : MMB Messenger
Dhirendra Kumar, CEO of Value Reasearchonline feels that though investing in SIPs (Systematic Investment Plan) is a good idea, one should do a periodic review every year to keep a sense that his investments are still on tracks. He thinks the most impressive fund from the Reliance stable is the Reliance Growth Fund.
Tracked by: 0 Boarder
Ashport......Thank you for your detailed reply.Your suggestions seem quite good at a glance...however let me work out the nitty grittys as the funds are distributed among 3 of us.....and come back to you with my questions....and revamped holding %.....glad you seem to think no total exit of any of the Fund folio.....Thank you.....Radnar33...
In reply to:
MF Folio evaluation help
Posted by : ashport
Dear radnar33
you have accumulated too many funds which you are also realizing now.
My suggested portfolio would be:
DSPML Equity....Continue SIP
DSPML Opportunity....Switch to DSPML Equity
DSPML TIGER..........Switch to DSPML Equity
Fidelity Equity......Stay invested
Franklin India FlexiCap Fund...Swich to Templeton India Eq Income
FIBCF................Switch to Templeton India Equity Income
Franklin India Prima Plus...Switch to Templeton India Equity Income
HDFC - Equity –...stop SIP & switch to HDFC Top 200
HDFC Top 200 - ........stay invested
HSBC - Equity - SIP 1000 1.83...continue SIP
ICICI Infra Struc -SIP 1000 0.27...continue SIP
Kotak 30 - SIP 1000 0.27 .....continue SIP
Kotak Opprtunities - 2.20.....Switch to Kotak 30
SBI-Magnum Contra-SIP 1000 1.09 ...continue SIP
Reliance Equity Oppor 0.82.......Switch to Reliance Growth
Reliance Growth - 2.58...........Stay invested
Reliance Vision - SIP 1000 6.39...Stop SIP & switch to Rel Growth
SundaramCapex Oppor-SIP 1500 6.43...Switch to Sundaram Select Focus
Sundaram- Energy Oppor 3.40.....Stay invested, but monitor regularly
Sundaram Select Focus - 6.46.....Stay invested
Sundaram Select Mid Cap 9.51.... Switch to Sundaram Select Focus
TempletonIndiaEquityIncome 7.64....Stay invested
Tata Infrastructure Fund 1.36 ....Stay invested
Tata Equity Opportunities 3.40...Switch to Tata Infrastructure
While switching from HDFC Equity and Reliance Vision, switch after completing 12 months of your last SIP only. while switching just take care of exit loads and STCGT .Now your portfolio consists of 12 funds which is somewhat manageable.I have not suggested for staying invested in Sundaram Energy fund as it is anew fund. Just watch its performance and then decide after 1 yr.
Monitor ur investment after every 2-3 months and rebalance as per ur asset allocation.
Happy investing
Regds
Ashport
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There are many, but BEST is RELIANCE GROWTH....
In reply to:
Which is the best Fund from the Reliance stable?
Posted by : MMB Messenger
Dhirendra Kumar, CEO of Value Reasearchonline feels that though investing in SIPs (Systematic Investment Plan) is a good idea, one should do a periodic review every year to keep a sense that his investments are still on tracks. He thinks the most impressive fund from the Reliance stable is the Reliance Growth Fund.
Tracked by: 0 Boarder
Dear Ashal...Thank you much for the reply. The Company deposit generates Rs 15500 (pre Tax....but will be 0 Tax liability) monthly for next five years....with a return of 69% pa for the 1st 4 years...and 107% the 5th Year....This is only partially committed to the additions to MF Investments from Sep 08 onwards.....if I am able to add another 7000 from Oct 08 onwards for next 5 years...I think I may have slightly a better chance towards 1Cr in may be 7 yrs or so....wonder if that is realistic.I would also be grateful for your input on revamping the folio (You may review Ashport's reply on this)......considering I am ok with 20/80 ratio rather than 30/70. But at my age (53) I wonder whether sticking to 30/70 may be wise. Besides I may have longer than 5 years before I may need income from the corpus. Thank you...Radnar33...
In reply to:
MF Folio evaluation help
Posted by : ashalanshu
Dear radnar33, Either prune down ur return expectation from 1C to 50-60L or invest for next 10 years to have a corpus of 1C, with following conditions.
Debt part in absolute no. term \\`ll remain as it is. hence due to future SIPs ur Eq. debt ratio \\`ll move away from current 67:33 to 80:20 or even 85:15 over the period.
1. Return on Eq. MFs & direct Eq. = 15% over all CAGR. assumed
2. Company deposit = 11% (pre tax return)
3. Bank FDs = 10% (Pre Tax return)
4. P.O. = 8% (Pre Tax return)
ur current portfolio of 22L \\`ll be appx. 41.3L as per above returns after 5 years. Ur SIP in Eq. MFs of 17500 from Sept. 2008 to next 5 years \\`ll generate a corpus of appx. 15.43L. total corpus at the end of 5 years from now onwards appx. 56L Rs. If u stick to to ur future investment in a Eq. debt ratio of 70:30 as u desired ur actual returns may be around 48-50L Rs. only.
first decide on the above matters then only decide to restructuring of ur portfolio as per ur future financial requirement.
Thanks
Ashal
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