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Five promising mutual funds for 2013

Last updated on: January 7, 2013 16:24 IST

Five promising mutual funds for 2013

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Salil Dhawan

Mutual funds are one of the best ways for a retail investor to achieve their medium to long-term goals. Investing through systematic investment plan (SIP) is one of the most preferred way to invest in small quantities but for a long term across all market cycles. Equity over a long term has delivered superior returns then other asset classes and thus investors investing for long term should have equities as their preferred investment vehicle. We look at five consistently performing equity funds which look promising to perform well in the New Year.

Franklin India Bluechip Fund (G)

Being one of the oldest diversified equity funds existent today, Franklin India Blue chip is one of consistent performers over a long period of time. Fund believes in 'buy and hold' strategy and periodic churning of portfolio is avoided.

Fund is a pure large cap play and believes in investing in large cap companies with sound financials, excellent management and good growth outlook. Fund can have bouts of underperformance during a market rally but if risk adverse investors are willing to invest in the fund for 5 years and beyond, fund can prove to be a low risk, good returns offering. Fund is currently overweight on 'Banks' with Telecommunications major Bharti Airtel being the top holding. Invest in the fund if you are looking for a low risk fund and returns in line with the Sensex. Fund will not disappoint you if have invested consistently for a long term.

Disclaimer: The mutual fund portfolio suggested here is a model portfolio. Investors are advised to consult their financial advisor before taking any investment decision.

Courtesy: Investment-mantra.in


Photographs: Rediff MoneyWiz

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Quantum Long Term Equity Fund (G)

Quantum Long Term Equity Fund (G) is an excellent pick in diversified fund category with an aim to achieve long-term capital appreciation by investing in large and mid cap companies. Fund came in inception in the year 2006 and since then has been a consistent performer across all market cycles. Lower expense ratio of the fund also augurs well for the fund. 'Banking' has always been the top sector with quality picks such as HDFC Bank and HDFC currently feature among top 3 holdings.

Fund follows 'buy and hold' approach and its performance has given established funds such as HDFC Equity Fund (G) a stiff competition. Fund is best suited for long-term investors willing to invest through systematic investment plan (SIP).


Photographs: Rediff MoneyWiz
Tags: HDFC Bank , SIP

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SBI Emerging Businesses Fund (G)

SBI Emerging Businesses Fund (G) is a fund from small and mid cap space has given excellent returns to the investors, especially over a 3-year period. Much of the credit needs to go to its fund manager R Srinivasan. After a shocking performance in the year 2008, fund has performed well in the subsequent years across all market cycles.

Fund manager current portfolio comprises of interesting picks with Cairn India being top holding followed by Muthoot Finance, Goodyear and Spicejet. Banking and finance feature among top sector followed by automotives' and oil and gas. Fund ability to contain the downside in the year 2011 has impressed investors with its performance. Investors willing to monitor the fund closely, ability to take risks can invest in the fund.


Photographs: Rediff MoneyWiz

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ICICI Prudential Discovery Fund (G)

ICICI Prudential Discovery Fund is an open ended diversified equity fund which follows 'value' based investment style where in fund manager looks to invest in companies with strong fundamentals available to bargain price. Fund, thus can be a good diversification fund in one's mutual fund portfolio.

Fund currently boosts of top holdings such as Bharti Airtel , Sterlite Industries which is currently out of favour due to various factors. Reliance Industries also features among top 5 picks. Fund has been a consistent performer across all market cycles.

Such a fund is suitable for investors with long-term horizon and has patience to wait for sectoral cycle to turn around.


Photographs: Rediff MoneyWiz

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Reliance Equity Opportunities Fund (G)

The fund is categorised by AMC as a Diversified Equity Scheme. The fund will aim to capture and take advantage of any opportunity which arise in the market irrespective of the sector and market capitalisation.

Fund has a good mix of companies from large cap and small and mid cap universe. Fund boosts of stable picks such as SBI, ICICI Bank, Infosys among top 5 holdings as well as picks such as Hathway Cable (possibly due to digitisation of cables), Shoppers Stop (possibly sue to FDI in multi brand retail) which can be momentum picks in short to medium term.

Fund has consistently performed well over the last four years and can definitely play a supporting role to core portfolio funds if invested for long term. Investors investing in this fund should have medium risk appetite due to fund venturing into picks from small and mid cap space.

Conclusion

Above mutual fund portfolio is suitable for an investor having a medium to high-risk appetite to ride through volatility in equity markets over a long term. Investors should keep investing through systematic investment plans and monitor funds performance every 6-8 months.


Photographs: Rediff MoneyWiz

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