[Engine_Roars]

Originally Posted by poloman

This shows the risk of goal based investments in equity mutual funds with out proper diversification or risk mitigation. If your goal comes up in a bear phase your entire plan will go haywire.

The markets around the world have been behaving totally irrational of late. US economy just contracted 33% last quarter and Indian economy will surely follow the same trend. But markets in both countries are only marginally down from highs.

....

If the financial goal is too important, it may be wise to book the losses in one of the funds with lesser loss and move to a more safe and liquid fund or FD.

Yes, as they say, you learn from your mistakes and this one is proving one huge mistake financially. At the time of investing, these funds had a good track record for 5 years tenure & I thought it was a good idea. In fact, I first started with RD and then some where I realized mutual funds could give me better return & here I am.

The financial goal is a mandatory thing & there is no option to back off. I concur that booking loss for one of these funds is a safer option. Thanks for your inputs.

[sagarpadaki]

Originally Posted by Engine_Roars

Hi Experts, Need some advise. I have been investing in below mentioned funds since last 3 years through SIP. The intention to invest in these funds was to accumulate a fund to pay towards a major financial commitment which should be around end of 2021. However, as of today both of these funds NAVs are in negative. I am not sure if I should continue the SIP or just redeem the amount & invest it in a short term FD. Any pointers would be of great help.

1. LNT Emerging Businesses Fund - Regular Plan - Growth Option = -18%
2. Franklin India Equity Fund GROWTH = -4%

Three years ago when you started with the investment for your goal end 2021 means a duration of approx 5 years.

The funds you have chosen is small cap and mid cap, which, as you might know are high risk. Ideally you should have invested in fixed income/debt schemes for any tenure less than 5 years. If you had made the decision of equity yourself then i would suggest you read up more on the risks involved. A Large cap/index fund would have given you better returns. If it was someone who advised you to invest in these funds for your goal then you need to stop taking advice from the person immediately.

Now, see if you can move the amount from mid cap to debt funds. Because @ -4%, you will take the minimum hit. Stop the SIP in both the funds and continue in the chosen Debt fund/fixed income.

[poloman]

Originally Posted by sagarpadaki

Three years ago when you started with the investment for your goal end 2021 means a duration of approx 5 years.

If it was someone who advised you to invest in these funds for your goal then you need to stop taking advice from the person immediately.

Now, see if you can move the amount from mid cap to debt funds. Because @ -4%, you will take the minimum hit. Stop the SIP in both the funds and continue in the chosen Debt fund/fixed income.

5 years is decent enough long term in equities, right? The problem is the timing of the goal. If your goal falls in a bear phase even 10 or 20 year returns will be inadequate in comparison to other instruments. So diversification or taking risk mitigation steps on a yearly basis is the key. For example if you have a 10 year goal and you are sitting on very good returns in 8th year. Simply exit and park the money in a good liquid scheme.

[Simhi]

Franklin Templeton MF schemes see dip after Future group firms default

Link: https://www.business-standard.com/ar...0101290_1.html

Extract: our debt schemes of Franklin Templeton Mutual Fund (MF) that are under wind-up saw 1.3 per cent-4.85 per cent dip in their net asset values (NAVs) following payment defaults by two Future group firms -- Nufutre Digital (NDIL) and Future Ideas (FCIL).

Franklin India Income Opportunities saw its NAV dip by 4.85 per cent on Friday. For Credit Risk Fund, the NAV was down 2.31 per cent. Short Term Income Plan and Dynamic Accrual Fund saw 1.72 per cent and 1.34 per cent dip in NAVs, respectively.

[whitewing]

Originally Posted by Engine_Roars

...towards a major financial commitment which should be around end of 2021. However, as of today both of these funds NAVs are in negative. I am not sure if I should continue the SIP or just redeem the amount & invest it in a short term FD. Any pointers would be of great help.

1. LNT Emerging Businesses Fund - Regular Plan - Growth Option = -18%
2. Franklin India Equity Fund GROWTH = -4%

Depends on how important and hard that milestone is, and how you are placed to "fill in" any short falls from other sources.
The choice of funds indicate that you have been willing to take the risk of a downslide. But, I suppose no one in the world anticipated the situation due to Corona.

If the goal is important and you have limited room to divert funds from other sources to handle the shortfall, switch to a FD in a few large banks Alternately, purchase bonds from reputed PSU companies (tax free bonds are yielding around 5% - do check if the interest payment schedule/maturity schedule matches with your goal).

If you expect the economic situation to have improved by the time your goal come up AND you have some wriggle room AND willing to take some risks, I would suggest putting in a fraction (which you are comfortable with) in NPS tier2 with a larger portion (say 75% in govt debt) and at the most 25% for equity.

All the best!
PS: I'm not an expert, but have put in money in the said instruments.

[cataclysm]

I need some advice here.

I forsee an expense of around 1.5 lakh next year (around September), so I was thinking of investing 12k per month beyond RDs and FDs.

I was researching on Gilt funds (not sure if I can even invest in them for 1 year), that lead me to Dynamic Bond Funds, then that lead me to Low Duration Funds, and finally that lead me to Liquid Funds.

So now I am really confused. The aim is to earn more than the 4-5% returns that RDs offer.

Thanks.

[poloman]

Originally Posted by cataclysm

I need some advice here.

I forsee an expense of around 1.5 lakh next year (around September), so I was thinking of investing 12k per month beyond RDs and FDs.

I was researching on Gilt funds (not sure if I can even invest in them for 1 year), that lead me to Dynamic Bond Funds, then that lead me to Low Duration Funds, and finally that lead me to Liquid Funds.

So now I am really confused. The aim is to earn more than the 4-5% returns that RDs offer.

Thanks.

For a 12 months period recurring deposit of Rs12,000, every 1% change in interest will make a difference of only about 800Rs. So you should worry more about preservation of capital, I would say. Gilt funds can be really unpredictable for such short durations so as debt funds. Liquid funds may be OK, but may not offer significant higher returns than a RD.

[sagarpadaki]

Originally Posted by poloman

5 years is decent enough long term in equities, right? The problem is the timing of the goal. If your goal falls in a bear phase even 10 or 20 year returns will be inadequate in comparison to other instruments. So diversification or taking risk mitigation steps on a yearly basis is the key. For example if you have a 10 year goal and you are sitting on very good returns in 8th year. Simply exit and park the money in a good liquid scheme.

In my opinion, 7 years goal is long enough to invest in equity. 5 years is borderline.

Regarding goal falling into bear phase, that is the reason why asset allocation is so important. A 7 year time allows for suitable re balancing than a 5 year time frame.

[Engine_Roars]

Originally Posted by sagarpadaki

Three years ago when you started with the investment for your goal end 2021 means a duration of approx 5 years.


Now, see if you can move the amount from mid cap to debt funds. Because @ -4%, you will take the minimum hit. Stop the SIP in both the funds and continue in the chosen Debt fund/fixed income.

Originally Posted by poloman

5 years is decent enough long term in equities, right? The problem is the timing of the goal. If your goal falls in a bear phase even 10 or 20 year returns will be inadequate in comparison to other instruments. So diversification or taking risk mitigation steps on a yearly basis is the key. For example if you have a 10 year goal and you are sitting on very good returns in 8th year. Simply exit and park the money in a good liquid scheme.

Originally Posted by sagarpadaki

In my opinion, 7 years goal is long enough to invest in equity. 5 years is borderline.

Regarding goal falling into bear phase, that is the reason why asset allocation is so important. A 7 year time allows for suitable re balancing than a 5 year time frame.

Thanks guys for all the inputs. I thought 5 years was long enough to get a better return then an RD or similar investments but obviously I did not consider a pandemic in my calculations.

I think I might be able to accommodate some funds from other sources and might not need this entire amount. In this situation, should I continue investing in these funds or should just redeem and invest in some other investment options?

I can extend this by mid of 2022 at the most.

[sagarpadaki]

Originally Posted by Engine_Roars

Thanks guys for all the inputs. I thought 5 years was long enough to get a better return then an RD or similar investments but obviously I did not consider a pandemic in my calculations.

I think I might be able to accommodate some funds from other sources and might not need this entire amount. In this situation, should I continue investing in these funds or should just redeem and invest in some other investment options?

I can extend this by mid of 2022 at the most.

I would suggest you stop investing in both SIP, redeem the one with lesser losses for the amount that is needed for you to fund your goal. Let the remaining amount be invested in the fund and allow it to grow over the next few years. Track the funds over the next couple of years and if their performance is poor compared to its peers in the category then you can decide to pull out from the funds.

If you want to invest further for different goals, i would suggest go for a good Multi-cap fund or a large and mid cap fund or a large-cap/index fund. IMHO, small cap is not needed at all for any of the goals. It is too volatile. A good multi-cap will have some small cap component in it and that is more than enough for an investor. Best thing is that the multi-cap fund manager can vary the exposure based on the market.

Again, none of these can be relied upon for a 5 year goal. For 5 years, stick to fixed deposits or short term funds. I would suggest IDFC short term bond fund and kotak short term bond fund.

[Engine_Roars]

Originally Posted by sagarpadaki

I would suggest you stop investing in both SIP, redeem the one with lesser losses for the amount that is needed for you to fund your goal. Let the remaining amount be invested in the fund and allow it to grow over the next few years. Track the funds over the next couple of years and if their performance is poor compared to its peers in the category then you can decide to pull out from the funds.

If you want to invest further for different goals, i would suggest go for a good Multi-cap fund or a large and mid cap fund or a large-cap/index fund. IMHO, small cap is not needed at all for any of the goals. It is too volatile. A good multi-cap will have some small cap component in it and that is more than enough for an investor. Best thing is that the multi-cap fund manager can vary the exposure based on the market.

Again, none of these can be relied upon for a 5 year goal. For 5 years, stick to fixed deposits or short term funds. I would suggest IDFC short term bond fund and kotak short term bond fund.

Thank you, you have been very helpful

[vharihar]

Which is a good website that has a good charting capability that shows NAV chart too. I came across many sites that show chart but they mostly show %age returns; I want NAV chart instead (along with the obvious flexibility of choosing a period)

[Simhi]

Originally Posted by vharihar

I want NAV chart instead (along with the obvious flexibility of choosing a period)

The site www.valueresearchonline.com has good NAV chart for different periods like 1 month to 7 years to All. If you want more flexibility, you can download the NAV history from www.amfiindia.com and create your own charts.

[vharihar]

Originally Posted by Simhi

The site www.valueresearchonline.com has good NAV chart for different periods like 1 month to 7 years to All. If you want more flexibility, you can download the NAV history from www.amfiindia.com and create your own charts.

I tried that, but that too shows only returns charts, not NAV charts.

Eg.: I went to the website (valueresearchonline), clicked on the search icon in top right, entered "HDFC SMALL CAP FUND" (an example), and then clicked on the matched fund it retrieved. If I scroll down, I can see a chart but thats a chart of %age returns, not the NAV. And I see no options to have it plot a NAV chart.

Am I missing something?

[Ferrari1976]

Originally Posted by vharihar

I tried that, but that too shows only returns charts, not NAV charts.

https://www.fundsindia.com/s/hdfc-sm...nd-reg-g-/4455