Best mutual funds to buy now

Have a query regarding mutual funds? Maybe we can help.

Drop us a line and our expert, Anil Rego of Right Horizons, will answer it.

Got a question for Anil Rego? Please write to us at getahead@rediff.co.in with the subject line as 'Mutual fund query'.

Dear Anil,

I had invested in Income Fund Birla half yearly Dividend option Plan A in Jan.2009. Till date my investment has not come at par. What do you advise.

Sandeep

Anil: Income funds have gradually lost flavour with the interest rates making a turnaround, we suggest you to exit the same and plough in the same into equities, at dips. This will help gain returns over a medium term, given the outlook remains positive. However, we reiterate that Income funds and equities are of different asset classes.

Sir, Pl. suggest 4/5 good & aggressive large cap & midcap funds in the time horizon of 5 years to invest through SIP.

Bimal

Anil: Largecap funds:

• DSP BR Top 100
• HDFC Top 200
• Birla Sunlife Frontline Equity

Midcap funds:

• Reliance Regular Savings Equity
• Reliance Growth
• SBNPP Select Midcap
• Birla Sunlife Midcap

Largecap funds are inherently less prone to risk, hence defensive by nature. Midcap funds are aggressive and of higher risk profile.

Dear Sir,

I want to invest in 6 different funds with Rs.2000 in each fund each month for 15 years, is it advisable or will it be better to invest in 3 funds like Kotak K30, HDFC Top200, Birla Sunlife Frontline Equity, SBI Contra, ICICI Dynamic etc.

Please suggest 10 best performing funds in which I can invest for long term, say, 15-20 years.

Secondly, should I go with financial advisors like Dawney Day AV etc. or should I go directly to Financial Institutes? According to the advisors, the entry load 2.25% is going to be waived off w.e.f. 15th Jul'09. Is there any notification regarding this?

Please guide me.

Arindam Mukhopadhyay

Anil: Largecap funds:

• DSP BR Top 100
• HDFC Top 200
• Birla Sunlife Frontline Equity

Midcap funds:

• Reliance Regular Savings Equity
• Reliance Growth
• SBNPP Select Midcap
• Birla Sunlife Midcap

For the monthly investment of Rs. 12k, we can use not more than 4 funds -- with diversification amongst Equity MF -- largecap, midcap and Gold MF.

You can use a financial advisor who will be able to help you choose the funds, also will effectively monitor them. If you are able to monitor yourself and have some expertise in markets, then you can look at doing it on your own.  The entry load is scrapped w.e.f 01 Aug 09.

Dear Sir,

I am an NRI working in Oman. I would like to inform you that I have two MF schemes:

Sundaram BNP Select Focus Growth and
Reliance Infrastructure -- Growth (the latest scheme)

Above both taken at one time purchase (not SIP). If I have to take some SIP considering long time which one I should buy considering that I invest Rs 2000 per month?

Jignesh

Anil: You can initiate SIP into SBNPP Select Focus and Reliance Regular Savings Equity: one which is largecap and the other is midcap. We do not suggest addition of sector funds in your portfolio at this stage.

Hi, i m sanjeev from Delhi i have invested in HDFC TOP 200 fund: dividend & Kotak Opportunities fund. Suggest me for the future?

Sanjeev Kalra

Anil: HDFC Top 200 is a good large cap fund. I suggest you continue with this fund. I would suggest you replace Kotak Opportunities Fund with a midcap fund like Sundaram Select Midcap or Reliance RSF.

Sir,

I am investing Rs.1,000 every month in the Franklin India Prima mutual fund scheme through the SIP route.

I would be grateful, if you could advise me whether I can proceed with the same and whether Frankline India Prima is a good or not.

Anjali A. Kulkarni

Anil: Prima fund was a good fund of yesteryear, however, the fund sobered out over the past few years. This is probably on account of the assets going up considerably and becoming unmanageable. We suggest you switch and start fresh investments into funds like Reliance RSF and Sundaram Select Midcap.

Hi Mr Anil,

I have invested a handsome amount in Reliance Natural Resources Fund which is not moving well in the last year so. Recently i have invested Rs.50,000.00 in Reliance Infrastructure Fund. What are the future of above funds. Should I switch from RNRF to some other fund. Please guide me.

Narendra, Jharsuguda, Orissa

Anil: Infrastructure is likely to be the focus, there could be considerable funds deployed into various infra projects, this could boost the reliance infra fund. Reliance Natural Resource has been a laggard for a while now, we suggest you to shift into a diversified equity fund (Reliance Growth / regular savings equity) with the same AMC. We also suggest you to evaluate all NFOs before adding them into your portfolio, also if you are unable to envision the market cycle for sector funds, it is best to refrain from investing in them, they are highly risky funds and meant for active investors who would like to juggle the sectors based on the outlook.

Hi,

I've invested in different Mutual Funds as mentioned below. I just want to know Is there any facility to sell the same online?

• SBI Mutual Funds
• HDFC TOP200
• HDFC Growth
• UTI Infrastructure
• Sundaram BNP Paribas
• Reliance

Pardeep Gupta

Anil: Any buy/sell transaction of Mutual Funds should be necessarily routed through the Mutual fund house. There is a simple transaction slip that you need to submit if you would like to sell your units in part or full. Most fund houses allow online transactions but one needs to register with each fund for the same. There are also some platforms that allow online transactions.

Hi, My query about MF is, Mutual fund consists a number of equities/debts of an entity. If the that company is issuing a bonus share or dividends, will that be distributed to the MF holders. For example, I am holding HDFC tax saving growth, and it consists 5.56 % of ICICI bank. If ICICI declares any dividend or bonus, Am I eligible for the same. Or else how am I benefited from such dividend or bonus?

Jimmy

Anil: All returns arising out of the shares purchased will be added to the fund and hence dividends and bonus accrue to the fund you have invested in. Since all the returns are distributed back to the investor in the case of mutual funds, the Net Asset Value of the fund which is the current value of your units incorporates the same. In the case given by you, if ICICI gave a bonus, the same would come into the common pool of assets of the fund and while calculating the value of ICICI in the portfolio, the number of shares including bonus units will be the basis for the same and the market price of ICICI would be considered.

Hi Sir,

I have taken a Tax saving MF in 2006 it got matured in 2009.

I have not taken the money on its maturity. My questions is: if money is kept for say 6 months after maturity will i get benefit or I will get same amount what value it was at the time of maturity?

Vaibhav

Anil: You can hold for any period after the lock in. You would get the benefit of the NAV of the fund on the date you exit from the fund. Thus, if the market has moved up since end of the lock in period, then you will get a higher amount. If the market has fallen, then the value will be eroded and you will get a lower amount.

Hi, I want to invest for long term. Please suggest 5 Mutual Funds for each of below mentioned categories.

Equity: Diversified
Balanced: Equity Oriented

I will be very thankful.

Amiya

Anil: Diversified equity

• Birla Sunlife Equity
• Fidelity Equity
• Reliance Regular Savings Equity
• HDFC Growth

Balanced:

• HDFC Prudence
• SBI Balanced
• FT Balanced
• ICICI Pru Balanced

Dear Sir,

I have a home loan with ICICI. Their PLR is at 15% and my loan is at Variance of 3%. Hence the rate now is 12%. When I checked with them on the rate offered to new loan takers, they offered to reduce my rate to 10% by paying a 2% switch fee.

My doubt is if after paying this, will the variance be increased to 5% or is it fixed at 10%. If the variance is increased, it will mean that any furture increase or decrease in PLR will automatically change my rate.

Request you to guide me on this.

Prasad

Anil: Normally, the variance will increase to 5%. It maybe a good idea to check with the bank to be doubly sure.

Sir, i would like to invest about Rs 10000/pm in sip of  some of large cap diversified equity funds  and i can hold them more than 8 years. could you pl suggest the schemes? i have alreday invested in hsbc equity, hdfc equity, reliance vision, reliance growth and no sips in any of these funds at the moment.

Srinivas

Anil: Funds we suggest (largecap equity)

• HDFC Growth/ HDFC Top 200
• DSP BR Top 100
• Reliance Vision
• SBNPP Select Focus