[DigitalOne]

Originally Posted by saildrive

I read some where that one should invest atleast 50k per year in a NPS (scheme). Do you think it is a good idea to park 50000 year on year for sometime as a one time investment?

If yes, let me know which is the best NPS scheme one should invest such an amount.

Would love experts / experienced investors to help me find a viable option.

The minimum to be invested every year is rs 6000 to keep the account active.

[anku94]

Started my first equity investment with a small lumpsum purchase in the following MFs

Franklin India Tax Shield (ELSS/Large Cap)
Franklin India High Growth Companies Fund (Multi Cap)
Mirae Asset Emerging Bluechip Fund (Mid Cap)
DSP Black Rock Micro Cap (Small Cap)

In ratio 30:25:25:20

Thinking of buying SIPs for all these. Any thoughts?

[nowwhat?]

Originally Posted by anku94

Thinking of buying SIPs for all these. Any thoughts?

SIPs always a good idea.

Originally Posted by anku94

Mirae Asset Emerging Bluechip Fund (Mid Cap)

Good mid and small cap fund with some large caps as well. Solid performer. This small (in India) Korean company has been able to carve out its diehards in a crowded space.

Originally Posted by anku94

DSP Black Rock Micro Cap (Small Cap)

Patchy fund house which was had one of the best performing funds (DSPBR Top 100) until a few years ago. What makes this particular fund special is that it is the best performer for small/tiny companies, not to mention the fact that it has very few peers in the small cap category.

Originally Posted by anku94

Franklin India Tax Shield (ELSS/Large Cap)

Invest only in ELSS if you have used up all other 80C options: kid's education, home loan principal, EPF, etc. Why lock your money for 3 years? Axis Long Term is a good ELSS and ICICI Focussed Bluechip is a solid large cap performer.

Originally Posted by anku94

Franklin India High Growth Companies Fund (Multi Cap)

Generally, I avoid investing in more than one fund with any AMC. Not sure about this particular fund, but multi-cap is a bit like dynamic bond funds -- Their gains are sometime lower than large caps and they get beaten down in a down market. Not sure if you have looked at balanced funds.

Originally Posted by anku94

In ratio 30:25:25:20

Hard to comment without knowing age and investment goals. Also bear in mind that a fund may diversify its holdings by investing partly in other categories. For instance, Mirae Emerging Bluechip invests 30% in giant and large caps. In this scenario, better to invest via SIP for a year and then check out the actual allocations by analyzing the portfolio someplace like Value Research.

[sansvk]

Originally Posted by nowwhat?

Invest only in ELSS if you have used up all other 80C options: kid's education, home loan principal, EPF, etc. Why lock your money for 3 years?

If you can afford all 1.5L in ELSS as a young investor, please go for it. It would certainly earn a lot more than your epf etc. in the long term. Some ELSS funds have performed better than diversified or large cap funds over a 5 year period, so donot bother about the lockin period.

[anku94]

Originally Posted by nowwhat?

SIPs always a good idea.

Yes, but I wanted to get started and settle with 3-4 funds first. Since this is my first investment (I'm just 21, and on my first job) - I found myself browsing through forums and valueresearch and not being able to make a decision.

I thought I'd start manually investing with some decent-ish funds, and meanwhile learn more, and start SIPs when I have better idea of the market, say, in 2-3 months.

Invest only in ELSS if you have used up all other 80C options: kid's education, home loan principal, EPF, etc. Why lock your money for 3 years? Axis Long Term is a good ELSS and ICICI Focussed Bluechip is a solid large cap performer.

Originally Posted by sansvk

If you can afford all 1.5L in ELSS as a young investor, please go for it. It would certainly earn a lot more than your epf etc. in the long term. Some ELSS funds have performed better than diversified or large cap funds over a 5 year period, so donot bother about the lockin period.

Conflicting opinions.

I'm very young so don't have a kid to educate or a home loan to pay for yet. :P

I thought I'd divide my 80C between ELSS and PF. I thought Franklin ELSS had a significant overlap with their large-cap fund, so why not go with just the one.

Generally, I avoid investing in more than one fund with any AMC.

Yes, when I shortlisted my 3-4 funds, almost all of them turned out to be from Franklin. I removed one.

Not sure about this particular fund, but multi-cap is a bit like dynamic bond funds -- Their gains are sometime lower than large caps and they get beaten down in a down market. Not sure if you have looked at balanced funds.

Thanks, will look into these. This is why I've not started SIPs yet - still a lot to learn.

Hard to comment without knowing age and investment goals.

I would ideally like it to be a long term investment - but there's a good chance I'll have to liquidate all of it for higher education in a couple of years.

[deepv]

Originally Posted by anku94

..
I would ideally like it to be a long term investment - but there's a good chance I'll have to liquidate all of it for higher education in a couple of years.

Two years (or thereabouts) is not particularly a 'long term' period with equities (equity MFs), considering if there is a downside you may not have time to recover your investments.
You may want to consider Debt funds as well if that's the period you 'might' end up looking at.

[sgiitk]

Originally Posted by anku94

1.I'm very young so don't have a kid to educate or a home loan to pay for yet. :P

2.I thought I'd divide my 80C between ELSS and PF. I thought Franklin ELSS had a significant overlap with their large-cap fund, so why not go with just the one.
3. I would ideally like it to be a long term investment - but there's a good chance I'll have to liquidate all of it for higher education in a couple of years.

1. In due course you will need money for them also, so plan accordingly. Savings re investments are a lifetime plan.
2. I will say emphasise of PPF, say, 100k and 50k. ELSS can tempt you to draw early.
3. Two years is too short for equity - you may get lucky! On this horizon I will look at Balanced funds (Equity Oriented), and the new kid on the block Equity Arbitrage Funds. These give you returns comparable to FDs (higher if you are in the 30% bracket) and have the same treatment as Equity Funds for taxation.

Take my case, about 12 years ago I was almost into Equity Funds, now I have progressively gone less aggressive, and and also gone into both Balanced and Arbitrage. To balance your portfolio you can also look at some funds with a high overseas component (no tax rebates). Also, there are some open type of Balanced Funds which enjoy no tax benefits but are safer. No I mean apart from indexation.

[carwatcher]

I have invested today a reasonably good sum in Franklin Smaller companies Fund due to two reasons :
a) Almost every analyst is of opinion that our economy is showing strong signs of revival.
b) Midcaps give better returns and are available at attractive prices.

Can someone suggest any other fund with long term perspective.

[sgiitk]

Originally Posted by carwatcher

I have invested today a reasonably good sum in Franklin Smaller companies Fund due to two reasons :
a) Almost every analyst is of opinion that our economy is showing strong signs of revival.
b) Midcaps give better returns and are available at attractive prices.

Can someone suggest any other fund with long term perspective.

a) I take analysts views with a big pinch of salt. There are the doomsdayers as well, like Shanker Sharma, husband of Zia Mody.
b) Yes, they will give better returns, but they are also higher risk. I am not sure of the specific fund but Franklin funds are by and large very good. My favourite used to be IDFC Premier Equity but after Andrade quit I am a bit sceptical, at least for some time.

The issue is that any SME fund needs twinkle toes with their ears to the ground.

[carwatcher]

Are you sure about this, AFAIK her husband is Mr. Jaydev Mody, owner of Delta Corp.
They both are our client for past 25 years.

Originally Posted by sgiitk

Shanker Sharma, husband of Zia Mody

[pradkumar]

Hi,

It is difficult to recommend a long term equity large cap fund now. Some of the erstwhile favorites 5 to 8 years back such HDFC Equity, HDFC Top 200. Reliance Vision, Franklin India Blue chip, etc. have fallen in ratings.

The best strategy is to buy a 5 star rated large equity fund from a fund house that offers many other options, keep a watch on your investments every six months, and do a switch once a year if needed. Remember that you can switch funds only within the same fund house and the entry load is lesser when you switch.

If you are looking for a balanced fund, HDFC Balanced is a safe bet, but you can never say because HDFC Prudence (managed by India's best rated fund manager, Prashant Jain), which was the star among balanced funds has a 3 star rating now.

The moral of the story: You cannot bet on one fund for long term. You have to keep a watch and switch funds once a year, if needed.

Frankly, this year is the year of the small and mid caps and it is too difficult to recommend a large cap going by the performance.

Pradeep

Originally Posted by carwatcher

I have invested today a reasonably good sum in Franklin Smaller companies Fund due to two reasons :
a) Almost every analyst is of opinion that our economy is showing strong signs of revival.
b) Midcaps give better returns and are available at attractive prices.

Can someone suggest any other fund with long term perspective.

[deepv]

Originally Posted by pradkumar

The moral of the story: You cannot bet on one fund for long term. You have to keep a watch and switch funds once a year, if needed.

Not quite sure one year is a good period to put a fund out of portfolio, though should definitely be put on watch.
One must keep evaluating the performance of their funds say every six months (or possibly every quarter), and if certain fund happens to under-perform w.r.t. its peers continuously over multiple such periods and manager's response doesn't seem logical, then you may want to switch out of it.
Better approach would be to possibly slow down (or stop) your further inputs to that fund and give it most opportunity to bounce back, remember you chose it in first place because of certain liking.
Also table toppers mostly (if not consistent for a few quarters looked individually) would have already had their run, and may not return at same level going forward.

[pradkumar]

Most of us do a lot of research and deliberation before picking a fund. Since we have chosen a fund after a lot of care, give it a year to do a turnaround. If the ratings fall from 5 star to 4 star, you can still continue assuming that it is a temporary blip, but if it falls to 3 stars, it is time to switch.

I am not sure whether to stop SIPs if the rating falls from 5 stars to 4 stars because if the fund turns around, an opportunity is lost assuming that the NAV has also fallen and one would be buying more units. It is a difficult call.

Experts can comment.

Pradeep

Originally Posted by deepv

Not quite sure one year is a good period to put a fund out of portfolio, though should definitely be put on watch.
One must keep evaluating the performance of their funds say every six months (or possibly every quarter), and if certain fund happens to under-perform w.r.t. its peers continuously over multiple such periods and manager's response doesn't seem logical, then you may want to switch out of it.
Better approach would be to possibly slow down (or stop) your further inputs to that fund and give it most opportunity to bounce back, remember you chose it in first place because of certain liking.
Also table toppers mostly (if not consistent for a few quarters looked individually) would have already had their run, and may not return at same level going forward.

[deepv]

Originally Posted by pradkumar

I am not sure whether to stop SIPs if the rating falls from 5 stars to 4 stars ...

Pradeep .. I didn't mean to stop SIPs at the onset, its when we have decided to exit of the fund then may be retain present holdings another couple of quarters (unless something is totally wrong with the fund).

You are right .. its difficult call, we can't give generalized patterns.

[Rachit.K.Dogra]

I have been thinking about this post for sometime as one of my SIP was about to expire.
I have currently 2 Mutual Funds. Both of them Tax Savings one (ELSS)
1) ICICI Pru Tax Plan (G) (5K per month) (Invested for 4 years)
2) SBI Magnum Tax plan (D) (3K per month) (Invested for 7 years)

My SBI fund SIP is about to expire. As things have turned out I have used this particular fund more like a savings account rather than an investment. Every time I would need some money, I would withdraw funds from it. Because of which its size is lesser than the ICICI one. I have not misused the ICICI one that much. I plan on stopping this habit but I fear for any cash requirements I will still have to go to the SBI one.

The Dilemma:
I have realized that with my PF contribution and the ICICI Pru mutual fund make up most of the 1.5 Lakhs of Sec88 Tax exemption.

I want a SIP and would be investing 5-7K per month.

Here are a few option:
1) Renew my SBI Magnum - The only thing that I find attractive about these is I don't have to worry about capital gain and stuff.
2) Get any other Tax Saving plan
3) I read that Equity based schemes after 1 year are exempt from Capital Gain tax. Now does SBI Small and Midcap fund sound okay? Any suggestions here?
4) I should put 2K in SBI Magnum and 5K in some other Equity based fund.

If I change the fund house:
1) Will I have to get KYC done again from them?
2) Will I be able to just start a new SIP from any of there websites straightaway?
3) As of now I can start an SIP in any direct funds from SBI and ICICI because I have their online accounts and folios under them.


Regards
Rachit