Chat Transcript

| 16 Jun - 10:00hrs

Know more about Mutual Funds


Mehrab Irani | General Manager, Tata Investment Corporation

kank20: good day Sir!! pls advice if SIP in NIftybees is bettter investment than in Mutual funds? I am interested to invest for long term benefit. Thanks
Mehrab Irani: SIP or Systematic Investment Plan is a very popular term promulgated by mutual funds, their distributors and financial planners. Sip gives the benefit of rupee cost averaging, regularity of investment and the power of compounding. It is good to create wealth over the long term through systematic mechanical process. And if an investor does not have much time or energy than the benchmark Nifty is the best fund which offers market return and risk with minimum fund management costs
ksrinumsc: y the stock market is going down in last 3 months iam investing in mutual funds but no increase i started in march this year
Mehrab Irani: Stock markets always move in cycles due to various reasons including macro-economic, monetary, fundamental, technical, psychological etc. The market is currently going down because of various factors including earnings downgrade, fundamental deterioration in some companies / sectors, international problems etc. The important thing is to stay invested during bad time so that you can reap the benefits during good times.
guest: I have holdings in two mutual fund houses in each - ELSS, Large cap, Debt mutual funds. Would it also help if I also have balanced fund holdings?
Mehrab Irani: The name of the Fund is Balance but it is the most effective of all the funds as it takes the credit of protecting and shielding your money of all the five investment robbers – inflation, interest rate vagaries, stock market volatility, income taxes as well as incorrect asset allocation. So yes, one should certainly allocate money towards Balance Funds.
guest: how much return can we expect in large cap equity mutual funds for 10 year period. can we expect 5 fold return or more??
Mehrab Irani: If the Indian real GDP grows around 8% p.a. for next 10 years and nominal GDP by close to 13% p.a. than earnings should grow between 18% to 20% CAGR over next 10-years and that should be the likely return from an average equity fund.
guest: i wont invest 50000 rs for long teum. please know best mutual fund i buy . and also sip 4000 per mont
Mehrab Irani: You may buy any good large or multi cap fund from a fund house as well as fund manager which has a track record of atleast 10 years and seen through couple of market cycles.
guest: is sit the right time to invest bulk ij MF
Mehrab Irani: If you believe in long term India growth story and the power of e equities to compound your wealth than any reasonable correction is a good entry point for an investor
guest: suggest me MF for a period of 20 years in SIP mode. Thank you
Mehrab Irani: You may buy any good large or multi cap fund from a fund house as well as fund manager which has a track record of atleast 10 years and seen through couple of market cycles. Avoid any sector or theme based funds because themes come and go and you may never know today’s hot sectors would remain hot or no tomorrow. Trust the market and invest in the market.
guest: i have invested in debt mutual fund in 3 or 4 3 month back different scheme ,but found almost all in loss .Are debt mutual fund also have risk.
Mehrab Irani: Debt mutual funds carry interest rate and credit risk. We may understand credit risk but interest rate risk is not understood by most investors. Fund houses and their distributors wrongly sell debt mutual funds as safe investments. They wait for the rally in interest rates to happen and then erroneously annualize a market based return which they should not do and then show huge annualized return to lure in debt investors. There was substantial rally in bond prices last year which peaked almost 6 months back. You have entered at wrong time in debt market. Having said that, you should now have patience and hold on for 1-year and you would good average return from your investment date.
guest: At present i hav SIP in 3 equity and one midcap fund. I wish to add further around 10k per month in SIP, please advise which SIP/FUNDS should i go for ...my horizon will be 8-10 years.
Mehrab Irani: Since you already have investment in equity and mid-cap funds you may now consider adding a Balance Fund to your portfolio which will give you better stable tax efficient return over long term throughout various business and market cycles
guest: How to chose the best mutual fund in the current market?
Mehrab Irani: As while choosing anything in life, there is nothing like one best MF or single answer. Rather than simply looking at recent past returns, look at the past 10-year track record of the fund house, fund manager, fund scheme, has the scheme actually followed in spirit what they had promised in the offer document, does the scheme keep changing its positioning unnecessary with small changes in market etc. if you are still confused than just invest in an index based fund which will give you average market returns with lower fund expenses and assuming only market risks.
guest: which mf is best currently situation Birla sun life mnc or UTI mnc
Mehrab Irani: I don’t recommend any sector or theme based funds as they are launched and marketed when they are in flavour. So I cannot comment on these funds.
guest: i have invested 1000 /month in Hdfc top 200 (G) from last 5 year . Should i carry on the SIP or move to some other fund. please suggest . I am planning to sell the units , is this the right time to sell.
Mehrab Irani: This is a good index plus kind of fund. If you don’t require the money currently than today may not be the best time to sell out. I will suggest you to hold on and you should be able to generate decent returns from it.
salhandevinder: Sir Please tell me that Is good to invest in stocks by monthly SIP system or I mutual funds by SIP I want to invest 30,000 per month in stocks or mutual funds
Mehrab Irani: SIP is a good form of systematic forced mechanical form of investment which gives benefit of compounding over long term. If you have the time and expertize and can create a portfolio of stocks than you can do SIP in stocks directly or MFs might be an easy and convenient form of doing it.
guest: How to find in which mutual fund to invest and what are the terms meant by - mid cap,blue cap?
Mehrab Irani: Just avoid the funds which have fancy and crazy names. Simple works the best in life and very much in the investment world. If you can’t understand something than don’t commit your hard earned money in it. Just invest in Index based funds
guest: Good Day Sir!!! I want to invest in mutual fund through SIP. I want to know, is it right time to invest in mutual fund? Could you please suggest 4-5 different plan for SIP.
Mehrab Irani: Any time is a right time to do a good work and investing for our own future and financial freedom is a best gift which we can give ourselves. Volatility and market corrections are always best time to invest as they give us the opportunity to purchase good quality stocks at reasonable price and valuations.