Thursday, January 22, 2009

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

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