[Singh09]

Originally Posted by ghodlur

Not a guru but here are my suggestions:
Second SIP: HDFC Midcap Opportunities
Third SIP: Mirae Asset Hybrid Equity Fund
The above suggestions are purely on the logic of the no of investment years to achieve the goal.

Is the goal to save money meant for Retirement??

Thanks for the response buddy. Yes I am Planning this for a long term and by the time SIP's will be done I will be almost at my retiring stage. Since I am planning these for 20-25 years.

[ranjitnair77]

Originally Posted by Singh09

Thanks for the response buddy. Yes I am Planning this for a long term and by the time SIP's will be done I will be almost at my retiring stage. Since I am planning these for 20-25 years.

This is a very long term outlook and it looks like you want to have a fill it every month and forget it kind of an option. If this is indeed the case, I think you should consider an Index Fund rather than an actively managed fund. They faithfully track the index, are cheap and predictable. I'm currently in the process of moving a significant part of my portfolio over to Index funds.

I'd just put the 6.5k monthly SIP in a single Index Fund like the SBI ETF Nifty 50. Here's a video that explains this. I found the explanation of survivorship bias extremely illuminating. And don't forget to invest Direct.

https://www.youtube.com/watch?v=8CYgDbyfvxg

[freedom]

Originally Posted by tud

I'm planning to invest in Bajaj Finserv FD and Shriram Transport FD (because of their interest rates which is about 1-2% more than most banks) on behalf of my mother who is a senior citizen.

Never look at FDs as an alpha generator.
FDs are for giving modest returns with a high level of safety. These companies are paying a high interest becase they can't get the money they need at a cheaper interest rate from banks etc. They are not doing any favour by paying 2% over the standard FD rate. 2% higher interest has a potential to wipe off 100% of your principal. Even if the company remains solvent, there is a good possibility of delaying the repayment if things go down hill.

IL&FS too had FDs .. and so did DHFL. These were 'good' institutions. One has gone down the dumps and the other one has already defaulted on one trance but managed to pay up a few days later.


The 'safest' bet is to put money in sovereign govt securities.

[thoma]

Have some money parked in bank savings account which I might need to use within a year. I do not know when I'll need it, so not moving to an FD or into equity funds.

Which are the best zero-exit-load debt funds for such a scenario. I see that 'ultra short term' funds performing better than 'liquid' funds. Any recommendations/suggestions for my case. Or should I move these to an FD with no penalty for premature closure?

[sgiitk]

At the moment I will steer clear. Let me see what madam Seetharaman comes up with. The rupee threatening to drop below the 69 mark. I am holding my horses till the budget is out.

[DigitalOne]

Originally Posted by thoma

Which are the best zero-exit-load debt funds for such a scenario. I see that 'ultra short term' funds performing better than 'liquid' funds. Any recommendations/suggestions for my case. Or should I move these to an FD with no penalty for premature closure?

If your investment horizon is just one year or lesser, keep away from all debt funds except overnight funds. The NBFC credit risk is still high and it is going to be troubled times for all debt fund investors for an year at least. Moving to FD with no penalty may be a better option.

[sgiitk]

Remember fund performance is related to the economy. We have reduced growth rate (esp in the rural sector) and also manufacturing. The auto sector is in a tailspin (BS-VI and EV are possible causes).

The plus thing is that Mme Seetharaman is from the Financial Sector, so understands the dynamics better than a pucca neta like Jaitley!

[bullrun87]

Originally Posted by thoma

Have some money parked in bank savings account which I might need to use within a year. I do not know when I'll need it, so not moving to an FD or into equity funds.

Which are the best zero-exit-load debt funds for such a scenario. I see that 'ultra short term' funds performing better than 'liquid' funds. Any recommendations/suggestions for my case. Or should I move these to an FD with no penalty for premature closure?

If it were my money, I would go for a large aum well diversified (invested in atleast 50 papers) mostly Aaa rated ultra short term fund. I you don't want any credit risk you could go with liquid funds like ppfas liquid or quantum liquid that invest only in sovereign papers and are thus quite safe. These will fetch you around 6.5%. Overnight funds are also good for those with low risk appetite.

[ranjitnair77]

Originally Posted by SmartCat

Hybrid aggressive equity funds put 65% in stocks and 35% in bonds, and is treated as an equity fund for tax purposes. These funds will have significantly lower volatility than pure equity funds.

This thread is such an incredible source of wisdom thanks to the efforts of so many of you, and specially SmartCat. I have been investing in Mutual Funds for well over a decade.

I'm currently in the process of a complete overhaul of my portfolio. I have worked with Wealth Managers in the past but I'm now in the process of moving over to direct. The expense ratios of Regular plans are problematic. This gives me a chance to look at things afresh. Some principles I would like to follow.

• My debt portfolio is taken care of, so I'm only looking at equity, growth option.
• Keep the portfolio restricted to 3-4 funds. Not more. I will continue SIPs in the same funds.
• I do not want to chop and change unless performance is really bad. I'd like to stick to the fund for 10 years at least, if not more. This is from a long term/retirement outlook.
• I'd like the expense ratio to be reasonable
• I value funds with a proven record and with a reasonable AUM.
• I would be delighted with an overall portfolio performance of 12%+ XIRR

Here is my thought process. I am increasingly of the opinion that Index funds should form the core.

• 30% of the corpus/SIP in a Nifty50 Index fund with low tracking error.
• 20% of the corpus/SIP in a Nifty Next 50 Index fund to get good coverage of the Nifty 100.
• 30% of the corpus/SIP in a dynamic/balanced fund like HDFC/ICICI balanced advantage. This is for improved downside protection.
• 20% of the corpus/SIP in a midcap fund like Axis Midcap for some exposure to midcaps and possibilities of alpha.

I'd love to hear all your feedback. I'm also thinking that I will park the existing bulk corpus in a liquid fund and move the investments into these funds over a year. SIPs will be switched over right away. Does that make sense?

[SmartCat]

Originally Posted by ranjitnair77

Keep the portfolio restricted to 3-4 funds. Not more. I will continue SIPs in the same funds.

Although everybody advises MF investors to stick to 3 to 4 funds, I'm not 100% convinced by their logic. However, starting off with 3 to 4 funds is fine. If you are unhappy with a particular fund, stop SIP in such a fund and start a new SIP in another mutual fund idea. If you force yourself to hold just 3 or 4 funds, you will then be forced to exit older funds (too much churning). Or worse, it will force you to invest more money into a fund you don't like.

Nifty50 Index fund, Nifty Next 50 Index fund, dynamic/balanced fund, midcap

This are two ways to diversify mutual fund holdings -

- Based on marketcap (largecap & midcap, midcap & smallcap, multicap etc)
- Based on strategy (debt & equity asset allocation, value investing, sector funds, high growth investing, international stocks, dividend yield fund)

It is simpler to choose based on marketcap. But since you have a decade of investing experience, you can try out the latter (ignore sector funds though). However -

- I'm not too keen on NIFTY 50 and Nifty Next 50 funds. Think of these funds as stock picks made by folks at National Stock Exchange. NIFTY 50 especially is poorly made index. There is way too much weightage to financials (because of methodology used to assign weightage based on shareholding). Important sectors are poorly represented in all indexes.

- Since you have a debt and liquid MF portfolio, you don't need to invest in 'balanced funds'. Your overall MF portfolio is already "balanced"

[ranjitnair77]

Originally Posted by SmartCat

- Based on marketcap (largecap & midcap, midcap & smallcap, multicap etc)

- I'm not too keen on NIFTY 50 and Nifty Next 50 funds.

- Since you have a debt and liquid MF portfolio, you don't need to invest in 'balanced funds'. Your overall MF portfolio is already "balanced"

Excellent points SmartCat. Thank you. I'll drop the balanced fund and the Next 50. I would still like to try out Index Investing given that the Nifty is the benchmark so would this strategy be better?

• 30% in Nifty 50 Index. This kind of takes care of large cap.
• 30% Large + Midcap. Mirae Asset Emerging Bluechip. This is in my current portfolio.
• 20% In Multicap. Kotak Standard Multicap. This is in my current portfolio.
• 20% In Midcap. Axis Midcap Fund.

I'll also keep in mind to not overtly restrict things to 4 funds and be more flexible about it in the future.

[Singh09]

Guys I am planning to invest 5000/- per month and i am looking to diversify that amount every month in:
1. 2500/- PPF Account
2. 1500/- SBI Magnum multicap fund - Direct Growth
3. 500/- Mirae Asset Hybrid - Equity Fund - Direct Plan (G)
4. 500/- Invesco India midcap Fund - Direct Plan (G)

And with time I'll increase the amount for each of these funds. So I just want a little help from the guru's whether I should go ahead with this plan or not.

[shipnil]

One drawback of investing through MF Utility is you really don't know how your funds are doing. I have been investing through them for few years now and again due to constant change in investment thinking, I have ended up with 20+ funds and many of then invested in SIP kind of way (SIP, STP, CasT etc).

As said, the problem was, I was unable to assess how each one is doing. The MFU does not give you the annualized return. In fact it doesn't give you any return.

After spending, many hours yesterday on Cams and Karvy website and getting the transactions, I could create a copy of investments on Value Research Portfolio. The result was a shocker. Even with a sizeable portfolio, the annualized returns stood at about 8.5% for last 4 years. This all is due to some strategy I followed of investing certain amount in Liquid/Arbitrage funds.

If I wish to re-balance, looking at the current performance of Indian Economy, how long should I be taking?

[DigitalOne]

Originally Posted by SmartCat

Although everybody advises MF investors to stick to 3 to 4 funds, I'm not 100% convinced by their logic. However, starting off with 3 to 4 funds is fine.

Originally Posted by ranjitnair77

I'll also keep in mind to not overtly restrict things to 4 funds and be more flexible about it in the future.

i agree to this. The way I do it is I stick to only few fund houses (FT, Aditya Birla, HDFC, ICICI, Quantum). I have investments in couple of other fund houses but I will exit them (by 2020 end) based on ELSS lock-in/tax status.

I don't bother too much on the number of funds as long as I stick to the fund houses. It gives me a couple of advantages - I can diversify and yet keep track easily.

- I'm not too keen on NIFTY 50 and Nifty Next 50 funds. Think of these funds as stock picks made by folks at National Stock Exchange.

Isn't the Nifty 50 automatically generated index? Or is there a human discretion in choosing the stocks?

---

One of the best articles I have read on Index funds vs Active funds is the Freefincal article

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Originally Posted by shipnil

One drawback of investing through MF Utility is you really don't know how your funds are doing. I have been investing through them for few years now and again due to constant change in investment thinking, I have ended up with 20+ funds and many of then invested in SIP kind of way (SIP, STP, CasT etc).

Do you receive the Consolidated account statement from NSDL? I don't remember how I registered (or it automatically started coming), but I have been getting this monthly PDF for 5 years now, and it truly is fantastic. It gives the CAGR for all the invested funds, allocation across debt-equity, portfolio growth and all such data.

[SmartCat]

Originally Posted by ranjitnair77

I would still like to try out Index Investing given that the Nifty is the benchmark so would this strategy be better?

Sure, do give it a shot.

Originally Posted by DigitalOne

Isn't the Nifty 50 automatically generated index? Or is there a human discretion in choosing the stocks?

Stock addition and removal is done by committee every 6 months based on certain parameters (marketcap, liquidity, promoter holding, price performance, fundamentals, sector etc). However, the weightage for a stock at entry is formula driven. Also, once a stock is added to the index, there is no further human involvement - the weightage changes automatically based on relative price movement.