MF Investment Help

fund for 1.5 years

Posted by : round rock

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.

SIP (or) Timing the Market

Posted by : vvrk

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

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 ?

MF Folio evaluation help

Posted by : ashalanshu

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

MF Folio evaluation help

Posted by : pcspune

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

MF Folio evaluation help

Posted by : ashalanshu

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

SIP (or) Timing the Market

Posted by : vvrk

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

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 ?

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.

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 \\\\

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

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.

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

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