Thursday, January 22, 2009

Portfolio advise needed

Mr.Raghu wrote ;

I would like to thank you for providing wonderful guidence for us. Your has helped me to choose the best funds.

i am 32 yr old and my investment plan is 5-10 yrs.

my portfulio is 1000 rs SIP in the following funds.

DSP Top 100 Equity
DSP Balanced
Reliance RSF Equity
Sundaram Select Focus
Fidelity Equity
Templeton Equity Income

iam also putting money requied for short time in DWS money plus dividend fund on time to time.

i can put another 3000 rs as sip in equity. in which of these funds i should increase sip or should i add any other fund missing from my portfolio

Dear Raghu,
First of all, thank you for your nice words.
You have a good mix of funds in your portfolio. Your portfolio need very little tinkering. You can reconsider your sip in Reliance Regular Savings Fund-Equity Fund because of its slight overexposure to mid-caps and small caps. It sure had a terrific run in the past one year or so, but I would be more comfortable with Reliance Growth Or a Reliance Vision fund rather this fund.
You can also consider adding DSPML/Reliance Natural Resources fund to your portfolio. Going forward, most fund managers are of a view that natural resources should be a outperformer.
Best of luck,
Srikanth Shankar Matrubai
Also visit for an indepth Equity Analysis

loss in existing sips, what to do?

Rajeev Bora wrote :

Substantial Loss in existing SIPs (over last one year) –portfolio
as in following funds– may please advise for future course of action.

Birla Sun Life Frontline Equity-D
HDFC Top 200-D
Kotak Opportunities-D
Magnum Contra-D
Magnum Multiplier Plus-G
Reliance Diversified Power Sector Retail-G
Reliance Diversified Power Sector Retail-G
Reliance Growth-D
Reliance Natural Resources Retail-G
Reliance NRI Equity-G
Reliance Regular Savings Equity
Sundaram BNP Paribas Select Focus Reg-D

Tata Indo Global Infrastructure-D
Tata Infrastructure-D
Tata Infrastructure-G

Please advise....
Rajeev Bora

Dear rajeev,
My sympathies lie with you. This Market Meltdown has not spared anyone and you are no exception. Most of your investments are into good funds and need very little tinkering.
While I would advise you to completely switch from Reliance Diversified Power Sector Fund into Reliance Vision Fund, even at a loss, as Reliance Vision has better prospects than Reliance Diversified Power Fund.
You also have two other Infrastructure Fund in Tata Infrastructure Fund and Tata Indo Global Infrastructure Fund. You need to again switch over here from Tata Infrastructure fund to Tata Pure Equity fund, which has a very Good Track Record.
However, all your other funds are very good and do continue your sip in these, you are sure to not only get back your investment but also make decent profits in about 3 years time.
If possible, add Franklin Templeton PE Ratio Fund of Funds, which is my latest recommendation to ALL clients. This Fund automatically increases/decreases exposure to Equity/Debt depending on PE Ratio of the Sensex and would compliment your portfolio.
Best of luck,
Srikanth Shankar Matrubai
Also visit for an indepth Equity Analysis

Letter from Grandpa

Read this, it is very interesting.
An open letter from Grandpa

LATELY, I have been thinking a lot about the Lehman crisis . Spending money that they didn't have and going beyond their means is one of the main reasons for their situation today. In fact that is the cause for the current economic crisis in the US.
When I see all this happening, I can only remember the good old days. Then, karz was bad. People looked down upon those who took loans. Parents would not give their daughter's hand in marriage to a man with loans.
But of course, the times have changed now. Everyone I know has a loan. The buzz word is EMI (equated monthly installment). Today, you can buy everything on EMI - a house, a television, an i-Pod. In fact I know of someone who just bought a fancy BMW 3 series on EMI, instead of buying a cheaper car outright with cash. I mostly prefer to take public transport, but then I am an old man with old thoughts!
Anyway, coming back to what caused the crisis. Imagine having Rs 2 lakh in your bank account, no regular income, yet buying a house worth Rs 65 lakh, in the hope of selling it for a higher price. Even if the price of the house fell by just 5 per cent (that is Rs 3 lakh), you will go bankrupt. This is what Lehman Brothers did; with around USD 20 billion they went and bought assets worth over USD 600 billion. Isn't it suicidal and simply foolish?
I am sure things would have been different, had I been the head of Lehman brothers. But who wants an old conservative man like me to head a complex financial institution.

But there are a few lessons that we can learn:

1. Live a balanced life and avoid overspending.

Tip: As soon as you get your monthly salary, set aside a fixed amount, usually 35 per cent, for insurance, savings and investments. You can then spend the rest.
2. Not all loans are bad. Loans that are 'need based' (home loans, education loans) can always find a place in your finances against those that are largely 'want based' (personal loans, car loans).

3. Borrow only if repayment is financially comfortable.
A thumb rule: Keep EMIs within 30 per cent of your monthly income

In that respect, there is one American who I really respect – Warren Buffet. He has lived in the same ordinary house for over three decades, drives his own medium sized car and leads an extremely regular 'middle class' life. If that's all it takes for the richest person on earth to be happy, why do all of us need to take extra stress just so that we can get things which aren't even essential?

India still has a lot of growth ahead and the future holds immense opportunities for us. Let us make the most of it and save and invest it wisely instead of wasting our precious little on things we don't need.

HDFC Mutual Fund people sent me this interesting letter.
Srikanth shankar Matrubai

Also visit for an indepth Equity Analysis

FDs or Mutual funds?

Purvesh asked :
Hi is investing in FDs or mutual funds a better idea in current market conditions a goof idea, if MF then which funds are safe to invest

Hi, purvesh,
If your outlook is short term of say below 6 months, then FDs are the best option for you, anything above 6 months, definetely you should consider Stock Markets seriously.
The ongoing volatility clearly shows that the stock selection, entry exit points are best left to experts, and who better than Mutual Fund Managers to manage our money. If you look at the recent history, almost all Funds are sitting on cash of above 30%, and in some cases, even 40%, which clearly shows that they had a feeling of this meltdown.
Of course, the meltdown was so savage that even the most intelligent Fund Manager would have been stumped.
But, still, my vote is go for Mutual funds through SIPs. Invest in good Diversified funds with Good track record. some of them you can consider for investing are
Birla sunlife Equity fund
DSP Equity fund
DWS Alpha Equity Fund
Fidelity Equity Fund
HDFC Prudence Fund
HDFC top 200 Fund
Kotak K 30 fund
Reliance Growth Fund
Sundaram Select Focus fund

Best of luck,
Srikanth Shankar Matrubai
Also visit for an indepth Equity Analysis

Lesson learnt by me in this Market Crash

The five year Big Bull run made everyone that there will always be sunshine. We tended to ignore warning signs and just brushed them aside as an aberration. I was no exception. Have I lost money?. Yes and no. Yes, because I am stuck with an asset which at a given point of time would fetch a lower valuation. NO, because, the loss is only notional.
I have seen two Bear Runs. First, post the Harshad Mehta Scam in 1992-93, next the Technology Meltdown in 2001. I learnt two Different Lessons in these Bear Runs.
In the first Meltdown, I learnt that "Never Invest All your Money at one go, it may the peak you are investing". In that Meltdown, where I burnt my finger as speculator, I qualified to become myself as an Investor. Lesson Learnt : Invest regularly at periodic intervals.
In the second Meltdown, I learnt that "Never Overexposure yourself to One Particular Sector". Lesson Learnt : Do not put all your eggs in 1 Basket. And the Biggest lesson which I learnt from this Bear phase is that I sold Good Stocks to protect my Huge losses in my Bad Stocks. So, ultimately, I was left with Dud Stocks and devoid of Blue Chips. And it took nearly 3 years to get my portfolio on the right track.
And in this present Meltdown, I have learnt not one but Two Big lesson, First, Book Profits Periodically.
Second, Spread Your Investment across Asset Classes including Debt.
I have taken these losses as tuition fees that I have paid to learn from the Markets.
The Biggest Reason why investors lost heavily in this market was due to the prolonged Bull run of 5 years, which made people invest without doing any research due to stocks going up almost every other day.
For me, the market is like an ocean. Anything you throw into the ocean always come back. Whatever you throw into the market will ultimately come back, provided you follow the market discipline.

I may sound naive, but I don't think I've lost anything. That is I have lost money on paper, which I had bought long long time age, and I am sure they will be back up sooner rather than later. The stock market going down doesn't mean the end of the world. The compaines I hold still continue to rake in profits.

But, yes, my faith to be completely invested in equities has been ripped to shreds, as the even the bluest of blue chips have got hammered. So, while I have not changed my current holdings, I will be looking to change my future asset allocation with a provision for debts and a bit of cash reserves to go with.
But, thankfully, I am not even 40 yet, so retirement is still a long way. I am sleeping peacefully, for I know I do not need this money for another 15 years at least.

My advice would also be on the same lines. It is always wise to have a properly diversified investment strategy based on your risk tolerance and as you age, you should become more conservative and shed your aggressiveness and shift towards debt and Large Cap Mutual funds.
I also plan to diversify further by investing in some International Funds.
I also plan to invest through SIPs to take advantage of NAV volatility (and indirectly time the market!) and restrain myself from making Lumpsum Investment.
I also plan to diversify further by investing in Other Asset Classes too like Gold, Silver and commodity funds by committing a small percentage.
I have decided not to borrow funds for investing. (this lesson I learnt in 1992-93 bear run).
I have decided to avoid ULIPs.
I intend to invest only for Long Term.
Best of luck,
Srikanth Shankar matrubai

Also visit for an indepth Equity Analysis

Has the Markets Bottomed Out???


You`re going to think I`m crazy for writing this, but right now, there is less risk in stocks than at any time in our lives. Do not take my word just like that, take it from what the greatest investor in history, Warren Buffet, said only yesterday "It's time to BUY". Warren Buffet has not made such an enthusiastic statement in public in the last 34 years.
Stock markets are the best asset class to invest in but at the right time, right amount and right direction of the market. Investments in the markets are also a great learning experience which should always be taken in the right spirit.
When you understand the businesses you`re holding(the stocks you are holding), what they`re worth, and what kind of future they have, you can sleep soundly at night, no matter what the share prices do in the short term. Peter Lynch, the famous Fidelity fund manager, says the secret to getting rich in stocks is not getting scared out of them. The secret to not getting scared out of stocks is to do your homework and know what you`re holding.
Companies like Reliance and L&T are cash generating machines. They have great businesses. Hang on to these good businesses, they are worth far more than they are being traded these days. They are traded at ridiculous valuations.
Far from being scared, you should take this opportunity to Get yourself some Great Stocks which are available at dirt-cheap valuations.
Buy now, then sit back and enjoy your coffee, tea or whatever. Don`t look at the stocks for the next six months, whatever happens. This way your next Diwali is going to be fabulous, like you have never had earlier.
Best of luck,
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Templeton India Equity-SIP: Advice needed

SURESH wrote

I am investing thru`SIP (for 12 months) Rs1000/pm in TEMPLETON INDIA EQUITY INCOME FUND DIVIDEND PLAN since Jan`08 but off late I have noticed that rating for this fund has gone down to 3* in money control and in value research on line it is unrated,kindly advice whether I can continue till Jan`09 or cancel and go for better MF.

Need your valuable advice.


Dear Suresh,
Templeton India Equity Income Fund invests largely in International funds of High Yielding Dividend Stocks. This ia a good diversification and before the market termoil, the fund was doing exceeding well. Its performance lately has been lacklustre due to meltdown in stocks worldwide. Still, it has outperformed even in this downfall. And, more importantly, its recent underperformance has also been due to the Strong Dollar. As you may be aware, Dollar is expected to correct very sharply to sub 40 levels which would give a BIG boost to the NAV of the fund. As such, not only can you stay invested in the fund but also can continue the same when the time for renewal comes up.
However, it would have been better if you had given your full portfolio for a much deeper analysis.
Best of luck,
Srikanth Shankar Matrubai
Also visit for an indepth Equity Analysis

Good Funds in these Crisis Times....

One blogger Mr.Kumar, queried :

Your blog has really helped me gain a fair amount of knowledge about mutual funds.

In this time of crisis, please let me know which MFs are good to buy. After buying them, I can wait for a minimum of 3 years. I am new to MFs, about 7-8 months ago bought SBI's Tax gain and Tax advantage, each 25k worth, one time investment, both not doing well, and recently about 2 months ago bought 5k worth of Reliance Natural Resources growth fund units. I can invest/save about 10k per month. Please advise me as to which funds I can invest in at the moment. Thank you.
G S Kumar


Dear G,

Your present investments are not doing well in line with the market. So, there is no point in worrying about them. You seem to have invested during the peak of the markets and hence the decline. Out of your 3 existing funds, two, namely, SBI Tax Gain and Reliance Natural Resources Fund are good and can be held on. However, SBI Tax Advantage is not a good investment, moreover, it is a 10 year Close ended Fund. You have very little option, expect to hold on this fund also.
While 3 years is a good enough time for a fund to deliver above average market returns, it would be wise if you spread your investment into 5 fund with 2000 each. Go for different dates.
My pick of funds for you are :
1. Birla sunlife equity Fund
2. DSP Top 100 Fund
3. Fidelity Equity fund
4. HDFC Prudence Fund
5. Sundaram Select Focus fund
You can split your sips into 1000 each (500 in Fidelity and Sundaram) and invest on different dates to take maximum advantage of NAV Volatility and earn that extra. \
Best of luck,
Srikanth Shankar Matrubai

Also visit for an indepth Equity Analysis

Negative Returns in Liquid Fund??????

Dear All,
Recently, Business Standard carried a article where it claimed that a Liquid Fund from Edelweiss Mutual Fund has posted a Negative NAV. I was stumped, how can this happen?. It was next to impossible.
Thankfully, Edelweiss People responded with a email clarifying things. This is how their email went :

From: EdelweissMF
Sent: Wednesday, October 15, 2008 11:43 AM
Subject: IMPORTANT: Clarification on today's article in Business Standard
Importance: High

Dear Sir / Madam,

With reference to the article on "Edelweiss Liquid Plus Fund Dividend Fortnightly " having seen negative returns in Business Standard today, please note that this data is factually totally incorrect and incomplete. While the source of data is valueresearch and from a factual point of view, the NAVs mentioned are right, the interpretation of data by the journalist is absolutely wrong and irrelevant. The journalist has first of all compared returns of the dividend option (instead of growth as is the industry norm). Moreover, he has incorrectly presented this incomplete data. The reason why there is a fall in the NAV is because of a declaration of dividend on Monday, the 13th of October on the Friday NAV. Obviously if a dividend has been declared in any scheme, the NAV will fall to the extent of the dividend declared and that is exactly what has happened in this case.

Please not that there has not been even a single day of negative returns in either the Edelweiss Liquid Fund or the Edelweiss Liquid Plus Fund till date.

Enclosed are the returns as on October 13th 2008 of both Edelweiss Liquid Fund and Edelweiss Liquid Plus Fund:


Scheme Name

NAV (13-Oct-08)

1 Week

2 Weeks

1 Month

Since Inception

Edelweiss Liquid Fund - IP - Growth






Edelweiss Liquid Fund - Ret - Growth






Edelweiss Liquid Fund - Super IP - Growth






Crisil Liquid Fund Index





Scheme Name

NAV (13-Oct-08)

1 Week

2 Weeks

1 Month

Since Inception

Edelweiss Liquid Plus Fund - IP - Growth






Edelweiss Liquid Plus Fund - Ret - Growth







Crisil Liquid Fund Index





Returns are computed of the growth options of the respective schemes. Past performance may or may not be sustained in future. Such information is not necessary indicative of future results and may not necessarily provide a basis for comparison with other investments.

Both Edelweiss Liquid and Liquid Plus Funds continue to outperform their benchmark across various time frames.

We look forward to your continued patronage of our funds.

Warm regards,


And, wonder of wonders, Business Standard carried the Clarification the next day.
Thank God for small mercies.
Srikanth Shankar Matrubai

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Want to have 2 crores in 10 years

Blogger Prathibha Mahesh asked :
Please review my portfolio and advice on my next financial move.

Age 30

Looking for a retirement kitty of 2 Crores by 40.

Current Investments:

SIP 25 K per month ( Current Value : 5.75 Lakh )

Fidelity Equity Fund - Gr 2500
HDFC Equity Fund - Gr. 10000
HDFC Prudence - Gr. 10000
Reliance Vision Fund Gr 2500

ICICI Life Time ( 30k Per Year Started in 2003 ) Current Value 1.9 Lakh

PF 2.9 Lakh
PPF 1.04 Lakh
401 K : 1.07 Lakh ( will be investing here for next 2 years to get company match as I am in US right now )
NSC : 10 thousand
Flat in Bangalore bought in 2004 for 15 Lakh. Current Price is around 35 Lakh. Loan Amount left 5.9 Lakh 13.5% interest

Fixed Deposit : 8 Lakh
Emergency Fund : 2.3 Lakh
Stocks : 30K

I want to invest another 10 K per month through SIP. Pls suggest some funds.

Thank you,
Pratibha Mahesh


Dear Pratibha Mahesh,

You seem to be on the right track to accumulate 2 crores in about 10 years time. Your present sip investments are all very good, a tad conservative I feel. However, because of this, you have been saved the pain of the BIG downturn other funds had to face. Going forward, you should consider switching your 10000 sip of HDFC Equity into two sips of 5000 each in
Sundaram Select Focus Fund
Birla Sunlife Equity Fund.
Since your goal is 10 years, you do have sufficient time on your hand to allow your fund to grow. Your 25k sip should at a conservative estimated return of 15% easily give you 65lakhs.
You intend to invest another 10k per month, so your investment of 35k per month should give 92 lakhs in 10 years time at a conservative return assumption of 15%. So, you are on the right track.
You also need to rejig your existing 25000 sip. So, ultimately your 35000 sip should go to the following funds, in the manner explained:
Birla Sunlife Equity fund -- 5000
DSPML Top 100 Fund -- 5000
HDFC Prudence Fund -- 7500
HDFC Top 200 Fund -- 5000
Reliance Growth Fund -- 5000
Reliance Natural Resources Fund -- 2500
Sundaram Select Focus -- 5000

These funds should over a period of 10 years give you Good Returns and help you in accumulate your retirement kitty of 2 crores very easily.
Best of luck,
Srikanth Shankar Matrubai

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Advise on my portfolio

Hello sir

I have gone thrugh your while searchin for SIP ivestment.It provided me with some useful insights regarding SIP.I am a 21 year old working software professional, i would like to invest 3000 in SIP that would be a part of MBA expenses.So i'm investing 1500 which would give me tax benefits and d other 1500 in equity growth fund the following is my portfolio.

1000- Sundaram paribas BNP tax saver
500- principal tax saver
1000- reliance growth ( targetted at small and midcap )
500- Sundaram Select Focus ( targetted at Large cap )

Plz advice on my portfolio.should i go for reliance growth or hdfc growth or reliance rsf growth.
Thanking you



Dear Vemula Swamy,

Congratualtions Vemula Swamy, your portfolio is one of those rare ones which is perfect and needs little or no changes. Say thanks to your advisor. Your portfolio is a perfect blend of Large Cap and Diversified Equity. Continue with the same.
Regarding your second query, between reliance growth or hdfc growth or reliance rsf growth, I prefer HDFC Growth as you already have Reliance Growth. However, I would prefer you add Fidelity Equity Growth rather than the above mentioned 3 funds.
Best of luck,
Srikanth Shankar Matrubai.

Also visit for an indepth Equity Analysis

Is my SIP investments in the right funds?

Is my SIP investments in the right funds?

One blogger Mr.Nishan Asher queried "


I have an SIP plan in the following companies, please let me know if should continue stay invested with the same amount or should I stop or reduce the amount I invest monthly.

I am right now investing a Rs 5000 per month in each SIP

Birla Sunlife Mutual Fund – BSL Midcap Fund – Growth (B251G)

DSP Merill Lynch Mutual Fund – DSP India T.I.G.E.R Fund Grow-Reg (D13)

SBI Mutual Fund – Magnum Global Fund – G (L021G)

Sundaram CAPEX – Growth (S82)




Dear Nishan Asher,

Sadly, your portfolio lacks Good Solid Large Cap Funds. Stop your sips in all the existing funds IMMEDIATELY!!!!!.
Birla Midcap Fund, as the name suggests, is a Mid Cap Fund, which had a good run in the bullish times but now as with the case of all Mid Cap Funds, had a horrendously poor run. Mid cap funds do not look attractive even with a 3 years perspective. Stop your sip and for your existing investment, think about switching to Birla Sunlife Equity Fund.
DSP Tiger Fund and Sundaram Capex fund are both Thematic Funds. Both funds are heavily invested in Infrastructure stocks. With the economy taking a breather and Infrastructure Sector's future not looking rosy, you need to look elsewhere. Stop your sip in both the funds. Stay invested in both the funds for now.
SBI Magnum Global Fund is a Diversified Fund, but had a terrible past and a very poor track record. Stop your sip immediately and switch to SBI Bluechip Fund.
You can look at investing your 5000 * 4 sip into these funds, with different dates in each fund to take maximum advantage of NAV volatility.
1. Fidelity Equity Fund.
2. HDFC Prudence Fund
3. Reliance Growth Fund
4. Sundaram Select Focus Fund
All these funds have had a good track record both in bull and bear markets. Split your sip investment into different dates.
Review your investments every 6 months or so.
Best of luck,
Srikanth Shankar Matrubai.

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Shall I redeem DSP even at Loss?

A senior Citizen Mr.Sen wrote:
i understand that because of amalgamation of dsp ml with a singapore company called hardrock, investors have been asked to redeem if they wish at current nav

i have an investment of rs 15000 in dsp top 100, 30,000 in tiger and 20,000 in opportunity eq. these are doing so badly even my principal has been heavily eroded.

i shall be very grateful if please advise.should i redeem even at a loss of 23,000 rs.or should i let it be for a few months. here let me mention i am a senior citizen

thanks a lot


Dear Sen,
Being a Senior Citizen, you should have to invest in Good Large Cap Funds and not Sector/Theme Funds and not even Opportunity Funds, as these funds take lot of time in giving you returns.
But, first of all, let me assure you that DSP ML is now DSP Black Rock, as Meriyll Lynch People had already their Asset Managemnt Company Worldwide long back. DSP had not yet changed the name of the company, which they have now done. Also, in India, all Mutual Funds are run by Trust where even a change in Company which forms the Trust to run the Mutual funds has NO say in the Day to Day Affairs of the AMC.
Coming to your investment, your investments seem to have been done in the Peak of the bull market and hence, seeing such a HUGE erosion. The Best option for you is to 'JUST STAY INVESTED' and hold on for now.
The funds are good except for DSP Tiger which is a Infrastructure Fund and does not look promising even on a three year horizon. You can switch the same to DSPML Equity fund and stay invested for some time till the markets stabilise and then take a call accordingly.
Best of luck,
Srikanth Shankar Matrubai.

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Student's investment query

-->Chet had a investment dilemma and queried :
hello sir,
myself chet and currently I have 25000/- rupees with me and i want to invest in SIP.

I am an engineering student and my age is 23. I also get a scholarship of 8000/- per month and will be continued up to may 2009 so the total amount will be upto 35000/- saving minusing the tuition fees and living expenses.

Currently i have got an RD of 1000Rs from post office.

Please sir suggest me which SIP i should go with and my plan is to invest 1000Rs per month or 1500/- and also suggest me the period of investment.

With Best Regards,

Dear Chet,
Even though you have age on your side, so I would advise you to go for Diversified Equity Funds, simply because Sector/Theme Funds tend to be volatile and you being a student, you may require money at a very short notice.
I advise you to Stop your 1000 RD in Post Office immediately, as these tend to give very low returns even eroding your investment value when you consider Inflation too. Unless this amount is for an Emergency, you should stop this RD immediately and switch the investment into Mutual Funds.
I suggest you to consider investing 1500 in 4 Funds as follows:
500 * 1 in DWS Tax Saving Fund (500) (You can avail Added Bonus of Free Life Insurance of 5 times your Investment)
500 * 1 in Fidelity Equity Fund (500)
250 * 2 in Reliance Growth Fund (500)
250 * 2 in Sundaram Select Focus Fund (500)
These Funds are low on Risk and Above Average on Returns and Should Serve you all.
Best of luck,
Srikanth Shankar Matrubai.
Also visit for an indepth Equity Analysis

Add more ELSS???

Add more ELSS???
Mr.Rohan Agarwal wrote back with a new query :
Dear Shrikanth,

Thanks for replying to my last query.

To pay 0 tax on my income , i need to claim deductions of 45,000 under section 80c.

To do that i am investing 30,000 in ELSS and 15,000 in PPF.

I have invested 2,000 in each of the following ELSS Schemes.

DWS Tax Saving G

Fidelity Tax Advantage G

HDFC Taxsaver-G

Sundaram BNP Paribas Taxsaver

Principal Personal Tax Saver Fund G

I will further invest 4000 more in each of these , total of 30000.

Do you thing this is a good balance of ELSS Funds and currect number of funds for investing 30,000.

Thanks in Advance.

Rohan Agarwal.


Dear Rohan Agarwal,

You have the right mix of ELSS funds and you can continue to not only stay invested in these but also add more of the same.
You can however consider adding DSPML Tax Saver Fund which is more into Large Caps and could add stability to your portfolio.
Your exposure to Mid Cap and Small Cap is more through ELSS funds and not via Diversified Equity Funds, which means an automatic lock-in of 3 years, which should reward you by the end of lock-in term. And also, age being on your side, you need not at worry on this front. Your open-ended funds investment are in 3 Very Very Good Funds, which you can encash anytime without too much of a bruising.
Carry on without a worry and full of confidence.
Best of luck,
Srikanth Shankar matrubai.
Also visit for an indepth Equity Analysis

Thank you letter

Thank you letter

Mr.Nester Dias wrote back :
Thank you Srikant
Your input was an eye opener - I never did realise that so much of my exposure was into infrastructure. I think thats the difference between being a novice ( like me ) and someone more experienced
I agree with your reasoning - Also will do some more reasoning on the scrips that you mentioned.Thank you for your input and really appreciate .
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I need your advise

Mr.Sunder requested for advise :
Hello Mr Srikanth,

I am planning to invest Rs 10000/- per month in Mutual Funds and was researching the various options when I came across your blog. Your specific and clear advice in your blog is very helpful and easy to understand.

I am 39 years old and am at present saving about Rs 20000/- per month. I have some insurance policies for about Rs 8 lacs but not much of savings otherwise. I had a housing loan which I prepaid and closed in May this year. Now I need to build up some savings for the long term.I request your advice regarding the correct portfolio for me.

Thank You and Best Regards


Dear Sunder,
It feels great to know that you have already closed your housing loan. And your insurance of 8 lakhs is also enough for now. Maybe you need to take a Term Insurance of about 12 lakhs which will cover you for about 20 lakhs which is quite a substantial amount. This may set you back by just about 500 per month.
That leaves about 19500 per month of savings of which you can channelise 9500 through Mutual Funds for maximum returns.
Since you are only 39 and also not having any BIG expenses in the near foreseeable future, you are ideally placed to earn Good Returns through investment in mutual funds through Sips. I have prepared a shortlist of funds for you investment. Do consider investing in them.
1. Birla Sunlife Equity Fund 1000 * 1 sips per month (1000)
2. DSPML World Gold Fund 1000 * 1 (1000)
3. DWS Tax Saving Fund 500 * 1 (500) (Here you will get the added Bonus of Free Life Insurance cover of 5 times your Investment)
4. Fidelity Equity Fund 500 * 1 (500)
5. Franklin Templeton India Equity Income Fund 1000 * 1 (1000)
6. HDFC Prudence Fund 1000 * 1 (1000)
7. HDFC Top 200 Fund 1000 * 1 (1000)
8. HSBC Equity Fund 1000 * 1 (1000)
9. JM Contra Fund 1000 * 1 (1000)
10. Reliance Growth Fund 250 * 2 (500)
11. Reliance Natural Resources Fund 250 * 2 (500)
12. Sundaram Select Focus Fund 250 * 2 (500)

These funds are carefully selected after a through analysis and should help you build up a Substianal Savings Kitty in about 10 years time.
Do review your investment every year.
Best of luck,
Srikanth Shankar Matrubai.

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Is Portfolio Balancing Necessary?

One reader of my blog Mr.Nester Dias wrote a brilliant letter and here it goes :
Hi ShareSher
I am 32 years old, newly married and would like to invest upto 40K per month on mutual funds ( SIP based ) . That is around 45% of my income post tax - I consider myself a safe investor and would like to make steady returns and not lose money . Basically I am a new entrant to Mutual Funds ( entering in phases since Feb 08 ) but am thinking that this present moment would be the rite time to a) learn more about mutual funds/stocks b) very importantly make money :) . I am looking at making money in the long run ( say 5 years + from now ) .
Been doing a lot of reading and have noticed that most of the fund do have the same stocks - this applies to contra funds also..So I am not very sure about how the financial experts evaluate funds . Anyway having said this can you lend me your expert opinion on my portfolio
Would appreciate your input and your reasoning why . Thanks
Reliance Diversified Power Sector - Dividend Plan 25000 One time
Principal PNB Long Term Equity Fund - Series 2 10000 One time
JM Contra Fund - Dividend Plan 10000 One time
DSP Merilly Lynch TIGER Fund - Dividend Regular 25000 One time
Kotak Global Emerging Market Fund 10000 One time
Birla Sun Life International Equity Fund- Plan B - Dividend 30000 One time
Tata Indo Global Infrastructure Fund - Dividend 30000 One time
Tata Pure Equity Fund - Dividend 2500 SIP for 1.5 years
Tata Equity Oppurtinity Fund - Dividend 2500 SIP for 1.5 years
DSP Merill Lynch Top 100 Equity Fund - Dividend 2500 SIP for 1.5 years
DSP Merill Lynch Tax Saver Fund - Dividend 2500 SIP for 1.5 years
Kotak Tax Saver - Dividend 2500 SIP for 1.5 years
DSP Merill Lynch Top 100 Equity Fund - Dividend 25000 One time
DSP Merill Lynch Top 100 Equity Fund - Dividend 2000 SIP for 1.5 years
HDFC Top 200 Fund - Dividend 2500 SIP for 1.5 years
DSP Merill Lynch TIGER Fund - Dividend 25000 One time
DSP Merill Lynch TIGER Fund 2500 SIP for 1.5 years
Sundaram BNP Opportunities CAPEX Opp Fund - Dividend 2500 SIP for 1.5 years
Kotak 30 - Dividend 25000 One time
Kotak 30 2500 SIP for 1.5 years
ICICI Prudential Infrastructure Fund (Dividend ) 30000 One time
ICICI Prudential Infrastructure Fund 2500 SIP for 1.5 years
Century SIP - BIRLA SUNLLIFE Frontline Equity Fund ( Growth ) 2500 SIP for 1.5 years
Reliance - Regular Saving Fund (Growth ) 2500 SIP for 1.5 years


Dear Nester Dias,
You have a good exposure of your savings to Equities. But considering, that you call yourself a 'Safe" investor, it surprises me that you have more than 40% of your lumpsum investment into Infrastructure Funds and 25% of your sip investments going into again Infrastructure Funds. You need to reduce your exposure to Infrastructure Funds and add more of Diversified Equity Funds to add Stability to your portfolio. While Infrastructure as a Sector looks highly promising, its short and medium term outlook does not look all that rosy because of the slowdown in the economy and the high interest rate scenario. If you are willing to hold for more than 5 years or so, you can continue to stay invested in these funds.

I agree with you that most of the funds do have same set of stocks. But the key differenciator as to why some funds become outperformers and some laggards, is because of the percentage of the stocks they own. Suppose Fund A owns more Reliance and Fund B owns more L&T. And, if say, Reliance spikes up due to some news, then Fund A gains more thant Fund B and thus becomes a better performing fund.
Also, it also depends on Cash component held by fund at each stage of market. Fund A holding more cash in a Bearish Market will definitely gain and will be able to outperform others due to its ability to keep picking stocks at every fall.
Also, some funds perform better because of their Enter/Exit Strategy. Example, ICICI Fusion Fund II has bought Subhiksha (unlisted) at a very low low price, and once the scrip is listed, the Fund will see a Spike in its NAV.
These and some more factors are considered while evaluating funds and their future performance.
As far as your portfolio is considered, while you can continue to stay invested in most of your lumpsum investments for now, do take a call around April 2009 when the Full year's Annual Results are announced.
However, since you already have sufficient exposure in Infrastructure Fund, I recommend you stop/switch your sip in all the three Infrastructure funds, and consider investing in Diversified Equity Funds.
So, stop sips in DSP Tiger, ICICI Infra and Sundaram Capex Funds.
Alternatively, you can consider investing in HDFC Prudence Fund, Sundaram Select Focus Fund and DWS Alpha Equity Fund.
Best of luck,
Srikanth Shankar Matrubai.

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