Tuesday, August 23, 2011

FUND FOR INVESTMENT HORIZON FOR 25 YEARS...

Hi Sir,

I have an ongoing sip in HDFC Top 200 fund.
I am thinking of going for a sip in IDFC Premier Equity Fund and DSP Top 100 Equity Fund.
I am 30 years old. My horizon is 25 years.
I want to have a Huge Retirement Kitty.

Please give me your valuable suggestion.
Regards,
Sreenath






SRIKANTH SHANKAR MATRUBAI replies :


Hi, Sreenath,

It is always better if you have a amount in your mind when you start planning.

The best way for this is to calculate your Retirement Corpus

You can find the retirement calculator in many financial websites.

I had written a rather long article on retirement and you can find the same here...


http://goodfundadvisor.hubpages.com/hub/BEST-FUND-FOR-RETIREMENT

The fact that you are investing through sips itself shows that you are on the right path.

However, your choice of funds need to be changed.

HDFC top 200 can be continued.
In Mid cap, go for IDFC Premier Equity Fund.
But, I do not see any reason for another Large Cap fund when you already have a sip in Hdfc top 200 fund.
I suggest you rather go for a Diversified Equity Fund like the Fidelity Equity Fund or the DSP BR Equity Fund.
More so, since your horizon is 25 years...quite a good time to ride over the volatility.
My personal favourite would be the Pramerica Dynamic Fund.
Also please take care to switch your equity gains steadily into balance funds and then further to debt funds as you near your goal.
Another caveat....
do not stick with 1 fund throughout....keep an eagle eye over developments like the Change in Fund Manager, Change in Investment Mandate, Continuous slip up in performance....
If such thing is noticed, do not hesitate to switch from the fund and consider moving to a better promising fund.

Best of luck,
Regards,
Srikanth Matrubai


Also visit http://equityadvise.blogspot.com

2 comments:

  1. Hi Srikanth,

    Why Pramerica Dynamic fund? There are other funds in the same category with longer track records. Doesn't ICICI Prudential Dynamic Plan seem to be a better choice?

    Regards,
    Saket

    ReplyDelete
  2. Yes, Saket....on the face of it...ICICI Dynamic Fund has already a track record to boost of..which the Pramerica Dynamic fund doesn't.
    Pramerica has an interesting Asset Allocation Tool which has shown good results in the Back Testing.
    And, more importantly, since its inception last December, the fund has outperformed ICICI dynamic fund by a huge margin.
    ICICI Dynamic has fallen by -6.1% (6months), 8.7%(3months) whereas in the same period Pramerica Dynamic Fund too has fallen but by a far lesser margin of 3.4%(6months) and 4.2% (3months).
    I will be writing a detailed fund analysis very soon.
    I have been recommending my clients very aggressively to invest in this Fund....through sip of course...
    Regards,
    Srikanth Matrubai

    ReplyDelete

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