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I have invested in the following funds through SIP from August 2010.
1) BSL Dividend Yield Plus - Rs 2,000
2) HDFC Equity - Rs 3,000
3) HDFC Top 200 - Rs 2,000
4) Reliance Regular Savings Equity - Rs 2,000
5) Templeton India Growth - Rs 2,000
I stopped the SIPs in funds under serial number 4 and 5 in March 2012 and started investing Rs 2,000 in IDFC Premier Equity and Rs 3,000 in DSPBR Top100.
Could you advise me on which fund to retain/add to make it an ideal portfolio?
Manjula You have chosen a good set of funds for your portfolio and have also actively changed the funds, by starting investments in two other schemes. But your portfolio can still do with mild tightening.
Both HDFC Equity and HDFC Top 200 have considerable overlap in their holdings. Hence, exit HDFC Top 200 and move that amount to HDFC Equity, where you can invest Rs 5000.
Reliance Regular Savings Equity and Templeton India Growth have reasonable long-term track records. But you have shifted to more impressive funds, which is a good move.
*** I am 25 and my monthly income is Rs 37,000. I wish to invest in gold funds. I think HDFC Gold fund gives better returns when compared with the others. But there are reports that gold has already reached its maximum value and there is limited scope for rapid increase in the price hereafter. So, should I invest in this gold fund or not? Please suggest any gold fund which gives better results with a good long-term record.
Satheesh Gold must form only a part of your entire portfolio and not be the only asset where you park your money. You must not go overboard in investing in gold alone.
At your age, barring any definitive commitments, you must invest more in equity mutual funds. Ideally, at 25, you must have a portfolio where 70 per cent is in equity, 20 per cent in debt instruments (PPF, FDs,etc) and the rest in gold.
Gold has indeed had a fantastic rally over the past five years, when a confluence of many global and local factors aided its rapid climb. Besides the normal dynamic of demand and supply, gold prices depend on the state of the equity markets, the strength of the dollar and the global investment climate. It would be difficult to predict if the past rally would be sustained in the future.
The yellow metal can at best be considered as a hedge against inflation. In 2011, the price of gold (in rupee terms) rose 31 per cent, while in 2012, the increase was 11 per cent.
There is very little difference in returns among different fund houses, with just a few basis points separating them. HDFC Gold fund is a good scheme to invest in. You can also consider Reliance Gold Savings Fund.
Alternately, you can invest in gold through ETFs (exchange traded funds). You can invest in Goldman Sachs Gold BeES.
*** I had investments in the following funds through SIPs, and have recently ended their term: Reliance Equity Opportunities, Reliance Banking, HDFC Equity, HDFC Mid-cap Opportunities, HDFC Balanced, ICICI Pru Focused Bluechip, Quantum Long Term Equity, UTI Opportunities, IDFC Premier Equity Fund Plan A. I am planning to add SBI Magnum Emerging Business also.
Kindly advise me on the same and which ones to continue or discontinue. All the funds are in the growth option.
Mahesh
Although you have chosen a good set of funds, there are still some modifications that may be made to make your portfolio robust.
Reliance Banking has delivered quite well over the past several years. But being a sector fund, it is risky. Unless you are extremely bullish on the banking space, you need not renew SIPs in the fund.
You have three funds from the HDFC stable. This leads to too much concentration within a fund house and also denies you the opportunity to explore the investment styles of other asset management companies.
HDFC Midcap Opportunities has been a good performer over the past five years. But you already have two mid-cap funds in IDFC Premier Equity and Reliance Equity Opportunities and hence there could be a portfolio overlap. Hence you can discontinue investments in HDFC Midcap Opportunities. Continue to hold HDFC Equity and HDFC Balanced.
ICICI Pru Focussed Bluechip, Quantum Long Term Equity and UTI Opportunities have a steady long-term track record and can be retained.
You need not invest in SBI Magnum Emerging Business, a top performer in recent times, as your portfolio already has the requisite funds.
Review the performance of the funds you hold periodically, say once a year, to take corrective action and to rebalance.
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