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This article makes the same observations about Pru ICICI Value Discovery fund being overweight on Pharma and IT and consequent lackluster performance



http://m.economictimes.com/markets/s...w/59940805.cms

Please advise a mutual fund for 3 years horizon based on small cap/mid cap or mix of both?

With the market at historical all time highs, my advice will be against equity funds for this short horizon. Invest in ultra short debt funds instead which should fetch you around 9% every year.

Regards.

After a long time the exchange rate for two days has been more than INR64 to the US$. Does it sustain or resume its downwards run?

I find most mutual funds to be closet indexers and another problem is the high expenses associated with equity funds. For all the "management that they are supposed to do, it is disappointing that they remain fully invested in the markets even at these valuations. I have started investing directly in equities. The basic reason for choosing mutual funds is that I don't know enough about stocks. If that is true, on what basis will I choose equity funds? I think it's time to do the work and be responsible for your own money.

Do your own research and look at top rated funds in value research and Morningstar.

I would suggest not to invest any money in any equity instruments with a time horizon of less than 5 years. The current Nifty P/E is more than 24. This is highly overvalued in my honest opinion. Any bulk investments or SIP started at this time will reduce your probable future gains. You would be better off parking your surplus in a debt fund or a liquid fund. If you are in a higher tax slab, do consider a good equity arbitrage fund. Long term capital gains (more than 1 year) are zero and fund behaviour is more or less steady, with very minimum chances of capital loss.
All said and done, please do your own research as well. Everyone will give you advise, you are the one with your skin in the game.

I have some money, presently lying in FD, which I want to deploy in a more efficient financial instrument. I am planning to transfer the money from FD to Arbitrage Mutual Funds with Dividend Reinvestment Option. My reasoning is the following :

1. Arbitrage funds are relatively safe and are expected to give 7% +/- 0.5%.
2. They are treated as Equity Funds and hence Capital Gains, after a year, are tax free.
3. Short Term Capital Gains are taxed at 15%.
4. Dividends do not attract DDT and are totally exempt in the hands of investor.
5. Redemption after 30 days does not attract exit load.

Periodic dividend stripping will keep their NAV at/near my purchase price, thus ensuring that redemption (Short Term or Long Term) does not result into capital gains.

Am I missing anything? Suggestions please.

P.S. : Eventually I am planning to transfer the sum from Arbitrage Fund to Funds with low equity exposure (I am thinking Equity Savings Fund), either through SIP or when the market corrects.

I am confused how to build portfolio out of liquid I am getting. Right now my strategy is to invest 50% of liquid with debt funds and then remaining 50% in Equity Funds.

Generally I am buying debt funds in lumpsum when the liquid is available. Equity Mutual funds are purchased using SIP over months. I am planning to increase this in subsequent month.

Debt fund I have invested is Long Term Gilt plans. Equity Fund is spread across sectors.

Now I do not have good knowledge about strategy of investing. But my target is to build portfolio over 3-4 years from now. After 4-5 years withdraw some money to purchase small property and remain invested for really long term. Slowly keep up building portfolio.

Is it safe to assume average 10% return annually with this strategy? Or is there any better strategy.

And I am also thinking of option of debt fund to equity fund STP. Will it be good? And what should be debt/equity ratio we should always maintain for target returns of 10% annually.

Is there any quick guide on how to do Direct Investment in MF SIP's vs going through a service provider like ICICI Direct ?

Also what are the pro's and cons of doing direct investment vs via a Bank Demat a/c ?

Other than avoiding the bank brokerage charge, are there any benefits ?
Also how easy is it to track your holdings when you do Direct investment ?

If you are KYC compliant then you can directly invest via the AMC's website. Most of the AMCs support online SIP. Direct investment will any day be better as there is no commission to the middle man! You can keep track of your holdings through various online tools/websites. I make use of valueresearch's 'My Portfolio' tool and I find it quite good.

Debt Funds are always considered a better option than the Fixed deposits. However a plethora of different categories of debt funds do tend to be confusing. Also the debt funds have an interest rate risk. Would appreciate if anyone can suggest w.r.t Debt funds, which category and MF to invest at this point.

I guess, it is always better to invest in direct schemes because of the lesser charges.
Disadvantage:-
Recently I had invested in SBI Long Term GILT fund direct scheme. While investing I had provided Sharekhan Demat account. Now to redeem this, there is no online option. Only option is to visit the Sharkhan branch, fill redemption form, and submit the same in Sharekhan branch.

Open CAN through MF Utility and fill up PayEezz form. You can start everything from home and start investing direct schemes. Don't go through demat pathway. I'm using MF Utility and it's so easy. I can't believe that people haven't tried that. You can get their app and track your holdings. Message me if you need more details.

Wanted feedback on HDFC Prudence fund. How good is it in terms of safety etc when compared to its competition? Not looking at very high returns. Find the current return that they are offering combined with the safety of the fund fairly reasonable.

Thanks in advance for your feedback!