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  • Mehrab Irani

    11 Oct - 11:00hrs

    Know more about Mutual Funds

    Mehrab Irani General Manager, Tata Investment Corporation

Posted By: guest:

Which option is better, Dividend payout or Growth?

Posted By: Mehrab Irani

: It really depends whether you require regular income in the form of dividends or want to allow your money to compound by letting the gains in the funds being reinvested in the fund itself so as to gain from the power of compounding. The tax treatment for dividend and growth would be different and you would have to examine it based on your income status and tax bracket as well as the type of fund viz., equity or debt.

Posted By: guest:

Hi, I wanted to ask a question regarding SIP, I am 20 years old and I just started working for a software company, I want to start investing in SIP as early as possible to make most of the power of compounding, so what would be the right amount to start with, I make 45Kmonth. And which will be the right funds to start with?

Posted By: Mehrab Irani

: Its heartening to know that you want to start investing and planning about your financial future. The more earlier you start, the more the power of compounding will play in your favour. The broader asset groups of equities, bonds and commodities will lead you to the gateway of long term wealth creation and sustenance. You should create a proper mix of asset which offers above average return for well contained risk. Even if the individual constitutions of the portfolio might be risky but the overall portfolio will carry substantially lower risks. I would suggest you to allocate between a mix of multi cap equity, mid cap equity, Balance and some amount in money market funds for your emergency contingencies. Do your investments through the SIP mode so as to tide over volatility and minimize the emotional content in investments.

Posted By: guest:

I am investing in Equity MF last couple of years around 30Kmonth. I am also investing in PPF every year. I am expecting around 10L in couple of months. Should I invest further in MF (lump sum or at once)? Can I look at balance funds?

Posted By: Mehrab Irani

: Balance Fund is always a great option for investing as it shields and protects ones investments from all the major hazards inflation, income tax, interest rates, market volatility and incorrect asset allocation. It is perhaps the only fund in which even the 25% to 40% debt portfolio gets treated as equity for tax purposes. PPF is good and one should continue as its in the EEE category and generally gives above market interest rates at any point of time.

Posted By: guest:

Hi sir, I am new to MF, right now I am planning to invest 8K Rs per month.In longterm investment, which are best mutual fund. -Siva

Posted By: Mehrab Irani

: Since, you are new to mutual fund investing, I would suggest, depending on your risk profile, as well as your short, medium and long term goals, to invest in a mix of large of multi cap funds, balance funds and some amount in short term bond funds so as to create a portfolio of funds which has manageable risk, contained volatile and above average returns.

Posted By: guest:

I need to invest around Rs.10 lakhs in mutual funds for long terms (atlest 3 yrs) kindly let me know schems that i should invest in if you require any further clarification to answer my querry then kindly ask. awaiting your reply

Posted By: Mehrab Irani

: Since, you are planning to invest Rs.10 lakhs lump sum in mutual fund for 3 years than you should allocate between large cap, multi cap and balance funds. After the completion of 2 years, do systematic transfer every month from the equity and balance funds to liquid funds so as to protect your gains and accumulated corpus towards the end of your investment time horizon.

Posted By: guest:

If I want returns of around 20 in 6 months, which mutual funds should I prefer?

Posted By: Mehrab Irani

: I believe your question is to get 20% absolute returns from mutual funds in 6 months. I think if such is your aim and target than it would be better if you dont invest in mutual funds because MFs are for long term wealth creation and no one can with any certainty predict its return over the short to medium term. Over the long term, some approximations for growth and return can be made with some degree of confidence.

Posted By: guest:

Hi, I am a beginner in the investment market and was planning to invest in DSP BlackRock Tax Saver fund with Rs. 15,000 lumpsum as of now for three years. Can you please advise if this is the appropriate time for investment and i can look forward for DSP fund. Thanks !

Posted By: Mehrab Irani

: Any time is an appropriate time for investment in mutual funds because in the long run its not the timing but the time in the market which will determine ones return. The fund which you have mentioned is a tax saver fund and if you want to avail the benefit under Section 80C of the Income Tax Act than you may invest in such a fund or if you are looking for general investments than there is a whole lot of schemes and funds in which you may invest.

Posted By: guest:

hello sir, Is it good to start investing in reliance small cap fund via sip at this time?

Posted By: Mehrab Irani

: As mentioned earlier, its always a good time to invest as the more early you start the more ready you are to face volatility and let money work for you through the power of compounding. The fund mentioned by you is a small cap fund which essentially invests in small companies which may have higher growth but also carry higher risk. A proper asset allocation between various classes of funds might be wiser to improve the risk-return profile of your investments.

Posted By: guest:

Hello Mr. Irani I wanted to know your view about Ethical Funds. There are a few Ethical Funds in the market like Tata Ethical Fund, Taurus Ethical Fund etc. Could you tell me about the investment philosophy and how you pick stocks for these kind of funds? They seem to be lagging behind the category and benchmark, even a 5-year perspective. So, why would this happen in a raging bull market such as the current one? Regards Asar

Posted By: Mehrab Irani

: Depending on which fund it is, ethical funds generally have some restrictions on their investment portfolio like say not invest in vices like tobacco or liquor companies or in interest earning companies like banks and NBFCs. Since, it restricts the investment universe, it may under perform. But then, these funds provide a gateway to those investors who want to participate in the growth of the equity markets while at the same time do not want to invest in a class of industries or companies.

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