I invested in HDFC Core and Satellite Fund (Growth). This was via SIPs from May 2007 to May 2008. I discontinued because I felt the fund was not doing well. Should I sell my investment or let it stay? Should I switch to some other HDFC fund? I already hold HDFC Equity and HDFC Top 200.
HDFC Core and Satellite invests heavily in mid-cap stocks. The fund did not do too well in 2007 but faced the downturn of 2008 well. Overall, it has been an average performer.
Do not jump in and out of schemes based purely on short-time performance. Stay invested in this fund and keep tracking its performance. If you are still disappointed, then sell your units but do not pick up another fund from HDFC. Diversify your holdings. Go for a mid-cap fund from another house.
How good or bad is Reliance Diversified Power Sector Fund vis-à-vis Reliance Regular Savings Equity Fund? My investment horizon is three years.
The two funds are not comparable, as they differ in their investment mandates. Reliance Regular Savings Equity is a diversified equity fund. Reliance Diversified Power Sector is a thematic fund: it invests in stocks companies associated with power sector. Ideally, you should avoid theme-based funds. They will perform depending on how the market is responding to that particular theme.
On a standalone basis, Reliance Regular Savings Equity has shown the potential to perform during both good and bad times.
I am about to invest in mutual funds. Could you make fund suggestions? These are my requirements: 1) ELSS - Monthly SIP of Rs 2,000 2) Non-ELSS - Monthly SIP of Rs 1,000
For ELSS investments, choose Sundaram BNP Paribas Taxsaver or Franklin India Taxshield. These funds allow investors a tax deduction on investments up to Rs 1 lakh under Section 80C of the Income Tax Act. But, do remember these funds have a three-year lock-in.
For investments other than ELSS, you may choose a balanced fund such as DSPBR Balanced or HDFC Prudence.
I invested Rs 35,000 in the NFO of ICICI Prudential Indo Asia Equity Fund in September 2007. Two years ago, I invested in Magnum Global. Should I hold or exit?
-Zain Uddin Ahmed
Ideally, you should avoid investing in NFOs. Select funds which have a good performance history. ICICI Prudential Indo Asia Equity Retail invests 65 per cent of its assets in Indian stocks, with the rest in Asian stocks. What is crucial is your reason for investing in this fund. Did you want a global exposure to your portfolio? In that case, you could give it some more time. It’s a decision only you can take.
Magnum Global’s objective is to invest in companies where part of their earnings comes from foreign currency. Of late, the fund’s performance has deteriorated. Watch it for a while before you exit.
Please note that investing in equity requires patience. You must not get disheartened over short periods of time. But, keep tracking performance closely to decide whether or not it is worth moving out of.