Wednesday, June 2, 2010


From: Thamaraikannan

Subject: Pls suggest me: Mutual fund for long term investments

  I got your mail id from your blog  I have a query related to my MF investments. I am seeking some advice for creating my retirement corpus. I am 29 years old. I am planning to invest 5000/- per month for creating my retirement corpus.

Since I am a passive investor and the investment period is long, Could you please tell me which type of mutual fund will suite for me. Also please suggest me some funds where I can invest it through SIP.

Last year I started investing in MF through SIP for 1 year.

Following are the MFs I started with .

1. Birla Sun Life Equity Fund - Growth
2. HDFC Growth Fund - Growth
3. ICICI Prudential Infrastructure Fund - Growth
4. Kotak Opportunities - Growth

After 1 year completion, I have continued only the following two funds for next two years.

HDFC Growth Fund - Growth
ICICI Prudential Infrastructure Fund - Growth

I am planning to continue with these two funds for long term (5 - 8 years).

Could you please suggest me these two funds are good to have for long term investments?

Could you please tell, "Birla Sun Life Equity Fund - Growth"  and "Kotak Opportunities - Growth" are good to invest further?

Thanks in advance,


Dear Thamaraikannan,
     Your Portfolio lacks a Good Large Cap Fund and is slightly biased towards Mid-caps.

While your decision to continue your sips is a good one, your choice of funds leaves a lot to be desired.
You should have sticked with Birla Sunlife Equity Fund rather than HDFC Growth Fund. Even though ICICI Infrastructure Fund is a Sector Fund, it has had a good past and continues to promise more with its good Stock Picking and sticking with them through market cycles.
However, you do need to review your investments every year at least. For a period of 5-8 years, it is always advisable to invest in a Diversified Fund rather than a Sector Fund, however promising it may be.
So, stop both the sips for now and instead invest in the following funds:
Birla Sunlife Equity fund
HDFC Top 200 fund

Birla Sunlife Equity Fund :
The Fund follows a Flexi-cap approach and has outperformed its Benchmark over 1, 3, 5 periods and has shown an amazing ability to protect itself even in Sharp Falls, like the one witnessed in 2008. Because of its extreme NAV volatility, the Fund works very well through SIP investment. Hold and continue to add more through SIPs

Kotak Opportunities Fund:
Very volatile and very inconsistent and thus is not for the weak hearted. Only investors with aggressive mind set should consider investing in this Fund. I suggest you to avoid further investment in this fund and Sell on market rises.

Actually, the two funds suggested by me viz.,
HDFC Top 200 fund
Birla Sunlife Equity Fund
are very good funds and you can consider these two funds for your Retirement. Since you are a passive investor, you can also go for Trigger Facility wherein whenever your investment gets you a predefined target of say 50% or 100%, the Profit is automatically is booked and switched into a Debt Fund. This way not only you will be booking regular profit but also protecting your profits by switching them into a Debt Fund. Birla Sun life Mutual Fund has this facility for its Birla Sunlife Frontline Equity Fund right now and very soon it is sure to offered to all its schemes and by all the AMCs for all their funds.

Regarding your retirement corpus, it depends on your lifestyle and other things. You can go to any financial website, and using their "retirement planner" calculator, you can decide your corpus.

For SIP investment, you can choose funds which have a Good Track record and have a Good Long Term Potential, my choice of funds would be
Birla Sunlife Equity Fund
DSPBR Top 100 Fund
Fidelity Equity Fund
Franklin Templeton PE Ratio Fund of funds
HDFC Prudence Fund
HDFC Top 200 Fund
ICICI Dynamic Fund
Mirae Asset India Opportunities fund
Religare Business Leaders Fund
Reliance Regular Savings Fund - Equity
SBI Magnum Contra Fund
Tata Equity PE Fund

Do review your portfolio and asset allocation at least once every year.

Best of luck,
Srikanth  Matrubai

Also visit

1 comment:

  1. Thanks for sharing this helpful info!
    I always like to read your blog..


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