Sunday, January 11, 2009


I received a Query from an investor named Santosh Sarangi about his investment.
"Hi Dude,
I came to know that you are an independent MF adviser.
I would appriciate if you can help me retune my investment portfolio.I have
some basic questions on MF investments.
I want to know what is the thumb rule of investing in MF.
Sometimes the fund continues to do well for couple of years, then started
performing bad , once the fund manager leaves the company , or for some
other reason. Should one always start looking best performing fund of the
same fund house and try to switch at regular interval? If yes what is that
regular interval?

I have following portfolio, please share your views what to hold, what to
sell and what to switch over?
If I have to switch over/redeem is it the right time or should I wait till
market recovers and come to a good state.

FUND NAME Purchased Date & Amt Current Value
Birla India Gennext NFO (May 2005) - Rs 10000/-
Birla Long term Adv fund NFO (Sep -06)-10000/-
Fidelity Sp situation NFO (May-06)-10000/-
Franklin India oppor Nov 06 -12189
- Rs.13288/-
HDFC equity(G) - SIP (18 installments till Mar 08) Rs 18000/-
HDFC Longterm Adv(D) -ELSS-SIP(6 install till Nov 05) 34000/-, Rs.38718/-
HDFC Prudence(G) May 07-Rs 23910
HDFC top 200(G) May 07-Rs 13361
IDFC Enterprise equity(D) NFO (May 05) 20000/-
Reliance growth(G) May 07 -30000/
Reliance Tax saver (D) Sep 05 -25000/-
SBI Magnum Global (G) SIP (till Jun 2008) 14000/
Sundaram Midcap(D) - SIP (till Mar 2008) 67496
Templeton India Equity(D) NFO(May 06) -10000/
Reliance vision(G) -SIP(from-Jan 2008,till Dec-2009) 10000/- ,
Rs.8100/- (loss around 20%)
please share your open and wise advice.
Many Thanks in advance...

With best regards,

Srikanth Srikanth Matrubai replied
Hi Santosh,
At the outset, sorry for the delay in replying.
I love your questions. There is no thumb rule to investing in MF, as such. But, But, there is a thumb rule for investing in Equities. And the rule says, that your Equity Investment Exposure must be 100 minus your age. i.e, if your age is presently is 40, that means 100-40., 60% should be your equity exposure. This will ensure that as you age, your equity exposure keeps coming down, and you will be saved from the high volatility in your earnings and , though a little less, your earning will have a steady face.
Regarding your second question, I am never for investing in fund, just because of a Fund Manager, that's the reason, I prefer funds which are run by Fund Houses which are not dependent on Star Fund Managers like DSPML, Fidelity, etc.
You could read more about this in detail in my blog or my other blog
One should never invest in a fund just because it had a great past. You should see its investment objective and take approriate decision, after reviewing its performance every 6 months or so.
The same argument goes for switching as well. Keep reviewing its performance and then approriate decision. Of course, give the fund some time to perform and then decide.
Now, regarding your portfolio, I feel you are better booking profits and completely exiting from
Birla India Gennext Fund, IDFC Enterprise Equity, SBI Magnum Global and Franklin India Opportunities Fund.

You can also consider switching the following:-
Birla Long Term Advantage Fund TO Birla Sunlife Frontline Equity Fund
Fidelity Special Situation Fund TO Fidelity International Opportunities Fund

All other investment are good and maybe if you could add a DSPML World Gold Fund or AIG World Gold Fund, that would give your portfolio a more Balanced Look.
Best of luck,
Srikanth Shankar Matrubai

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