[sumeethaldankar]

I have invested in below Equity funds (small amounts not too large).

Aditya Birla SL Tax Relief '96(G)-Direct Plan.
Axis Long Term Equity Fund(G)-Direct Plan.
ICICI Pru Bluechip Fund(G)-Direct Plan.
IDFC Nifty Fund(G)-Direct Plan.
Invesco India Contra Fund(G)-Direct Plan.

I have also invested in below Debt funds.

HDFC Overnight Fund(G)-Direct Plan.
SBI Magnum Gilt Fund(G)-Direct Plan.

Among the Equity funds only the Aditya Birla is a SIP type fund rest are all lump sum type investment with minimum 1000 to 2000 Rs each. Total Amount invested is 8k in the Equity and for Debt fund it is 12k. Out of the 8k Equity fund the value is now 7932 Rs and the Debt fund is at 12069. So I have actually lost money.

I understand that it takes time for Equity type funds to grow but how much time should one wait to see any real gains. I am trying hard to see the value in investing in Mutual Funds where if I had invested the above amount in an FD I would have yielded better and assured returns. Let me know if I am doing anything wrong here. Some of the Equity funds were recommended by PaisaBazar and I did check their performance and they seemed to have done ok in the past (again kindly guide me If I am wrong).

Thanks.

[Simhi]

Originally Posted by sumeethaldankar

I understand that it takes time for Equity type funds to grow but how much time should one wait to see any real gains.
Thanks.

You have not mentioned when you made the investment. I am assuming you made the investment in last few months.For Equity funds, you should give at least 5 years for market to go through a up and down cycle to see real gains. In case of debt funds, I see you have invested in 2 extreme funds. Overnight funds are safest while gilt funds are risky and give good returns only when interest rates are going down. I understand SBI Magnum Gilt fund has been performing well for last few months as interest rates were going down. However, I would also ask you to look at short duration funds and diversify some amount there.

[karanraheja]

Originally Posted by 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)

MY 2 cents - With a plan of investing Rs. 5000 per month i suggest you stick to 2 funds including your PPF investment. In PPF the only drawback is lock in period of 15 years. Stick to 1 Large Cap fund and one Mid cap fund to balance your portfolio.

[srikanthns]

Originally Posted by Simhi

.For Equity funds, you should give at least 5 years for market to go through a up and down cycle to see real gains.

I am a MF investor from 2005. At that time sporadically invested. But from 2008 onwards I am regularly investing.

I invested in HDFC TOP200 (Now TOP100), Franklin India Bluechip and Prudential ICICI Value discovery fund, all top notch funds at that time, apart from few other funds. If you see the returns of these funds for 1year, 3 year and 5 year period, it is pathetic! Neither they beat the bench marks nor their peers!

So this 5 years wait is all hocus pocus I believe. At the time you want to withdraw, if market tanks, even if you have invested for 20 years, you may have to suffer loss. Their tagline "Mutual fund sahi hai" is only to get investors into mutual fund. They will not tell you when to redeem. You will be like Abhimanyu of Mahabharath, who got into Padma Vyuh, but unable to come out.

I am en employee and I get 8 percent interest on my PF. Am also in 30% tax bracket. Considering that , it is actually 10.4% return ,better than the returns of HDFC TOP 100 or FI Bluechip. I am forced to rethink that PF is better than MF. I am not going to withdraw MF investment hastily, but the depressing feeling , I am unable to shake

[altius]

To keep it simple, I would suggest investing the Rs 2500 in a single Large & Mid cap fund like Mirae Asset Emerging Bluechip instead of 1 Large & 1 Midcap. This category covers the Large & Midcap companies (top 250) as per SEBI classification.

Originally Posted by karanraheja

MY 2 cents - With a plan of investing Rs. 5000 per month i suggest you stick to 2 funds including your PPF investment. In PPF the only drawback is lock in period of 15 years. Stick to 1 Large Cap fund and one Mid cap fund to balance your portfolio.

[Simhi]

Originally Posted by srikanthns

So this 5 years wait is all hocus pocus I believe. At the time you want to withdraw, if market tanks, even if you have invested for 20 years, you may have to suffer loss....I am not going to withdraw MF investment hastily, but the depressing feeling , I am unable to shake

Yes. Mutual Funds do not mention the following - which scheme to invest, when to invest (lumpsum/sip, market time), when to redeem. Investing in mutual fund is not as straight forward as investing in fixed deposit or PPF/PF. To get better earnings, we are taking risk and we need to put additional effort (checking performance from time to time) and carry out due diligence.
Coming to your funds, I see following returns (taken from VR)

The returns shown are for reference only as returns we get actually depends on when we invested. I included Reliance Large Cap to show how selection of fund can result in different returns. Value oriented funds have performed poorly in last 1 to 2 years. Even I had investment in Birla Pure Value fund and ICICI Discovery value fund but exited at appropriate time. I did not understand your calculation of 10.4% return.

[poloman]

Originally Posted by srikanthns

I am en employee and I get 8 percent interest on my PF. Am also in 30% tax bracket. Consdering that , it is actually 10.4% return ,better than the returns of HDFC TOP 100 or FI Bluechip. I am forced to rethink that PF is better than MF. I am not going to withdraw MF investment hastily, but the depressing feeling , I am unable to shake

I am sure a lot of retail investors will be feeling the same way. They say MFs are for long term investment. But how long is this long, no one can tell clearly. If someone had invested in the market around 11 years back just before the 2008 crash, they will be looking at huge disappointment. Returns during this period can be even lesser than FDs.This will be right for most retail investors since they have a tendency to enter the market at peaks.

Sideways movement over extended periods can be hugely detrimental to SIP returns as well. So people should clearly analyze the options before jumping into MFs assuming that they would provide corpus in crores. If you need the money during a slump period, you may have to book huge losses.

The total AUM in the Indian MF industry currently is around 25 Trillion Rupees. So an average of 1% expense ratio will give around 25,000 Crs to the fund managers. Naturally, you can expect all kinds of ads.

You are absolutely correct about the PF. VPF is a very attractive option for people who don't want to invest in markets.

[carboy]

Originally Posted by Simhi

Investing in mutual fund is not as straight forward as investing in fixed deposit or PPF/PF.

If one is planning any kind of debt investment in his portfolio, then #1 choice has to be PPF. Only after exhaustive the PPF yearly limit should one look at any other debt instrument for investment. PPF is unique in that it's the only Exempt-Exempt-Exempt instrument. And if your yearly debt allocation in your portfolio is more than 1.5 lakhs, then you can open a PPF account in the name of your spouse even if your spouse is not working & will not be able to use the first Exempt out of the 3 Exempts.

[hothatchaway]

Originally Posted by srikanthns

I am a MF investor from 2005. At that time sporadically invested. But from 2008 onwards I am regularly investing.

I invested in HDFC TOP200 (Now TOP100), Franklin India Bluechip and Prudential ICICI Value discovery fund, all top notch funds at that time, apart from few other funds. If you see the returns of these funds for 1year, 3 year and 5 year period, it is pathetic! Neither they beat the bench marks nor their peers!

I too have been investing in HDFC Top100, among others. If I use the SIP calculator option in VR to calculate returns, at 11.8% for 5 years and 12.8~ for 10 years, returns arent astronomical for Top100, but arent bad either. At any rate, I do not expect anything more than 11% even from pure equity funds, anything more is just a bonus. Checked for ICICI value discovery also, returns at 6~% for 5 years is poor. Goes upto 14~ if you invest over ten years. I as a rule of thumb invest only in funds which have 'large', 'mid' and 'equity' after the AMC prefix. The rest I do not understand, feel are smartly packaged and hence stay away. https://www.valueresearchonline.com/...7&endyear=2019

Originally Posted by srikanthns

I am en employee and I get 8 percent interest on my PF. Am also in 30% tax bracket. Considering that , it is actually 10.4% return ,better than the returns of HDFC TOP 100 or FI Bluechip. I am forced to rethink that PF is better than MF. I am not going to withdraw MF investment hastily, but the depressing feeling , I am unable to shake

Are you adding the tax exemptions that you get on PPF contributions to the 8% returns? That is a good way of looking at it for someone in the 30% bracket. Just hope that the gobbermint dont reduce rates or worse, insert a T somewhere

[kavensri]

Originally Posted by carboy

If one is planning any kind of debt investment in his portfolio, then #1 choice has to be PPF. Only after exhaustive the PPF yearly limit should one look at any other debt instrument for investment. PPF is unique in that it's the only Exempt-Exempt-Exempt instrument. And if your yearly debt allocation in your portfolio is more than 1.5 lakhs, then you can open a PPF account in the name of your spouse even if your spouse is not working & will not be able to use the first Exempt out of the 3 Exempts.

Somewhat relating to your post and hence posting it here.
I am very much a safe investor. So, I have invested in almost all of the government investment schemes (VPF, PPF, SSY, SA, NPS, APY, VVY, etc) at present. Agree that NPS has a link to equity market, but I have choosen 'Safe' portfolio so that the equity percentage is minimum. I have two PPF accounts (myself and my spouse) and I am contributing maximum amount in all the above mentioned schemes.

I want to use PPF corpus (at the end of lockin period) as my pension plan along with standard pension plans like APY, VVY, SA and NPS. I have also taken couple of pension plans from LIC. And I am planning to use my FDs, PF and Gratuity amount as my emergency liquid fund.

[shashant]

Query for experts here.

I have recently cleared off my home loan and now have around 20k per month to invest.
I am already investing in PPF( spouse as well), VPF, Couple of MFs(small cap with loss) and a small amount in Equity.

Looking for a long term horizon for investment (10-15 yrs)

[srikanthns]

Originally Posted by hothatchaway

Just hope that the gobbermint dont reduce rates or worse, insert a T somewhere

Shhhhh. Shhhhhh......
Even the walls have ears . And mind you the finance bill is yet to be passed. Let us not give ideas to people

[srsrini]

Originally Posted by Simhi

Yes. Mutual Funds do not mention the following - which scheme to invest, when to invest (lumpsum/sip, market time), when to redeem. Investing in mutual fund is not as straight forward as investing in fixed deposit or PPF/PF. To get better earnings, we are taking risk and we need to put additional effort (checking performance from time to time) and carry out due diligence.
Coming to your funds, I see following returns (taken from VR)
...picture snipped ....
The returns shown are for reference only as returns we get actually depends on when we invested. I included Reliance Large Cap to show how selection of fund can result in different returns. Value oriented funds have performed poorly in last 1 to 2 years. Even I had investment in Birla Pure Value fund and ICICI Discovery value fund but exited at appropriate time. I did not understand your calculation of 10.4% return.

You make a good point about looking at the long term, and also closely watching the performance. There is one issue - you should invest in direct funds. But direct funds have a history of only 6+ years. So when looking at past performance, please use regular plans so that you get a longer history.

Originally Posted by srikanthns

I am a MF investor from 2005. At that time sporadically invested. But from 2008 onwards I am regularly investing.

I invested in HDFC TOP200 (Now TOP100), Franklin India Bluechip and Prudential ICICI Value discovery fund, all top notch funds at that time, apart from few other funds. If you see the returns of these funds for 1year, 3 year and 5 year period, it is pathetic! Neither they beat the bench marks nor their peers!

So this 5 years wait is all hocus pocus I believe. ....

I am en employee and I get 8 percent interest on my PF. Am also in 30% tax bracket. Considering that , it is actually 10.4% return ,better than the returns of HDFC TOP 100 or FI Bluechip. I am forced to rethink that PF is better than MF. ...

MF analysis is not all about returns. Franklin Bluechip is a conservative fund and has much less volatility than its peers. Its returns too tend to be just about on part with its peers. HDFC Top 100 is kind of on the other end - it has more SD (all of PJ's funds do.) I don't see where in the recent past it has lagged its peers. Its 3 year trailing return is almost at the top of the pack.
People need both debt and equity. EPF - thought a great product - is not very flexible and that has its issues too. Please try not to shun any asset class.

Originally Posted by poloman

I am sure a lot of retail investors will be feeling the same way. They say MFs are for long term investment. But how long is this long, no one can tell clearly. If someone had invested in the market around 11 years back just before the 2008 crash, they will be looking at huge disappointment. ...
Sideways movement over extended periods can be hugely detrimental to SIP returns as well. So people should clearly analyze the options before jumping into MFs assuming that they would provide corpus in crores. If you need the money during a slump period, you may have to book huge losses.
...

The problem with using one particular period is that I can cherry pick. Somebody who invested at the bottom of 2008 crash would have a very different story. And in any case, please show me folks who invest all or most of their networth in one shot.



Any decent planner would talk about asset allocation and rebalancing. If you have a mix of both debt and equity a slump should not worry you.

Originally Posted by kavensri

Somewhat relating to your post and hence posting it here.
I am very much a safe investor. So, I have invested in almost all of the government investment schemes (VPF, PPF, SSY, SA, NPS, APY, VVY, etc) at present. ....

I want to use PPF corpus (at the end of lockin period) as my pension plan along with standard pension plans like APY, VVY, SA and NPS. I have also taken couple of pension plans from LIC. And I am planning to use my FDs, PF and Gratuity amount as my emergency liquid fund.

Please note this huuuuuge issue with all the pension plans in India. You finally use the accumulated corpus to buy an annuity. And there are no inflation indexed annuities in India. Unless you do some complex things with deferring and laddering annuity plans. you would have a tough time after 15 years or so. Please look at this very carefully before you rely only on pension like products.



Disclaimer: I am a fee-only planner and do give equity funds their due place in my plans. I don't have any bias towards one asset class or another. I just believe that people should look at their situation and needs and have the right asset mix.

[murillo]

Can forum members review the "Mirae Asset Midcap Fund" NFO?

This NFO is currently open for subscription now.

[saket77]

Originally Posted by murillo

Can forum members review the "Mirae Asset Midcap Fund" NFO?

This NFO is currently open for subscription now.

There are so many good midcap funds already around; why go through the NFO route? I, personally tend to stay away from NFOs given that there is no practical benefit of investing in one.