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MFs that can get you good returns

November 30, 2007 10:31 IST
Do things like mutual funds baffle you? Are you aware of the investment options they provide? What are the best mutual funds available in the market? Which funds accrue maximum profits? What are the crieria for evaluating a fund?

Which funds provide the best SIP options? Are SIPs the easy way of making quick bucks? When and how should one buy mutual funds?

Personal finance expert Rahul Goel answered to many such readers' queries during an hour-long chat on Thursday. Here is the transcript:

Rahul Goel says, 
Good afternoon! Welcome to the discussion on financial planning!

Moneysh asked, Hi Rahul... How Birla Top 100 fund is doing? should we invest in this fund? can you name a few of its peer group funds which are also performing well.
Rahul Goel answers,  at 2007-11-29 12:56:44hi. well, at Personalfn, we tend not to recommend schemes from birla amc as yet. we do research their schemes but we do not find them to be best suited to our clients. when it comes to birla top 100, i think you can do better with a diversified fund like hdfc equity or fr india flexicap.
pks asked, Hi, Are mutual funds better option than stock? Also clear how to show the profit and loss of shares in the income tax return
Rahul Goel answers, hi. the answer to your question would depend on the time and skill you have with respect to identifying and investing in stocks. if you have both, then you should have some money in stocks. but if you are not skilled enough, or do not haev the time, then its best to avoid stocks. with regards to taxation, the implications for equity funds and stocks are the same. but there are more intracacies when it comes to taxation... best to understand the same from you CA.
gaurav asked, Kindly suggest 3 top performing Diversified Mutual funds
Rahul Goel answers, gaurav, hi. if you have appetite for risk, and are willing to stay invested for a 3 - 5 yr period, the funds liks hdfc equity and fr flexi should make it to yoru portfolio. however, you need to get the allocation to each scheme right as well. maybe you should employ the services of an honest financial planner.
mandar asked, Hi i want to buy mutual fund which give me good returns in 1 yrs can u suggest me good funds
Rahul Goel answers, mandar, hi. if you are investing for only 1-yr, then the option for you is limited to debt funds. and there you can expect to make about 7% post tax. such a short tenure is not suited for equity funds at all.
vincy asked, is investing in lotus india agile fund a good option?
Rahul Goel answers, vincy, hi. we prefer diversified equity funds with good track records over various market phases and stong teams and processes. nfos, in our view, 99% of the times, need to be given a miss.
JAMI asked, Hi Rahul, Is is advisable to invest money in ULIP'S? I heard that ULIPS include lot of hidden charges.
Rahul Goel answers, jami, hi. ulips may not have hidden charges. all is disclosed adequately if either you or your agent are keen to discuss the same. but yes, the premiums for ulips are higher as compared to say term insuraance, where there is no maturity benefit.
GS asked, Hi I m very new to the investmen market. Can you please explain what exactly is a mutual fund and what will be the benefits, if I invest in them?
Rahul Goel answers, hi. i will take a short cut here pl excuse. visit and download our free guide to mutual funds.
v asked, how do you rate new sundaram energies mutual fund???????
Rahul Goel answers, hi. its a sector fund. we have recommended to our clients at Personalfn that they do not invest in the scheme.
Utpal asked, I have surplus of Rs. 3 lacs lying in Fixed Deposits. What do you suggest, Shall I put it in Stocks, MFs and If in stocks which one in particular , Please advise.
Rahul Goel answers, utpal, hi. where the money should ultimately go will depend on your risk appetite, expectation of return and the time for which you can park the same. if you have appetite for risk and can put aside the money for 5-yrs, sure go ahed and invest in the well diversified equity funds. however, if you do not have risk appetite, an FD is good... though a fixed maturity plan from a mutual fund will tend to offer you a marginally better tax adjusted return.
yogesh asked, Hi what is better ulip or term plan with mutual fund/ equites for long term investment.
Rahul Goel answers, yogesh, hi. in most instances, term plan with mutual funds will work best for you.
viksun asked, what should be the investment break-up in terms of percentage (Direct equity, MF, Real Estate, Debt Instruments, Liquid assets). In today's scenario will it be unsafe to invest more in real state (the portfolio becoming lop sided?)
Rahul Goel answers, hi. it is important to have exposure to real estate. however in most instances there is only so much money and diversification is not possible. hence it is advisable not to make "investments" in real estate. you should buy the place where you plan to live, where you plan to work. but if you wish to make an investment then either you should have sufficient funds to diversify across properties or you should avoid. in future real estate mutual funds will take care of the diversification issue.
RahulGupta asked, Birla SunLife claims to give guaranteed returns even if market goes down, whats ur take?
Rahul Goel answers, rahul, hi. from what i undertand, no organisation is permitted to guarantee returns. you should cross check with the insurer.
RahulGupta asked, FD v/s MUTUAL FUND: When FD's are giving 10%guaranteed return, how wise it is to invest in Mutual Fund which are very risky?
Rahul Goel answers, rahul, hi. the 10% is taxable at your marginal rate of income tax. so, the effective return for a person in the 30% tax bracket is about 7%. you can compare this with a debt mutual fund, which can offer you about 7.5% post tax. the debt fund in our view is better. you should not compare FDs with equity funds!
Shiva asked, I earn 4.5lacs PA. Till today I did not make investments inorder to save tax.Please suggest me good portfolio. I dont prefer to take too much risk. Please suggest me on how much to include in life insurance, how much in Mutual funds etc.
Rahul Goel answers, shiva, hi. if you cannot take much risk, then opt for schemes like PPF and NSC. with regards to insurance take term life cover. even though you have limited risk appeite a small portion, maybe about 10% can go into tax saving mutual funds.
amit asked, i want to invest 12 lakhs in icici prudential fund sir what u think it will give returns per annum
Rahul Goel answers, amit, hi. i do not know which scheme you are referring to. if you are investing in an equity mutual fund, a long term return of about 15% pa should be a reasonable expectation.
RahulGupta asked, "ULIP'S ARE THE BIGGEST FRAUD OF THIS TIME",claims one investment adivsor, they charge huge admin charges and 40% agent commision, please tell if this is true?
Rahul Goel answers, rahul, hi. although in most instances we believe that term + mutual funds is a better option, there does exist a genuine need for ulips. i hasten to add that very few people have this genuine need. a lot of people unfortunately take ulips without having understood the product. and when the reality dawns on them, then they are shocked to see the expense structure etc. however, over a 10-yr plus horizon a well managed ulip can be competitive on the expense front as compared to mutual funds.
Ashok asked, Hi Rahul, I am Ashok from HYD. I have sold a property and made some money. I am now confused regarding the investments with that money. I decided to invest back 80% of the money. Please advice..
Rahul Goel answers, ashok, hi. it is best that you take an objective view on whether you should put money in capital gain bonds, or buy another property, or simply pay the tax and invest the money freely. your advisor can help you with this. if he cannot, maybe you can get in touch with personalfn in hyderabad... they can definitely help you with this.
kiran asked, Hi Rahul,I want to consult one financial advisor.But what would be the approx. fees That i have to pay for his services? Can you mention some of advisor's names?
Rahul Goel answers, kiran, hi. the fee would vary depending on your need and the advisor. best would be to meet some and get quotes. where to source the names from.... maybe you can do a search on google. also, you can visit to know more its services.
raviii asked, Hi rahul Sundaram BNP Paribas Select Thematic Funds Energy Opportunities seeks to capitalise on this evolving opportunity to deliver value for its investors. The fund will invest across sectors, in large, mid and small-cap stocks. plz advice abt this thx
Rahul Goel answers, ravii, hi. like i replied earlier, we have recommended to our clients at personalfn to avoid investing in the fund. we do not like sector funds. in any case the diversified funds we recommend already have some exposure to the energy sector.
GM asked, Could you advice me about my MF portfolio: Birla Mid Cap G--10% Birla Sun Life Equity--9% DSPML Equity Fund--9% DSPML TIGER--8% JM Basic Fund--5% Kotak Opportunities G--12% Reliance Power Sector--8% Reliance Vision--14% Sundaram BNP Paribas Select Focus--11% Tata Pure Equity--14% Thanks!!
Rahul Goel answers, hi. at the outset, you do not have schemes from either templeton or hdfc. this is rather odd given that these two fund houses should ideally be managing the largest chunk of your money in our view. also, you have several thematic and sector funds in your portfolio.... more than 50% of your portfolio. ideally they should not account for more than 10% of your portfolio.
rajeshkumar_221 asked, I want to invest 2,000 pm. Should i go for ULIP or MF taking into account the expenses and return. Please advise.
Rahul Goel answers, rajesh, hi. you seem to have a need for investing the money, and not taking insurance. a mutual fund SIP is best for you.
SV asked, hi Rahul, Pls. suggest good taxsaver fund. Also, are all tax saver funds having a lock-in of 3 yrs ?
Rahul Goel answers, hi. yes, all tax saver funds will have a lock in for 3-yrs. we like funds like fr india taxshield and hdfc taxsaver.
tanuj asked, Good afternoon sir Sir iam salaried person. and i do not now much about market. i want to invest Rs 10000/- in mutual funds . there are so many mutual funds in market and iam confused in whcih mutual fund should i invest
Rahul Goel answers, tanuj, hi. best would be to identify locally a honest distributor who can guide you. a financial planner will not be much interested given your small corpus. the recommended portfolio, assuming that you can take risk and are investing for the long term, should have funds like hdfc equity and fr india flexicap.
mandar1 asked, Please rate my below portfolio and suggest for another two PF. which i would like to invest through SIP of 3000 each. Have one HDFC top-200. 25000. HDFC Equity fund -25000 Frankline Prima fund -25000 Frankline Blue chip – 25000 UTI master share-50000 NFO Sundaram Energy -50000 UTI tax saving around 60000 Franklie Tax shield around 36000
Rahul Goel answers, mandar, hi. some comments... first, you have an unusually high exposure to one sector fund. this needs to be set right. two, you have both hdfc equity (more aggressive than hdfc top 200) and top 200. ideally you should have one... multiplicity of schemes does not serve much purpose. three, rtaher than having blue chip (large cap) and prima you (mid cap) can be invested in fr flexicap (diversified). both the above switches may not cost you money (load). confirm this with the mutual fund. finally, the sip can go into the existing schemes. over time you can add a couple of funds like fidelity equity and dsp ml equity, but in smaller proportions.
srisai asked, Hi Rahul,I am 26yrs old working as a software engineer. I can invest 50,000rs every year or 1 lakh at this time.It would be a long term plan. I just want to know if I can invest something that can be useful to my parents at their old age.
Rahul Goel answers, hi. yes you can invest the money so that it helps you provide for your parents in their old age. for me to be able to guide you i will need more details. send in your details me at
SeeSee asked, HELLO RAHUL,is it safe to assume a return of 8% annually for 40-50 years, from a Debt fund. Asking, since someone wants to put their money into debt funds(negligible risk) after retirement!! Thank you in ADVANCE!
Rahul Goel answers, hi. its difficult to have an expectation of return from debt over such a long period. in present times you may be able to earn this, but over time this return will change. one option would be to lock in your money in 5 yr FMPs. but on renewal you will run the risk that the return offered may be lower that what it is now.
Moonmoon asked, Hi Rahul, Wanted to know the Mutual Funds with the best SIPs and what is the difference in investing in Mutual funds with SIPs or investing at one go? Do they really help in creating quick bucks as some say?
Rahul Goel answers, hi. if you invest in one shot into a mutual fund you run the risk of having mistimed the investment. the sip dilutes this risk by having you invest money on a fixed date every month over a period of time. for most people sips are best suited to them. however, as and when the markets correct or act irrationally on the downside, one must consider investing a small lump sum to benefit from the panic.
gyaan asked, Hi I am 30 yrs old and have not started saving yet,what should be my portfolio to get started
Rahul Goel answers, gyaan, hi. best is to start sips into well diversified equity funds. have about 5/6 shcemes. i am assuming here that you have near term risk appeitite. you should employ the services of an honest financial planner.
sudeepta asked, sudeepta says, Hello Rahul, how are you doing? Please have a look at my portfolio below: Birla Mid Cap, SBI Mid Cap, Franklin India High Growth, Reliance Diversified Power -> 10K each, DSP ML TIGER,ICICI Infra and Reliance Equity Advantage -> 30 K each, Fidelity Special Situations, HDFC Mid Cap -> 25K each, Templeton India Equity -> 15 K, DSP ML Top 100 Equity -> 20K. Also a monthly SIP in Reliance Equity Opportunity of 1K. Other than these I have close ended (or ELSS) holdings of 10K in HDFC Mid Cap, and 20K in ICICI Tax Plan. All these were bought within the last few months except for Templeton India Equity which I bought last year as NFO. I want to trim my portfolio to fewer funds. Is that a correct thing to do? Also which one should I sell and which one should I consolidate upon? To ward off paying any exit load I want to sell these in Feb 2008. Kindly advice. Thanks for your time and analysis.
Rahul Goel answers, sudeepta, hi. its a great idea to trim your portfolio. get rid of the sector and thematic funds. do not worry about the exit load too much... if you put in 100 rs last year, its about rs 180 now... of this if you have to give 1 rs a exit load, it should not hurt you!
innu asked, Hi Rahul, I have purchased following MF Reliance Growth,HDFC Equity,Franklin india prima plus,Sundaram Paribas midcap,SBI magnum global fund & Reliance Diversified Power-Growth.Is this portfolio ok?Or need to make some changes.I need to invest for long term & have started SIP also for the same.
Rahul Goel answers, hi. the portfolio is not strucutred well it appears. your core holdings should be diversified schemes like hdfc equity and fr india flexicap... these should account for over 50% of your monies. the sector/thematic funds should cumulatively be about 10% of your portfolio. the rest can go into funds like fidelity equity and dsp ml equity.
vincyd asked, I want to invest 1lac in rel diver power sector, please advise
Rahul Goel answers, power sector funds have delivered exceptional returns in the last one year. if you wish to expose yourself to very high risk, you may want to invest. in our view, one should not invest more than 10% of his/her portoflio in sector/thematic funds.
Dass asked, Hi, I earn 8 lacs per annum. But, due to certain reasons have not made any savings. I am 35 years old. How much should I save every month so that i do not have a problem after retirement?
Rahul Goel answers, dass, hi. its never too late to start investing. also, you should save as much as you can. for me to be able to guide you i need more information. if you want personalfn to guide you on this, send us an email at alternatively, you can employ the services of another honest financial planner. whatever you do, start now!!
Balamurugan asked, Hi Rahul...I am 30 years old, I am married and my wife is a home maker and my daughter is 18 months old. I have done no investments or saving apart from an LIC policy (Jeevan Anand for 5 Lakhs). Could give me general financial plan if I can save Rs. 30,000 every month
Rahul Goel answers, hi. here it is... we assume that if your daughter were to go to college today, she would need rs 40 lacs (grad + post grad; staying expenses etc). and we assume that this expense will inflate by about 10% py over the next 15 yrs, when your daughter will actually go to college. using these metrics, and assuming you can invest money to earn you 15% pa, you need to set aside rs 27,000 pm o take care of your daughters education expenses. we have made assumptions here which will need to be changed to suit you... the investmetn required every month will therefore change accordingly.
deep asked, Hi Rahul, This is Deep here..My question to you is that as a young man who has been working for 2-3 yrs. now, should he invest in a property or in equity
Rahul Goel answers, deep, hi. property for self use should be priority. once that is taken care of, you can start building your equity portfolio. but if you already have property exposure, start with equity investments now.
meraj asked, Thanks What is your opinion on tata infastature mutual fund
Rahul Goel answers, hi. we do not recommend that investors put their monies in sector funds. well managed diversified funds in any case have exposure to various sectors. they have the flexibility to move money from one sector to another. in case of infra funds no such flexibility exists. and that is why they have to remain invested even if prospects for the sector were to turn for the worse.
priyanka asked, Hi Rahulji, which is the best ELSS fund for long term - i can hold for 4 - 5 years -
Rahul Goel answers, priyanka, hi. you can opt for funds like hdfc tax saver and fr india taxshield.
nilesh asked, hi rahul,how much do I need to invest in mutual fund per month so as to get valuation of rs. 1 crore in ten years?pl. advice.
Rahul Goel answers, the answer - rs 55,000 pm. however if you wish to accumulate a inflation adjusted rs 1 cr, then you will need to set aside about rs 90,000 pm. in both instances it is assumed that the investments will earn about 15% pa.
priyanka asked, HI SIR, is this the right time to invest in gold? If i buy goldbars from retailers they charge making etc. on that... can I buy it from Cmdy Exch? how?
Rahul Goel answers, priyanka, hi. we are short of time... all your answers can be found here -
basant asked, Hi rahul i need to know,how do you select a financial planner, also i am 25 yrs old and haave been working since 1 and a half years, i need to design a portfolio to grow my wealth but i am clueless who and how do i approach, kindly assist.
Rahul Goel answers, basant, hi. best way to select someone is to ask your friends if they are satisfied with their planners. if they are you can evaluate them. also, when you meet them ask to speak to some of their other clients. also understand what services they will provide on an ongoing basis etc. remember it is not uncommon for the advisors to disappear after the monies are invested!
Rahul Goel says, Thank you all for participating in this dicussion. See you all next week!

Chat with Rahul every week!

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