Chat Transcript

30 Apr - 03:00 hrs

Hemant Rustagi | CEO, Wiseinvest Advisors

How to pick the right Mutual Fund for investing?

Chat Transcript

srikumar1976: Hi, I am investing in ICICI Pru Focused Bluechip, Quantum Long Term eqty, SBI Emerging Business,HDFC Midcap Opportunities,SBI FMCG, SBI Pharma, ICICI Pru Bkg & Fin Services. Please guide me about my Portfolio? I want to invest in these for 5-6 years.

Hemant Rustagi: Broadly speaking you have a combination of quality funds. However, considering that your time horizon is 5-6 years, the portfolio composition is quite aggressive. My suggestion would be to pare exposure to some of the sector funds like SBI FMCG and pharma and invest that money is existing funds like ICICI Focused bluechip fund and SBI Emerging business fund.

guest: sir, may i now invest in gold etf/or mutual fund gold? will it be profitable within one year.

Hemant Rustagi: Gold certainly has a role to play in the portfolio. However, it may not a wise thing to invest with a time horizon of one year. If you can extend your time horizon to say 3 years and do not already have high exposure to gold, you can go ahead. If you do not have an existing demat account, investing in a gold fund would be apt.

guest: i was switched from reliance vision growth to reliance equity opp growth, was it a right move or wrong?

Hemant Rustagi: Based on the past performance as well as the investment philosophy of both these funds, you seem have made the right decision.

guest: amol kuwar: I have invested in sbi infrastructure fund series ii.what can i do, I want to start SIP for my child future plz advise 2 funds for him.

Hemant Rustagi: My recommendation would be to switchinto SBI Magnum Emerging business fund, provided you have some existing investment in eithe large cap fund or large cap oriented multi-cap fund. For you child`s future, it could be combination of a pure large cap fund like ICICI Pru Focused bluechip fund (60%) and a mid-cap fund like IDFC premier equity fund.

guest: Hi, i need mutual fund to invest as SIP for 2-3 yrs . kindly suggest best MFs.

Hemant Rustagi: Investing for a period of 2-3 years would mean an average holding period of around 18 months.For a time horizon like this a pure debt fund like IDFC Dynamic bond fund or Reliance Dynamic bond fund would be ideal.

guest: i have invested with the mirae asset india opportunities fund in 2011 and got decent returns. but should i hold it further or sell it now?

Hemant Rustagi: This fund has been doing well. If you have been investing in this fund for a specific objective and time horizon, you can continue to hold it. Remember, the decision you need to take is whether you should be in equity or not.

guest: Hi, I am investing in HDFC TOP 200, HDFC EQUITY & IDFC PREMIRE EQUITY THROUGH SIPS. THE TOTAL SIPS AMOUNT IN ABOVE SIPS IS RS. 5000/- MONTHLY. Please guide me about my Portfolio? I want to invest in these for 20 years.

Hemant Rustagi: You have selected you funds well. Although HDFC Top 200 and HDFC equity have slowed down a bit, these are quality funds and are likely to d owell in future. Another thing that you need to remember is that the key to investment success is in time commitment and hence you must continue your investment process irrespective of the market conditions.

vishalsym: I am investing 10K/mpnth in MF. How long should I continue investing in the current market situation?

Hemant Rustagi: Making investment decisions based on the current market scenario is not a wise thing to do. If you began investing in the existing funds with a defined time horizon, my recommendation would to do it now. This will prepare you to hold on to these investment even during the most turbulent times and hence you would benefit in the long run.

guest: Hello sir. Can i have a portfolio of equity funds and sector funds? How many sector funds should i have and how much share in the MF portfolio? I am willing to take the risks in sector funds. kindly advise is SIP better or lumpsum better in sector funds investments?

Hemant Rustagi: Sector funds are certainly a good addition to an experienced equity investor as they allow them to benefit from the growth in the chosen sectors. Despite being aggressive by nature, investors can benefit from diversification within the sector. However, if you are a new investor and looking to build a corpus over time, the bread and butter funds in the portfolio should be well diversified funds. Don`t foreget, equity as an asset itself is aggressive and hence making your portfolio more aggressive may not be the right thing to. After all, one must try to create a balance between risk and reward.

guest: None of the funds from sundaram mutual fund is performing , what is happened to them ?

Hemant Rustagi: Sundaram MF`equity oriented funds have not been doing well for the last few years. It could be becuase of changes in the fund managers during a certain period as well as the result of some aggressive dividend payouts during the market downturns.

faiza_haqs: Reliance Growth Fund - RP (G) HDFC Balanced Fund (G) HDFC Capital Builder Fund (G) ICICI Pru Discovery Fund (G) Reliance Small Cap Fund (G) HDFC Prudence Fund (D) (8) DSP-BR India TIGER - RP (G) Birla Sun Life Equity Fund (G) I have been holding these funds for a year long. But non of them doing good. Pls advice, I want to Invest about 25L for the next 6 months. Pls advice.

Hemant Rustagi: You certainly need to make a few changes in your portfolio to improve its performance. For example, you can switch Reliance small cap fund into reliance equity opportunity fund. You can exit from DSPBR TIGER and Birla Sunlife equity fund and reinvest the same in funds like Birla Sunlife Frontline equity and Canara Robeco Equity Diversified fund. Also you need to remember tha during market volatilities, the performance of equity funds suffer. Therefore, the key is to keep monitoring the performance of the funds in the portfolio and keep focus on your time horizon.

guest: Hemant, I am currently investing in HDFC Top 200 & Balanced Scheme, DSBBR Top 100 & FT Blue Chip fund through SIP. Please advise if I should diversify by choosing some sector oriented/mid small funds as I plan to start additional 3-4K investment through SIP

Hemant Rustagi: Your scheme selection is good. However, the portfolio is dominated by funds investing in large cap stocks. There is a need to include funds like IDFC Premeir equity fund and Reliance equity opportunity fund to enhance exposure to mid-cap stocks. I will also recommend to exit from DSPBR Top 100- not becasue it is not a good fund, but to create the right balance between exposure to different segmetns of the equity market.

guest: SBI emerging fund i s a small and midcap fund- Will the sector grow ? Is it advisable to invest lumpsum in the fund now?

Hemant Rustagi: It is a quality fund. However, considering its nature, one should not be having too much exposue in this fund. Broadly speaking, the exposure to mid-cap and small cap funds should not be more than 10-15 percent of the equity portfolio.

Tgt2M: Dear Sir, please recommend some debt funds where we can get returns closer to bank FD rates. (Iccome / Gilt / any long term debt fund). Thanks in advance.

Hemant Rustagi: In the current sceanrio, if you have a time horizon of 18-24 months, you can consider funds like ICICI Dynamic bond fund, Relaine dynamic bond fund, Kotak bond fund and SBI Magnum Income fund.These have the potential to offer higherthan FD returns but you must be prepared to face volatility in the performance from time to time.

mh_vohra: I am investing Rs.12000/- per month in Reliance equity Opportunities Fund - Growth and IDFC Premier Equity Fund- Growth since 2009. i can be invested for 10 years from now. My Fund selection is good or should i switch to another fund ?

Hemant Rustagi: Both are good quality funds. However, if these are the only funds in your portfolio, I would like you to include a pure large cap fund.

guest: can we invest in kotak mutual fund????? is there any risk????

Hemant Rustagi: Why not? Kotak MF has some of the best performing debt funds. Some of the equity funds too have been consistent performers.

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